Debtor's Welcome to their Brother
Debtor's Welcome to their Brother
On the section of jurisdiction, the Chairman emphasised that the committee’s recommendations on jurisdiction had to be stressed. The Chairman suggested that the powers of liquidators should be specified when they decide to risk the rights of one class of creditors to get a totality of the whole body of creditors.
There was a need to harmonies the rules under which a person could be declared bankrupt. Lack of harmonisation would lead to someone not being able to be declared bankrupt if the centre of administration was in another member state.
The inclusion of private international law of Member States under Article 19 should also be clarified. Article 20 should include a clause on the cessation of power of an insolvent company’s directors to deal with its property. Articles 21-34, 47, 36,37,38 and 39 were also discussed.
Article 50’s translation from French should be redrafted to replace the word ‘liberty’ with ‘freedom’. A number of brief comments were made about Articles 49-60, 61-67. There is an in-depth discussion on Article 76.
The major topic discussed in this meeting was the Uniform Law under various Articles. The Committee expressed its support to delete Clause 2, and gave its reasons at para.12.
The Committee agreed on its objections on U.L.1. On cessation of payments, the committee says that U.L.4 was inconsistent with Scots Law. The Committee considered the possibility of whether the Protocol should include an Article setting out the implications of cessation of payment in each state.
A uniform meaning of cessation of payment was deemed necessary to avoid risks of inconsistency. A strict universal definition was not itself necessary, but a clause should be added to specify that the applicable definition should be that of the state of the bankruptcy. The committee also suggested that some clarification be made as to the meaning of ‘moral obligation’ and ‘unusual circumstances’ in Article 4. Some other redrafting suggestions were also discussed. The committee also noted the Scottish College of Justice’s remarks on Article 4(b) 2.
A report of the seventeenth meeting is found on page 27.