Учебный год 2023 / phd

benchmarks which again link to the question of how SSA can have its broader local contexts reflected in cross-border insolvency regulation without violating its various international treaty commitments. It was in that respect noted that the arrangements effectively pull potential cross-border insolvency frameworks of SSA countries towards a universalist stance and away from territorialist approaches. The key finding of this study was that such arrangements, as characterised mainly by the bilateral investment treaties, embody general principles of law which inform and determine the nature and content of SSA host countries’ cross-border insolvency frameworks. This is reinforced by the requirements explicitly advanced by interregional economic arrangements for undertaking and maintaining liberalisation, the rule of law and good governance and the consequent enhancement of the interaction of SSA countries with multinational enterprises involved in international business and hence the potential of SSA countries being involved in a cross-border insolvency situation. It was argued that the increasing number of arbitration claims against developing countries based on the alleged violation of bilateral investment treaties coupled with the emerging trend of renegotiation of such treaties, show how these countries have been caught in between.

An examination of the influence of the colonial legacy on SSA countries’ legal systems as it relates to cross-border insolvencies was undertaken in chapter five, using the application of the English common law in Tanzania and Kenya as a case study. The English common law was chosen for its pronounced influence in the common law jurisdictions in SSA. The chapter evaluated the common law approach to cross-border insolvency and the landscape within which it is applied, before considering the following issues. The first is the suitability of the English common law in helping to address and resolve cross-border insolvency problems as they arise. And the second is the impact of the application of the English common law in the positioning of the existing cross-border insolvency frameworks in SSA countries within the competing cross-border insolvency theories and the international insolvency benchmarks.

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It was found that the application of the English common law approach to crossborder insolvency would have the effect of pulling the cross-border insolvency frameworks of the relevant SSA countries towards modified universalism. However, the extent to which the English common law might apply is, arguably, unpredictable and uncertain as it depends on several factors that cannot be ascertained by any interested party upfront. The key factors are: the extent to which the reception clauses that apply the English common law at least in theory allow the common law to be brought into use; the extent to which existing legislation provides for cross-border insolvency; the judicial attitude towards the common law; the consideration of the extent to which the local circumstances permit and/or qualify its application; the extent to which the common law has already developed a relevant principle for an existing cross-border insolvency problem; and the extent to which judges in the relevant SSA jurisdictions are well facilitated and equipped to access recent developments in the English common law.

From the perspective of countries such as those of SSA which might always be deferring to foreign jurisdictions in insolvency proceedings, the common law approach to cross-border insolvency could be relevant. It offers a framework that could enable such countries to evaluate the fairness of foreign proceedings in relation to local interests before deciding whether and in what manner to cooperate. However, the scope of discretionary powers which the court could exercise under the common law would be limited by the existence of bilateral investment treaty commitments. Such commitments would require the common law to be applied in a manner that is consistent with the stipulations of the relevant bilateral investment treaty. One argument is that the discretionary powers could only be exercised in a manner that promotes and protects foreign investments and investors or is in accord with the legitimate expectation of the investors. Thus, the implication of the cross-border trade and investment arrangements is to restrict the scope of discretionary powers which the court in the countries under study could otherwise exercise under the English common law.

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provide an appropriate balance between the international benchmarks and the local contexts.

The other insight from chapter six is that while within SSA it is only OHADA that has widely been acknowledged for institutionalising a regional cross-border insolvency regime based on uniform law, there has long been in existence a harmonised legal regime for Tanzania and Kenya (in addition to Uganda) for cooperation in cross-border insolvency, referred in this thesis as BRR. Despite being forgotten in the statute books, there is scope for arguing that such a regime is still in force, and that it is also meant to apply to both personal and corporate insolvencies as it is so stipulated in the relevant laws of the relevant countries. It was thus argued that any attempt for development of a modern regional crossborder insolvency regime for the East Africa Community (“EAC”) in which Tanzania and Kenya are member states should start from and be based on, such a historical framework which is already in place and had to some extent been tested. The EAC was used as a representative case study for other SSA regional integrations.

