Учебный год 2023 / phd

multilateral and regional co-operation arrangements. Development of these forms of arrangements in the recent years was intensified and driven by the implementation of liberalization policies undertaken under the auspices of the multilateral institutions from the mid 1980s and early 1990s in most of the SSA countries.2 The main aim of the arrangements is to facilitate co-operation in trade and investment through provision of a conducive environment that ensures stability, predictability and certainty in commercial transactions and thus reduction of transaction costs and consequently enhances the accessibility of credits. As far as SSA countries are concerned, the arrangements are meant to boost the inflow of capital, enlarge their markets and enhance their participation in international trade, with the ultimate result of contributing to economic growth and poverty reduction. The co-operation arrangements concluded thus far provide a very strong legal basis for a continued interdependence and crossborder links between SSA countries and the outside world.

Apart from the bilateral trade and investment co-operation arrangements with, mainly, developed countries in Europe and more recently with China, SSA countries are member states of regional arrangements within and to some extent beyond the SSA region.3 Tanzania and Kenya are, for example, members of the East Africa Community (“EAC”), and individually and respectively are also members of the Southern African Development Community (“SADC”) and the Common Market for Eastern and Southern Africa (“COMESA”). Other SSA countries are also members of other similar arrangements such as the Economic Community for West African States (“ECOWAS”), the Organization for

Corporations and Infrastructure Challenge (United Nations, New York 2008); and UNCTAD, Economic Development in Africa Report 2009: Strengthening Regional Economic Integration for Africa’s Development (United Nations, New York 2009); and JL Westbrook, A Global View of Business Insolvency Systems (World Bank, Washington 2010) 227

2 J Stiglitz, Globalisation and its Discontents (Penguin Books, London 2002)16, 80-88; A Anghuie, Imperialism, Sovereignty, and the Making of International Law (Cambridge, CUP 2004) 245, 258-262. See also generally, M Chossudovsky, The Globalisation of Poverty: Impacts of IMF and World Bank Reforms (London, Zed Books 1997) and V Mosoti (n 1)

3 UNCTAD (n 1) 15 and 34; JW Salacuse, ‘The Treatification of International Investment Law’ (2007) 13 Law & Bus Rev Am 155, 163; R Jenkins and C Edwards, ‘The Economic Impacts of China and India on Sub-Saharan Africa: Trends and Prospects’ (2006) 17 Journal of Asian Economics 207–225; and F Söderbaum and P Stalgren, The European Union and the Global South (Lynne Rienner Publisher, Colorado 2010)

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Harmonization of Business Law in Africa (“OHADA”), and the Economic Community of Central Africa States (“ECCAS”).4 Some statistics suggest that on average each SSA country is a member of at least two regional arrangements and maintains an average of twelve bilateral investment treaties with other countries.5 The importance of the regional schemes and the other facilitation arrangements is in relation to the opportunity they create for exploitation of economies of scale which entails regional specialization and attraction of investment by enlargement of the market.6

Effective implementation of the arrangements enhances cross-border cooperation in trade and investment among the participating member states. The increased cross-border co-operation in trade and investment means increased involvement of business enterprises, especially multinational corporations which transcend their home country’s borders to invest and trade in the host countries such as in SSA. It also implies the increased movement of people across national borders, and the consequent increase in business competition. 7 Indeed, as crossborder trade and investment is enhanced, the integration of SSA countries in the global economy is bolstered, so is the exposure of the countries to cross-border implications whose solution might need a transnational approach.8 One implication relevant to the present context is the potential problem of insolvencies having an international element which would mandate extra vigilance and co-operation in regulation and dealing with them similar to, and perhaps to a greater extent than other problems that have long received attention. It is, indeed, in this context that some regional communities such as those of the European Union (“EU”), North America Free Trade Agreement (“NAFTA”) and OHADA, have crafted regimes for cross-border insolvency regulation among member countries, based on the recognition of the need to foster free movement

4R Shams, ‘The Drive to Economic Integration in Africa’ (2005) Hamburgisches Welt- Wirtschafts-Archiv (“HWWA”) Discussion Paper No 316 < http://www.hwwa.de > accessed 12 March 2009

5V Mosoti (n 1)

6DK Mbogoro, Global Trading Arrangements and Their Relevance to Tanzania Economic Development: Challenges and Prospects, (Friedrich Ebert Stiftung, Dar es salaam 1996)

7DK Mbogoro (n 6)

8HK Amani, ‘Challenges of Regional Integration for Tanzania and the Role of Research’ (Open University of Tanzania Convocation General Meeting Address 2005)

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of goods and service for trade and investment purpose.9 It is in the same context that treaties for co-operation in cross-border insolvencies among countries with significant commercial relations were concluded in the past. 10

The arrangements have influenced considerable changes and reforms in SSA countries in regard to cross-border trade and investment.11 The reforms have been undertaken in the context of the continued implementation of the IMF/World Bank structural adjustment programmes which culminated in the liberalisation of trade and investment and the consistent need for creation of an enabling environment for capital flow and trade.12 The implication of the reforms includes intensification of the challenges of potential cross-border insolvencies in SSA countries which would ordinarily require an appropriate and relevant legal framework. Since SSA is relatively less integrated into the global economy than are the developed countries and the majority of the emerging economies outside SSA region, the potential effect of cross-border insolvencies might be considerably less than in developed countries.

