Cross-border insolvency in the Balkans region

Abstract

In a constantly evolving world, it is necessary to safeguard trade and investment relations through the establishment of clear rules for cooperation between national courts and practitioners from different jurisdictions on cross-border insolvency cases. While general provisions in national law or in treaties governing cooperation on foreign civil proceedings are helpful, specific provisions in insolvency legislation that regulate the management of insolvency proceedings with a cross-border element contribute to legal certainty and support the flow of international trade and foreign direct investment. These may even signal to potential investors the openness of a particular jurisdiction to foreign investment and trade. A set of rules or framework for international cooperation on cross-border insolvency cases enables efficient judicial decision-making and positively influences insolvency outcomes, from the preservation of assets of the insolvency estate to the fair allocation of such assets to affected creditors and the successful rescue of the insolvent business. The importance of this subject matter is exemplified by global efforts to achieve greater cross-border insolvency cooperation and harmonisation on substantive insolvency law. Such efforts include the UNCITRAL Model Law on Cross-border Insolvency and Legislative Guide on Insolvency Law, as well as regional initiatives such as the Recast European Union Insolvency Regulation and the Uniform Law on Insolvency Procedures by the Organization for the Harmonization of Business Law in Africa, which have harmonised cross-border insolvency rules across member states. This article uses economic analysis, recent jurisprudence and legal theory to explore the importance and evolution of cross-border insolvency frameworks in selected Balkan countries: Greece, Romania and Serbia.