REPRESENTATIVES
Dominique D’Allaire (head of delegation and representative - Justice Canada)
Paul Morrison (Senior Analyst, Corporate, Insolvency and Competition Policy Directorate with Innovation, Science and Economic Development Canada)
The Honourable Geoffrey B. Morawetz (advisor - Ontario Superior Court of Justice)
Terry Czechowskyj (advisor - Canadian Bar Association)
Professor Janis Sarra (advisor - University of British Columbia)
Philippe Belanger (advisor - Insolvency Institute of Canada)
INTRODUCTION
Following the WG session in December of 2016 the Canadian delegation took the initiative to prepare a paper for presentation to the WG for the May 2017 session in relation to the proposed model law on recognition and enforcement of insolvency-related judgments. The department of Justice Canada requested comment and input from various Canadian stakeholders which included the CBA in January and February of 2017. The Canadian delegation paper was submitted to UNCITRAL on March 29, 2017 for review by all participating delegations of WG V. A copy of the Canadian delegation position paper is attached for your review. As a result the Canadian delegation was very active at this session with numerous interventions made during the debate on the various issues raised. This report outlines the main issues considered by Canada in the context of the 51st session of the UNCITRAL WG on Insolvency held in New York, from May 10-19, 2017. The full report of the WG's deliberations and conclusions is also attached for those interested.
INSOLVENCIES OF MULTINATIONAL ENTERPRISE GROUPS
In considering the WG V’s report on this topic a number of key principles were reviewed and adopted for editing by the Secretariat for the next session to be considered for inclusion in the Model Law or Legislative Guideline. The definition of “Enterprise “and Enterprise Group” has been agreed to in substance. Issues of concern continue with cooperation and coordination of preceedings.as well as how solvent entities can be involved in the restructuring process. WG V is agreed that any participation by a solvent entity should be voluntary and not affect or alter existing creditor rights of that solvent entity. Draft text will clarify that participation by a solvent entity does not equate to the solvent entity being bound by insolvency legislation. Participation of a solvent entity should be limited to procedural matters such as a right to be heard and participating with negotiations of the proposed restructuring.
CROSS BORDER RECOGNITION OF ENFORCEMENT OF INSOLVENCY RELATED JUDGMENTS
The Canadian delegation made numerous submissions as outlined in the paper presented to the Working group which expressed the concern that protective measures including a stay of proceedings be a part of the draft model law. WG V debated extensively over the definitions of what constitutes a foreign proceeding, who qualifies to be a foreign representative and what constitutes a foreign insolvency related judgment. The Secretariat revised the draft of the current working paper which is attached as an annex to the report of the WG-V for review by the WG at the next session.
INSOLVENCY OF MICRO, SMALL AND MEDIUM-SIZED ENTERPRISES (MSME’s)
There was discussion on the importance of dealing with micro, small and medium sized enterprise (MSME) insolvencies. The Commission has clarified the mandate for the WG on this topic to develop appropriate mechanisms and solutions for MSME insolvencies. WG-V shall undertake this work at the completion of the current topics being reviewed. The form of the work to be undertaken by WG-V will be decided at a later time based on the nature of the solutions being developed.
CONVENTION PROPOSAL
Delegations have been meeting on an informal basis to consider the feasibility of developing a convention on international insolvency issues and adoption of the model law.
NEXT STEPS
The WG is expected to finalize its work on recognition and enforcement of insolvency-related judgments at its 52nd session, scheduled from December 18-22nd 2017 in Vienna. In the meantime, the Secretariat is expected to hold experts group meetings in an effort to further develop the text in preparation for the next session of the WG.