Despite the potential cross-border insolvencies resulting from the changing business environment and the actual occurrences of a series of high profile crossborder insolvency cases in other jurisdictions which have bilateral co-operation with most of the SSA countries, it has relatively taken long for legislative attention to start to emerge in SSA countries to address the challenge.13 Regional arrangements of which these countries are members provide an avenue for the making of protocols on trade co-operation, investment and finance in order to address such issues as harmonisation and settlement of trade disputes.14 The

9B Wessels, BA Markell and JJ Kilborn, International Cooperation in Bankruptcy and Insolvency Matters (OUP, Oxford 2009 ) 101

10B Wessels, BA Markell and JJ Kilborn (n 9) 101

11WP Ofosu-Amaah, Reforming BusinessRelated Laws to Promote Private Sector Development: The World Bank Experience in Africa, (World Bank, Washington 2000) ; and JW Salacuse, The Law of Investment Treaties (OUP, Oxford 2010)

12WP Ofosu-Amaah (n 11); JW Salacuse, ‘From Developing Countries to Emerging Markets: A Changing Role of Law in Third World’ (1999) 33 Int’l L 875

13The exception is Republic of South Africa and Eretria which are among the first countries in the world to adopt the Model Law.

14Treaty for Southern African Development Community (“SADC”) Art 21 and 22 (1); and Treaty for Establishment of East Africa Community (“EAC”) Art 126(2)(b), 131 and 152

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inter-regional arrangements provide for requirements for reform in a bid to institutionalise the rule of law, good governance and liberalisation of the market, to mention but a few, as part of the requirements for SSA countries to enjoy the benefits offered by such arrangements.15 Arguably, the room for the making of protocols and the requirement for reform have all the potential for ensuring the availability of legal frameworks for regulation of cross-border insolvencies. In addition, the requirement for reform to SSA countries potentially means pressure on the part of such countries as regards the reform of insolvency related laws.

It is only OHADA within SSA that has widely been acknowledged for institutionalising a regional cross-border insolvency regime among its sixteen Francophone member states.16 Based on uniform law, the regime reflects the French civil law and has arguably failed to attract other Franco-phone and Anglo-phone countries as earlier anticipated.17 Since it was enacted and brought into force, it has been modestly implemented and used in appropriate cases, which could raise questions as to its appropriateness and suitability of the approach it takes.18

The drive for global convergence of the insolvency laws and cross-border insolvency in particular (as signified by the enactment of the UNCITRAL Model Law on Cross-Border Insolvency and its adoption by the subsequent international initiatives by the World Bank, IMF and the UNCITRAL) has, under the auspices of the multilateral institutions, paved the way for development of global insolvency norms providing standards of benchmarks on the basis of which and

15 Text to part 4.6 in Chapter 4

16These are Benin, Burkina Faso, Cameroon, Central African Republic, Comoros, Congo, Ivory Coast, Gabon, Guinea, Guinea-Bissau, Equatorial Guinea, Mali, Niger, Senegal, Chad and Togo. See, B Martor, N Pilkington, DS Sellers and S Thouvenot, Business Law in Africa: OHADA and the Harmonisation Process (Kogan, London 2002) 20; and RF Oppong ‘Re-Imagining International Law: An Examination of Recent Trends in the Reception of International Law into National Legal Systems in Africa’ (2007) 30 Fordham Int’l LJ 296, 307 and 308

17Text to n 179 in chapter 4. Notably, Cameroon which is a member state of the OHADA is both Francophone and Anglophone state given its past French and British colonial history.

18JA Owusu-Ansah, ‘The OHADA Treaty in the Context of International Insolvency Law Developments’ < www.iiiglobal.org > accessed 6/11/2008; and B Wessels, International Insolvency Law (Kluwer, Netherland 2006) 47

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against which domestic insolvency laws could be crafted and adjudged.19 The assessment as to the extent to which developing countries observe the norms and provision of advice on how reform ought to be effected on the laws is the domain of the multilateral institutions. Indeed, the leverage of the multilateral institutions, reinforced by the vulnerability of the developing countries and the intricacies of the globalised economy, seems to have the potential to influence developing countries in SSA to comply with the insolvency benchmarks to the extent of undermining the local contexts.20

The review of literature that has been undertaken shows that, although a body of literature has developed in recent years in the area of cross-border insolvency, this scholarship has been dominated by scholars from the United States and Europe writing mostly from the perspective of advanced economies. Accordingly, an insight from the perspective of SSA is lacking. There is therefore an apparent dearth of literature that dwells on SSA in respect of the area under study, though the existing literature provides an important theoretical background for examination and discussion of cross-border insolvency from the perspective of SSA.

