By Scott Atkins and Rodney Bretag (Norton Rose Fulbright)
Introduction
The UNCITRAL Model Law on Cross-Border Insolvency (Model Law) is regarded as an essential component of the normative international framework which characterises a modern, efficient insolvency system. Recommended for member state adoption by the United Nations Commission on International Trade Law (UNCITRAL) in May 1997, the Model Law provides a consistent, predictable procedural framework in cross-border insolvency matters, where a distressed debtor has assets and creditors in multiple jurisdictions.
Under the Model Law, a debtor’s primary foreign insolvency proceeding can be recognised by courts in other ancillary jurisdictions where the debtor conducts its business. This can lead to a stay on creditors’ enforcement rights in those jurisdictions, as well as various other discretionary relief which may provide the appointed insolvency representative with the same collection, investigatory and distributive powers that are available in domestic insolvency matters.
Informed by the fundamental goal of modified universalism for courts to cooperate to centralise insolvency proceedings as far as possible with a view to enhancing efficiency and creditor returns, the Model Law has been successful in instilling a coordinated approach to recognition and relief, reducing the fragmentation and uncertainty arising from the conduct of simultaneous, competing solvency processes in different jurisdictions. The Model Law has also facilitated complex multi-jurisdictional rescue outcomes for distressed but viable entities, and incentivised foreign investment, the supply of credit, financial stability and economic growth.
Yet, over the last three decades, the Model Law also has faced several obstacles. These have included limited adoption in some regions, differences in the implementation of the Model Law by enacting states, and differences in the interpretation of the Model Law by courts across enacting states.
Further, the insolvency and economic landscape is now almost unrecognisable compared to what it once was. Technological and digital advances – and increasingly artificial intelligence – have empowered businesses for growth and led to the creation of entirely new industries. Environmental, social and governance concerns such as climate change have also become major insolvency risk factors and forced a reassessment of how those concerns ought to be considered in the payment waterfall in an insolvency context. Geopolitical and trade tensions have also led to greater protectionism and a retreat from what once seemed like an era of continued multinational cooperation and globalisation.
It is important for the Model Law framework to adapt and evolve to meet these challenges and continue to function as part of the global commercial normative system that provides financial stability and drives economic growth and investment.
Advances in other cross-border insolvency principles – such as the Model Law on the Recognition and Enforcement of Insolvency-Related Judgments and the Model Law on Enterprise Group Insolvency, [1] as well as the substantial work undertaken by UNCITRAL’s Working Group V to develop an asset tracing and recovery toolkit and a draft Model Law on Applicable Law in Insolvency Proceedings – are certainly part of the solution, and have been considered extensively elsewhere.
Rather than recanvassing the role of those additional frameworks, this article takes a different perspective. It suggests that another valuable means of addressing the challenges encountered by the Model Law, and continuing the progress towards greater cooperation and recognition in cross-border insolvency matters, is to advance substantial amendments to the Guide to Enactment and Interpretation annexed to the Model Law (Enactment Guide), last revised in 2014.
A newly revised Enactment Guide has the potential to provide greater clarity and practical guidance and experiences which could function as a pathway to the further adoption, and consistent implementation and interpretation, of the Model Law, while also assisting legislators, regulators and the judiciary to understand how the Model Law’s recognition framework “fits” in a rapidly evolving economic and regulatory context.
In July 2025, UNCITRAL endorsed the Australian delegation’s proposal to progress updates to the Enactment Guide, with Working Group V given the responsibility for investigating and drafting the scope of the required updates. A special Colloquium to kick-start this process was held from December 11-12, 2025 in Vienna, following the conclusion of Working Group V’s 67th Session.
In this article, the authors, having recently returned from attending the Colloquium and delivering the opening address on behalf of the Australian delegation, provide an overview of these significant developments, and look ahead to what we have in store in the next evolution of the Model Law framework.
Economic context and the adaptation imperative
The Model Law has been highly successful in advancing its underlying objective of modified universalism. In facilitating greater recognition, cooperation and coordination where a distressed entity’s business, assets and creditors are located in multiple jurisdictions – increasingly “modus operandi” in a highly digitised, technology-fuelled economy – the Model Law has enabled courts in different jurisdictions to work cooperatively together and assist insolvency representatives to implement a main insolvency process in a single primary forum.
