McGrath v Riddell: A flexible approach to the insolvency distribution rules?

✍ Scribed by Blanca Mamutse

• Publisher: John Wiley and Sons
• Year: 2010
• Tongue: English
• Weight: 181 KB
• Volume: 19
• Category: Article
• ISSN: 1180-0518
• DOI: 10.1002/iir.179

✦ Synopsis

Abstract

The rules relating to the division of the insolvent estate assume considerable importance in the field of international insolvencies, where different legal systems interact. International instruments including the European insolvency regulation and the UNCITRAL Model Law on Cross‐Border Insolvency have provided a framework which governs the relationship between local and foreign distribution schemes. For English lawyers, questions remain however regarding the future role of the courts' statutory power to cooperate with the courts of ‘relevant’ countries or territories, and of the common law principle of universalism. An important issue connected to the determination of such questions is the established judicial approach to the pari passu rule, in the application of domestic law. This paper examines the manifestation of this tension in the litigation arising from the collapse of the HIH Casualty & General Insurance group of companies. It notes the scope which remains for continued resort to the statutory power of cooperation, and the potential for the Cross‐Border Insolvency Regulations 2006 to encourage a more flexible approach to resolving differences between distribution schemes. Copyright © 2010 John Wiley & Sons, Ltd.