30 March 2023
VIENNA, 30 March (UN Information Service) – With the issuance of the Rules of Cross-Border Bankruptcy Proceedings on 16 December 2022, Saudi Arabia becomes the 56th State to have enacted legislation based on the UNCITRAL Model Law on Cross-Border Insolvency (MLCBI).
This achievement is the result of the close cooperation that Saudi Arabia and the UNCITRAL secretariat have maintained since 2019. The main aim of this cooperation is to reinforce the commercial legal framework in Saudi Arabia and enhance the capacity of various stakeholders (e.g. government bodies, legal professionals) to apply and implement UNCITRAL texts. The enactment of the MLCBI follows the ratification of the United Nations Convention on International Settlement Agreements Resulting from Mediation (New York, 2018) (the "Singapore Convention on Mediation") by Saudi Arabia. Saudi Arabia is also finalizing a law based on the UNCITRAL Legislative Guide on Key Principles of a Business Registry and there are additional ongoing reforms involving UNCITRAL texts related to the digital economy and the international sale of goods.
Since its adoption in 1997, the MLCBI has become a ground-breaking text in an area of law that has traditionally been considered very difficult to harmonize at a global level because of the many policy issues involved. In adopting the text twenty-five years ago, UNCITRAL united the international community behind the recognition that national insolvency laws, ill-equipped to keep pace with cross-border insolvencies, elevate risks of concealment or dissipation of assets and reduce chances of rescuing viable business or efficiently liquidating non-viable businesses. The MLCBI provides a template for States to address those issues. The MLCBI respects the differences among national procedural laws and does not attempt a substantive unification of insolvency law. It offers solutions that help in several modest but significant ways. These include the following: foreign assistance for an insolvency proceeding taking place in the enacting State; foreign representatives' access to courts of the enacting State; recognition of foreign proceedings; cross-border cooperation; and coordination of concurrent proceedings.
The United Nations Commission on International Trade Law (UNCITRAL) is the core legal body of the United Nations system in the field of international trade law. Its mandate is to remove legal obstacles to international trade by progressively modernizing and harmonizing trade law. It prepares legal texts in a number of key areas such as international commercial dispute settlement, electronic commerce, insolvency, international payments, sale of goods, transport law, procurement and infrastructure development. UNCITRAL also provides technical assistance to law reform activities, including assisting Member States to review and assess their law reform needs and to draft the legislation required to implement UNCITRAL texts. The UNCITRAL secretariat is located in Vienna, Austria. For more information, visit: uncitral.un.org.
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For information, please contact:
José Angelo Estrella-Faria
Principal Legal Officer and Head, Legislative Branch
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