This has avoided the multiplicity of proceedings and inconsistent judgments that can arise under a territorial approach to the resolution of cross-border insolvency matters. In doing so, the Model Law has enhanced efficiency, preserved enterprise value and increased creditor returns. It has also maximised the potential for distressed but viable entities to effect a successful multijurisdictional restructure, and supported the preservation of jobs, financial stability and economic growth.
By creating a certain, predictable recognition and cooperation framework, the Model Law has also enhanced confidence and certainty among financiers and private equity investors – boosting the supply of credit and foreign investment flows.
In that sense, the Model Law optimises “market symmetry” in a global marketplace, playing a central role in commercial and economic processes and setting foundational legal rights and duties relevant to the commercial, financial and social fabric of states. [2]
Critically, the Model Law has also contributed to greater people-to-people linkages, the exchange of valuable knowledge, information and expertise and judicial capacity-building regionally and globally.
And yet, we are now operating in an entirely different economic landscape. As the Honourable Justice Kannan Ramesh – Judge of the Appellate Division of the Supreme Court of Singapore – has recently noted, while the Model Law was first adopted at a time when the challenge was to deal with what was then the “new paradigm of economic convergence”, the paradigm has now changed, with trade protectionism, isolationism and geopolitical rivalries giving rise to “a world with fissures and fault lines [that] is no longer quite so flat”. [3]
To remain relevant, and continue to function as both a unifying cross-border insolvency framework and a core component of a much broader international commercial, financial and economic normative system, it is important for the Model Law to evolve, adapt and change in tandem with the scale of economic, social and geopolitical change which now characterises the world in which we live.
A closer look at the practical challenges faced by the model law framework
Adoption challenges
Across Asia, the Model Law has been adopted by Singapore, Japan, South Korea, the Philippines and most recently Malaysia in July 2025. However, it has not been adopted by other major Asian countries, including China, Hong Kong, Vietnam Indonesia, India, Thailand, Pakistan, Bangladesh, Sri Lanka, Laos, and Brunei.
Malaysia’s move to adopt the Model Law could provide some persuasive impetus in the region, along with the continued success of Singapore as a global restructuring hub after having adopted the Model Law nearly a decade ago. However, it may take time to build regional support for the Model Law, with many Asian nations concerned to protect national sovereignty, and often favouring bilateral arrangements rather than multilateral frameworks such as the Model Law. Recognition under the Model Law’s universalist approach has, for some Asian nations, been seen as a precursor to “erode a jurisdiction's ability to direct and administer its own affairs.” [4]
This effect has been more pronounced in countries that follow a civil law system. Indeed, it has been suggested that “civil law countries find it difficult to adopt wholesale provisions of the Model Law”, and the idea of cooperation and communication can be seen as an obstacle due to unfamiliarity with judicial discretion [5]. This has also seen resistance to the adoption of the Model Law within the European Union.
Implementation challenges
Another challenge for the Model Law, in advancing broad-based cooperation and recognition among adopting states, has been differences in the implementation of the Model Law by those states. The Model Law, as a soft law instrument, leaves room for adopting states to adapt the normative framework to reflect local conditions via domestic implementing legislation.
Two particular implementation differences of note relate to reciprocity and the public policy exception to recognition.
A reciprocity requirement exists in South Africa, Mexico, the British Virgin Islands, Romania and Mauritius, requiring another state to have adopted the Model Law before recognition will be given to an insolvency proceeding taking place in that state. The South African approach to reciprocity is the most restrictive, despite it being one of the first countries to adopt the Model Law in 2000. In South Africa, the cross-border provisions of its insolvency law apply only to countries designated by the Minister, and none have yet been designated. Mere adoption of the Model Law is no guarantee of reciprocity.
Apart from impeding a restructuring and the coordination of creditor claims, this can also act as a deterrent to foreign investment and trade across economic regions, with investors uncertain of their rights and averse to realisation inefficiencies and doubt in an insolvency event.
The public policy exception has also seen differences in approach from adopting states. Article 6 of the Model Law provides that a local court may refuse assistance in relation to foreign insolvency proceedings where it would be “manifestly contrary to the public policy” of the local state.