19World Bank and UNCITRAL, ‘The Unified Creditor Rights and Insolvency Standard Based on World Bank Principles for Effective Creditors Rights and Insolvency Systems and UNCITRAL Legislative Guide on Insolvency Law’ <http://www.worldbank.org/ifa/FINAL-ICRStandard- March2009.pdf> accessed 22 July 2009. The Unified Global Insolvency Standard is based on and integrates the World Bank Principles for Effective Creditor Rights and Insolvency Systems and the UNCITRAL Legislative Guide on Insolvency Law. Thus, the unified standard essentially incorporates the benchmarks of all the previous efforts. It is noteworthy that the UNCITRAL Legislative Guide on Insolvency Law has had advantages of taking into account all the previous efforts including the IMF and World Bank’s initiatives documented in IMF, ‘Orderly and Effective Insolvency Procedures –Key Issues (IMF, Washington 1999); and World Bank,

Principles and Guidelines for Effective Insolvency and Creditor Rights Systems (World Bank, Washington 2005). Recently, the UNCITRAL Working Group V dealing with insolvency matters has addressed the problem of multinational groups in insolvency. Its work has led to recommendations for inclusion of a new part of the UNCITRAL Legislative Guide on Insolvency Law providing international standards in the area of insolvency of groups. See I Mevorach, ‘European Insolvency Law in a Global Context’ [2011] JBL 666, 667

20TC Halliday, ‘Legitimacy, Technology, and Leverage: The Building Blocks of Insolvency Architecture in the Decade Past and the Decade Ahead’ 32 Brook J Int’l L1081; TC Halliday, and BG Carruthers, Bankrupt: Global Lawmaking and Systemic Financial Crisis (Stanford University Press, California 2009); and K Pistor, ‘The Standardization of Law and Its Effect on Developing Economies’ (2002) 50 Am J Comp L 97, 102

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The existing theories on cross-border insolvencies, as well as the global insolvency benchmarks that have emerged in recent years, have almost exclusively been developed and addressed from the viewpoints of developed economies, which are not necessarily relevant to developing countries, especially the least developed economies, such as those of SSA. Accordingly, the position of these countries, the least developed ones in particular,21 deserves to be considered, given the pressures towards globalisation and convergence of laws. There is thus the potential for the pressure to result in unsuitable legislative reforms in SSA countries which, because of their socio-economic situations, can hardly withstand the pressure.

1.3Research Problem

The focus of this study is on the looming risk of failure of SSA legislative processes to craft appropriate and workable legislation for regulating crossborder insolvencies as a part of the efforts to foster an improved environment for private sector development and economic growth.22 The failure entails two potential aspects. The first is the failure to recognise and draw on the growing challenge of potential cross-border insolvencies emerging from the increasing cross-border co-operation in trade and investment. And the second is the failure

21The least developed countries (“LDCs”) the majority of which being in SSA, represent the poorest and weakest segment of the international community. These countries are characterized by their exposure to a series of vulnerabilities and constraints, such as limited human, institutional and productive capacity; acute susceptibility to external economic shocks, natural and man-made disasters and communicable diseases; limited access to education, health and other social services and to natural resources; poor infrastructure; and lack of access to information and communication technologies. As such, the LDCs are considered to be in need of the highest degree of attention on the part of the international community. Criteria used by the UN to classify a country as among the LDCs include: low income, in the light of a three-year average estimate of the gross national income per capita; weak human assets, and economic vulnerability. See for instance UN, Programme of Action for the Least Developed Countries Adopted by the Third United Nations Conference on the Least Developed Countries in Brussels on 20 May 2001 UNITED NATIONSA/CONF.191/11 8 June 2001, <http://www.unctad.org/en/docs//aconf191d11.en.pdf> accessed 24/11/2009. With regard to SSA, this study adopts the ordinary meaning of SSA which refers to the region consisting of countries situated in the area of the African continent which lies South of the Sahara. However, South Africa is excluded from the consideration and treatment of the SSA perspective. This is because South Africa is relatively more advanced than most of SSA countries in economic terms and cross-border insolvency matters.

22E Rubin, ‘The Conceptual Explanation for Legislative Failure’ (2005) 30 Law & Soc Inquiry

583. Rubin notes how legislative failure has been a subject of concern and attention by scholars from different disciplines such as law, political science and sociology.

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