The goals and theories of the new Ethiopian insolvency regime against global benchmarks

Abstract

This study offers a comprehensive examination of the goals and theoretical foundations of the new Ethiopian insolvency regime. The study identifies and examines the goals of insolvency in Ethiopia to ascertain which interests are protected and how. The study also identifies and analyses the theoretical foundations of the new Ethiopian insolvency law in determining the parties' interests to be protected. The study also evaluates the alignment of the goals and theories of Ethiopia's latest insolvency regime with the global best practice. The study underlines that, as a contemporary legislation, the new Ethiopian insolvency law follows an eclectic approach in determining its goals. The law aims to safeguard the interests of creditors and other stakeholders in the proceeding, thereby trying to strike a balance. However, the main goal of Ethiopian insolvency law is to protect creditors' interests. The study also found that the modern theories of insolvency worldwide have highly impacted Ethiopian insolvency law in determining and prioritising its goals and interests to be protected. The study underlines that Ethiopian insolvency law's theoretical foundations are also eclectic, with a substantial preference for safeguarding creditors' interests while protecting the interests of other insolvency stakeholders. The study also finds that Ethiopian insolvency law is modern, and its goals and theoretical foundations align with international best practices. Based on the discussions, the study also suggests the focal points and trajectory of future insolvency reforms in Ethiopia.