The approach in the United States, the United Kingdom and Australia is that courts should be slow to invoke the exception, for example where there has been a breach of natural justice or procedural fairness.
In other countries, such as Singapore, South Korea, Japan, the British Virgin Islands, Serbia and Canada, the local legislation excludes the word “manifestly”. This permits courts to have greater discretion in electing whether to recognise foreign insolvency proceedings. How liberally the expression is applied has the potential to turn the modified universalism intended under the Model Law into something approaching territorialism.
This was one of the matters raised in the course of deliberations during the Colloquium. Many emerging market and developing economy (EMDE) delegates drew attention to the need to distinguish between public policy as a legal concept (which informs the exception in the Model Law) and general government policy, which is not a legitimate basis for denying recognition and relief under the Model Law framework.
In a progressive interpretation which very much aligns with the underlying policy objective of the Model Law, in January 2024 the Singapore International Commercial Court (SICC) – in its first ever cross-border restructuring decision in Re PT Garuda Indonesia (Persero) Tbk (Garuda) [6]– emphasised that even in Singapore’s case where the public policy exception is not preconditioned by the requirement for “manifest” inconsistency, courts should be slow to refuse recognition on purported public policy grounds.
Justice Sontchi, who delivered judgment on behalf of the SICC, held that permitting a broad basis for the invocation of public policy grounds:
Would permit creditors to stultify recognition proceedings on the basis of alleged breaches of public policy, however insignificant. This would allow a convenient escape route from recognition which would only serve to defeat modified universalism and is detrimental to the fair and efficient administration of cross border insolvencies, the protection of creditor interests, the protection and maximisation of value, the protection of investment and the preservation of jobs. [7]
The SICC’s decision in Garuda is a useful contribution to the jurisprudence on the Model Law. However, as discussed in further detail below, revisions to the Enactment Guide – emphasising the ways in which inconsistencies in the implementation (and interpretation) of the public policy standard may undermine the economic, financial and social policy interests of adopting states – may provide a highly persuasive case in the minds of legislators and regulators in determining the form of implementation of the Model Law.
Interpretation challenges
Aside from implementation differences, courts in adopting states have also not interpreted domestic legislation implementing the Model Law in a consistent manner.
The differential standards applied to the determination of a debtor’s centre of main interests (COMI) have been of particular concern. COMI is a high-stakes issue under the Model Law. If it is found that a debtor has its COMI in the jurisdiction where the foreign insolvency proceeding was filed, the proceeding will be recognised as a “foreign main proceeding”, giving rise to a range of automatic relief such as an enforcement moratorium. On the other hand, if the debtor only has an “establishment” in that jurisdiction, the insolvency process will be recognised as a “foreign non-main proceeding” under article 17, and the scope of relief is then entirely in the court’s discretion.
COMI is not defined in the Model Law. However, article 16(3) establishes a presumption that, in the absence of proof to the contrary, a corporate debtor’s COMI is the place where the debtor has its registered office. Jurisdictions have differed in their approach to the ease with which this presumption can be rebutted.
In the European Union, the United Kingdom, and Australia, courts have taken a stricter approach to the circumstances where the COMI presumption can be rebutted, requiring clear objective factors, such as the location of the debtor’s primary assets, employees and locus of decision-making – that point towards a different economic reality [8]. In contrast, in the United States, the presumption can be rebutted more easily, on the basis of lesser connecting factors on the part of the debtor in an alternative jurisdiction [9].
There have also been considerable differences among courts in assessing the relevant date for determining a debtor’s COMI. In the UK, courts determine COMI at the time the foreign insolvency proceeding is commenced [10], while in the United States COMI is determined at the time the recognition application is filed. COMI is determined at an even later time – when the hearing of the recognition application takes place – in Australia [11].
In jurisdictions that take a more flexible approach to the determination of COMI, there is a greater means for a debtor to “forum shop” – relocating its COMI to a “debtor friendly” jurisdiction before then undergoing a foreign insolvency process in that jurisdiction (noting that many jurisdictions, such as the United States, the United Kingdom, and Singapore, provide access to local insolvency alternatives for foreign debtors that satisfy very minimal connecting factors) and then seeking recognition of that process in a jurisdiction with a more flexible approach to COMI. Significant policy concerns – and expensive litigation – can then arise, raising the potential for conflicting arguments about whether a debtor has participated in “good” forum shopping (with a view to maximising creditor returns) or “bad” forum shopping (with a view to avoiding or defeating creditors’ claims).
