The future of Cross-Border Insolvency Act 42 of 2000 in view of developments elsewhere

Abstract

My research project explores the future of the Cross-Border Insolvency Act 42 of 2000 in view of developments relating to cross-border insolvency regimes elsewhere. The continuing development of International trade and investment gave rise to the escalation in the amount of multinational enterprises that have debt, own assets and conduct business in numerous jurisdictions around the globe. The increase of cross-border insolvency as a global economic problem, gave rise for the need of a general equitable system to administer cross-border insolvency universally. The Model law on Cross-Border Insolvency was promulgated by the United Nations Commission on International Trade Law (UNCITRAL) in 1997. The purpose of the UNCITRAL Model Law on Cross-Border Insolvency is to assist states to equip their insolvency laws with a modern, harmonised and fair framework to address instances of cross-border insolvency more effectively.South Africa adopted the UNCITRAL Model Law on Cross-Border Insolvency by way of the Cross-Border Insolvency Act 42 of 2000. However the Cross-Border Insolvency act is not effectively operative. One of the main reasons why the act hasn’t become fully operative yet is because of the fact that the Act introduced a reciprocity clause. In my Research project I will address the issues caused by cross-border insolvency. I will discuss the common law position relating to cross-border insolvency in South Africa. I will furthermore indicate why the Cross-border Insolvency Act 42 of 2000 is not effectively operative in South Africa. Lastly I will compare the Cross-border Insolvency dispensation in South Africa to that of the United States of America, the United Kingdom and Australia.