The primary concern of chapter seven was to demonstrate how the relevant local context of the countries under study can be identified from official national policies and used to inform and shape the cross-border insolvency reform process and eliminate the potential risk of ‘too rigid an adherence to global norms which will contribute to a transplant effect of incomplete implementation.’2 While it is certain that local policies inform and shape insolvency systems of different countries, there is limited scholarship on how such policies can be identified, integrated and reconciled with the global insolvency norms in the process of development of a cross-border insolvency law system for a given country. The chapter argued that the perspectives that emerge from the analysis of the selected national policies are twofold. Firstly, they point to modified universalism as the

2 TC Halliday, ‘Lawmaking and Institution Building in Asian Insolvency Reforms: Between Global Norms and National Circumstances’ (5th Forum for Asian Insolvency Reform, Beijing, 27-28 April 2006) < http://www.oecd.org/DAF/corporate-affairs/ > accessed accessed 17 July 2009 [33]

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appropriate theoretical framework in SSA context. This theoretical approach could be implemented by the adoption of a customised version of the UNCITRAL Model Law that reflects the local policy perspectives emerging from the relevant official national policies of the countries under study. And secondly, they provide an important insight into the local policy perspectives that are essential for a deep reflection and understanding of the context within which a cross-border insolvency framework in SSA countries would be crafted and operate using the Model Law as a template. Such adaptation can, among other things, be done in a manner that also reflects and recognises the need for a special arrangement based on long established trust with countries with which the countries under study have bilateral co-operations and long standing relationships.

It was noted that some of the local interests emerging from the local policy perspectives may not fall directly within the ambit of the insolvency law system but in other laws which must be considered as they might be integral to the effective operation of the cross-border insolvency law. It was shown that the policy perspectives also inform the ingredients of the cross-border insolvency law systems, such as the nature and scope of priority system in the cross-border insolvency setting. The significance of using the official policies was noted to be important because they help create harmony in the entire legal systems of the countries under study since it is from such policies that any reform in any area of law in such countries must be based, as is the case also for most of the actions of the governments.

Given the policy emphasis placed on regional co-operations, it was argued that a special arrangement might be needed for dealing with co-operation in insolvencies involving member states in a regional integration such as the EAC. While the BRR, OHADA Law and ECIR were found to have relevance in the EAC which was used as a case study, it was argued that any reform measure for the EAC cross-border insolvency regime should take account of the BRR which offers an important historical context. Consideration was also given to the

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significance of adoption and implementation of the Model Law as a regional integration instrument in the EAC as part of its harmonisation policy requirement. This would be a very significant development that is commensurate with the need for enlargement of the market that the EAC seeks to achieve. Despite the novelty of such idea, which may require further research as to its practicality, its implementation would help to create a clear link with the outside world in matters of cross-border insolvency.

The merits of the EAC (as an example of SSA regional integrations), integrating with OHADA were noted as a step towards achieving an African-wide crossborder insolvency framework in the longer term. In addition, the chapter also considered the practicality of Tanzania and Kenya (i.e as it is for the rest of the SSA countries) joining OHADA, despite the existence of a number of factors hindering such a move.

8.3Original Contribution of the Study to Knowledge

This study contributes to the existing scholarship on cross-border insolvency in different respects. Firstly, it contributes to the literature by tackling cross-border insolvency from the perspective of SSA countries, using Tanzania and Kenya as case studies. As pointed out above, such perspective has been lacking in the literature, although a substantial body of literature has developed in recent years. One possible reason is owing to the fact that this scholarship has been dominated by scholars from the United States and Europe writing from the viewpoints of advanced economies which might not necessarily be relevant to SSA. Nevertheless, the literature was immensely beneficial in providing general theoretical backgrounds necessary in considering and developing the SSA perspective based on Tanzania and Kenya as representative case studies.

Secondly, the study contributes to knowledge by generation of an in-depth theoretical insight and understanding of the dynamics of the challenges that SSA countries face in the endeavour of crafting a workable and appropriate framework for cross-border insolvency legislation. The challenges are multifaceted as discussed above.

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and to what extent. The implication of such arrangements is to render the flexibility to be only exercised in a manner that promotes the objectives of the arrangements.

Fourthly, the study also contributes to knowledge by providing an insight into the link between the increasing cross-border trade and investment and the growing challenge of cross-border insolvencies. Although the international insolvency benchmarks could be useful in helping reforms that would address the challenges, such contribution might not be achieved given the inherent weaknesses of the initiative for assessment of the observance of the standards.