The complexities involved, and the lack of settled principles both across and within individual jurisdictions, can deplete the value of the insolvency estate and impede efficient cross-border restructuring outcomes. Differences in the approach to COMI among jurisdictions can also give rise to strategic manipulation and may not always exclude forum shopping of the “bad” type.
Updates to the enactment guide the breakthrough that is needed
The Enactment Guide which accompanies the Model Law has been a valuable resource for legislators, regulators and the judiciary in adopting, interpreting and applying the Model Law. In January 2014, UNCITRAL issued a revised Enactment Guide following the conclusion of its 46th Session, aiming to provide clarification on selected provisions and advance consistent interpretation of key concepts.
A revised edition of the Enactment Guide – more than a decade after the release of the last version – could address a number of the adoption, implementation and interpretation challenges that have put a limit on the level of predictability and consistency in cross-border insolvency norms intended by UNCITRAL under the Model Law framework.
In addressing adoption challenges, the Enactment Guide could be adapted to further emphasise the "procedural" nature of the Model Law, and the ample room provided to courts in adopting states to tailor recognition and insolvency relief in a manner that preserves the rights of local creditors under "substantive" domestic insolvency laws. It could be highlighted that, rather than intruding on national sovereignty, the Model Law seeks to preserve and protect national sovereignty, and to promote court-to-court cooperation that can achieve better outcomes for creditors than a territorial approach. Worked examples, flowcharts and scenarios may be useful for illustrative purposes.
The specific economic benefits of the Model Law, including the manner in which consistent cross-border insolvency frameworks can facilitate foreign investment and growth, could also be further highlighted in a revised edition of the Enactment Guide to appeal to legislators considering the adoption of the Model Law.
Indeed, in the course of one of the panel discussions held during the Colloquium, which focused specifically on how framing revisions to the Enactment Guide may help to encourage the further adoption of the Model Law [12], it was noted that the economic benefit of the Model Law – including its potential to increase foreign investment – was a key motivating factor in New Zealand’s early adoption of the Model Law [13].
The potential for those outcomes to be compromised if adopting states implement the Model Law in a more restrictive manner than intended in the original text could also be highlighted, to encourage consistent implementation standards in the minds of legislators. For example, the potential deterrent impact on foreign investment in states that permit courts to decline recognition and relief on broad public policy grounds could demonstrate to adopting states the advantage of implementing the full text of the Model Law without modifications. The success of jurisdictions such as Singapore that have adopted the Model Law in a more liberal manner as a key component of building a highly regarded global restructuring hub could also be highlighted.
A new version of the Enactment Guide could also build on the commentary in relation to foreign proceedings and COMI, added when the Enactment Guide was last updated in 2014. A key distinction should be drawn between “good” and “bad” forum shopping – correcting the common misassumption that any attempt by a debtor to relocate its operations to new jurisdiction or establish other relevant connecting links to an alternative jurisdiction for restructuring purposes necessarily reflects bad motives. Rather, a COMI shift may in fact enable the debtor to resort to a more flexible restructuring process which enhances creditor returns and preserves jobs and business continuity. Again, practical scenarios and worked examples could assist in conveying complex concepts in simple terms to states which have vastly different levels of experience and sophistication in the implementation and administration of insolvency laws.
To enhance consistent application and interpretation in the context of an increasingly complex and fast-paced economy, and the scale of change we are now seeing, a new version of the Enactment Guide could also offer guidance on how courts might practically advance recognition while navigating those complexities, and what may be appropriate to consider in ordering discretionary relief.
For example, in the ESG context, we have seen considerable regulatory changes – across climate disclosure, environmental compliance, modern slavery, cybersecurity, data protection, privacy breaches and more – particularly since the pandemic. This gives rise to increased litigation, and a greater insolvency risk, for companies. There is a critical question on the extent to which enforcement rights arising from important public policy goals reflected by ESG regulations may justify special relief, or be considered to satisfy the public policy exception for refusing recognition under the Model Law.
As the ESG dynamic continues to rapidly change, commentary on these matters, and the contexts in which a court in an enacting state may be expected to deal with complex ESG regulatory matters impacting creditors, debtors and practitioners, would enhance cohesion and consistency.
