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12 Insolvency

158 IN NZLC R50 Electronic Commerce Part One para 8 the Law Commission mentioned that this Study Paper would consider the European Convention on Insolvency Proceedings. This Convention was concluded on 23 November 1995, but one member State¹⁴⁵ failed to sign the Convention within the time limit, with the result that it could not enter into force. The Convention was intended to provide a system of mutual recognition and enforcement of judgments in insolvency proceedings.

159 Since then, the Law Commission published a further report in February 1999, NZLC R52 Cross-border Insolvency, which recommends that New Zealand adopt the UNCITRAL Model Law on Cross-border Insolvency. The Model Law provides a framework to address instances where the insolvent debtor has assets in more than one State. Not being a member State, New Zealand could not have acceded to the European Convention, although the option of passing legislation consistent with the European Convention’s provisions would always have been open. However, the Commission has concluded that enacting the Model Law as recommended in NZLC R52 will provide the desired uniformity of approach to the initiation of cross-border proceedings.

160 Unlike the European Regulation, which provides a fully harmonised insolvency regime, the Model Law is essentially procedural in nature. It enables local assets to be governed by local law, and does not attempt to unify the substantive insolvency law of individual States.¹⁴⁶ The UNCITRAL Working Group on Insolvency Law is currently considering producing a further text on insolvency proceedings (including liquidations and rehabilitation proceedings). However, this work is still at the preparatory stages.¹⁴⁷