Saudi Arabia Enacts Legislation Implementing UNCITRAL Model Law on Cross-Border Insolvency

In December 2022, Saudi Arabia became the 56th State to enact legislation implementing the UNCITRAL Model Law on Cross-Border Insolvency (MLCBI). This achievement was the result of the close cooperation that Saudi Arabia and the UNCITRAL secretariat have maintained since 2019.

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.

To date, 58 states have adopted the MLCBI in their domestic legislation including African Countries such as Burkina Faso, Cameroon, Chad, Kenya, Uganda, Central African Republic, Côte d’Ivoire, Ghana, Malawi, Niger, Rwanda and South Africa.

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