The role of AI within the Model Law framework would also be a valuable addition to the Enactment Guide. AI is now being actively used in the restructuring and insolvency industry, both by practitioners and courts. In the cross-border insolvency context, there is a particular opportunity for AI to enhance procedural efficiency in the recognition process, assist in the drafting of judgments, achieve more proactive and effective communication and cooperation between courts, and facilitate greater access to courts from creditors and foreign representatives.
These matters could be usefully outlined in the Enactment Guide. Reference could be made to the success Colombia has had in using AI to enhance the efficiency of court processes in insolvency matters, including in verifying documents submitted by parties, drafting decisions and automating routine procedural steps.
The path ahead
After highly engaging and robust deliberations during the Colloquium – at which there was strong consensus for revisions to the Enactment Guide to be advanced as a priority agenda item for Working Group V – the UNCITRAL Secretariat will now consolidate the themes raised during the Colloquium. A program of work to guide the advancement of amendments to the Enactment Guide will hopefully be presented alongside Working Group V’s 68th Session in New York in April 2026.
Significant updates to the Enactment Guide could play a significant role in modernising the Model Law framework – ensuring the cross-border insolvency normative system of which it acts as the central pillar – continues to evolve and remain fit for purpose in global economic, financial and social conditions now defined by continual change, fluctuation and volatility.
Yet revisions to the Enactment Guide should not only be seen as means for the Model Law to "keep pace" with the scale of this change. Rather, a comprehensively revised Enactment Guide may serve as an active counter to the fragmentation, protectionism and movement away from multinational cooperation we have seen in the global economy in recent times.
By encouraging greater consistency in the adoption, implementation and interpretation of the Model Law, and demonstrating how cooperation and recognition in cross-border insolvency matters can align with evolving economic conditions such as ESG challenges and advances in AI, a revised Enactment Guide could function as a persuasive, respected and powerful tool in the minds of legislators, regulators and courts.
This could, in time, support a rebalancing of the “de-globalisation” trend, and see a movement back towards the very convergence and economic integration which the Model Law was first conceptualised to advance at the time of its original adoption nearly 30 years ago.
*The article was originally published by Norton Rose Fulbright.
[1] Yet to be adopted by any jurisdiction, though currently under active consideration for adoption by Singapore, after the United Kingdom’s earlier adoption efforts appear to have stalled.
[2] Felicity Deane and Rosalind Mason, “The UNCITRAL Model Law on Cross-Border Insolvency and the Rule of Law” (2016) 25(2) International Insolvency Review 138.
[3] The Honourable Justice Kannan Ramesh, “Modified Universalism in a Fractured World – Fault Lines, Fissures and Failures”, Keynote Address, Restructuring and Insolvency Academic Forum, 6 November 2025 (Fault Lines), [7].
[4]Debaranjan Goswami and Andrew Godwin, “India’s Journey Towards Cross-Border Insolvency Law Reform” (2024) 19 Asian Journal of Comparative Law, 197-215.
[5] Kazuhiko Yamamoto, “New Japanese Legislation on Cross-Border Insolvency as Compared with the UNCITRAL Model Law” (2002) 11 International Insolvency Review 67.
[6] [2024] SGHC(I) 1.
[7] Garuda, [94].
[8] See the leading judgment in Re Eurofood IFSC Ltd [2006] Ch 508, [29]-[37].
[9] See, for example, Re Railpower Hybrid Technologies Corp 09-41498-WWB (Bkrtcy WD Pa, 2009). See also Re Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd 374 BR 122.
[10] Re Videology Ltd [2018] EWHC 2186.
[11] See Legend International and also Wood v Astra Resources Ltd [2016] FCA 1192.
[12] Panel 1, “Recent Initiatives to Enact the Model Law to Frame the Updates to the Guide to Enactment and Interpretation, 11 December 2025. Scott Atkins was one of the panellists.
[13] See the New Zealand Law Reform Commission’s special report, Cross-Border Insolvency: Should New Zealand Adopt the UNCITRAL Model Law on Cross-Border Insolvency?, Report 52, February 1999. With thanks to Steven T Kargman for this valuable contribution in Vienna on 11 December 2025.