Last but not least, the study contributes to knowledge by providing a framework for determining the local policy context that might be considered for use as guidance in crafting a workable and appropriate legislation for cross-border insolvency which is sensitive to local interests and international insolvency benchmarks. Most studies underscore the crucial role played by the local policies but they do not address the challenge of identifying the same and negotiating them against and in relation to the existing international benchmarks in crafting a suitable framework for legislation. This study addressed this gap by employing official national policies of the studied countries to demonstrate how they can be used to provide the local contexts and the challenges that may arise in the process. The local policy perspectives that emerge from the national policy analysis, strongly suggest the following key reform measures. Firstly, modified universalism is the appropriate theoretical approach for crafting a cross-border insolvency law system for the countries under study, given their special circumstances. Secondly, the Model Law is relevant and indeed well suited to be customised and adapted to accommodate the local contexts using modified universalism as the organising theoretical framework. Thirdly, the existing bilateral co-operations and long standing traditional relationships between the countries under study and foreign countries appear to dictate a different approach that is based on the existing trust. On this point, it is argued that such special arrangement can still be well accommodated within the adopted version of the

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Model Law or through conclusion of a separate mutual agreement. And fourthly, given the importance accorded to regional integration in SSA using the EAC as a case study, it is important to have a regional cross-border insolvency regime that is based on the relevant historical, cultural, and socio-economic values. However, the Model Law should also be adapted within the context of the regional integration to facilitate co-operation in cross-border insolvencies with foreign countries that do not fall within the regional integration.

8.4Recommendations and Implications for Policies and Legislation

The insights from the findings of this study have significant implications for policies and legislation in the studied countries and in the discourse regarding cross-border insolvency and law reform in developing economies. Firstly, this study underscores that development of effective cross-border insolvency systems is now more relevant in SSA countries than it was before. The increasing involvement and integration of SSA countries into the global economy through cross-border trade and investment is the main contributing factor. This factor is underpinned by the efforts that these countries have over the years been making to compete in promoting and attracting cross-border trade and investment through liberalisation of their economies and the creation of a conducive legal environment with support from the multilateral institutions. This calls for an informed intervention which is conscious of both local circumstances and the existing international insolvency standards. Such an intervention will eliminate the risk of falling into unsuitable legislation that rigidly adheres to the global norms at the expense of the local contexts.

Secondly, consideration should be given to official national policy documents to help in setting the local contexts that the law should serve or be based upon. To avoid any potential problem of indeterminacy of the local policies it is important that any reform undertaking should also resort to extraneous means that go beyond the official national policies. Such undertaking must involve local experts knowledgeable in the local circumstances. Thirdly, the existence of bilateral investment treaties and other similar arrangements means that such countries must pay close regard to such arrangements when considering and

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undertaking the actual reform. In addition, such countries must be prepared to renegotiate such arrangements, such as the bilateral investment treaties, with a view to clearly addressing the approach that has to govern cross-border insolvencies involving the contracting states. Renegotiation of bilateral investment treaties can validly be pursued within the on-going trend of renegotiation of the treaties which is supported by the UNCTAD through its capacity building programmes. Fourthly, lack of experience and cases in these regards means that these countries should avoid complexities and adopt a gradual approach to the reform. The recommendation offered in this study as to how reform could be approached is unlikely to result in a complicated legislative framework. The reform in that regard could also be undertaken gradually in a piece meal manner.

8.5Limitations and Areas for Further Research

There are several limitations in this study. Firstly, materials relevant to the study for SSA countries were not readily available and accessible. This was aggravated by the lack of scholarship on this area undertaken from the perspective of SSA countries. Analysis of the situation of these countries relied much on the primary sources of law though it was not that easy to lay hands on a significant amount of the few cases that could be relevant to the discussed issues. As case law reporting is inadequate and in some instances non-existent, it was rather difficult to establish the existence of relevant cases. Analysis of the reports by the IMF and World Bank, especially ROSCs was conducted on only a handful of such reports covering African countries that were published and available from the websites of such institutions during the research period for this study. Further reliance had to be made on secondary sources addressing matters related to such reports. These included text books, papers and journal articles, some of them from disciplines other than law.

Furthermore, the scope of the study meant that matters that were relevant and topical but too peripheral to the study were not pursued in detail. Additionally, although cursory and random regard was given to a few of the other SSA countries in specific aspects, it was only two countries that received in depth

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