This note makes a cost-benefit analysis of the U.S. Bankruptcy Code Chapter 15 and International Commercial Arbitration in the context of cross-border bankruptcy proceedings. Part I sets the stage by providing two opposing theoretical approaches to cross-border insolvencies: territorialism and universalism. Part II introduces the UNCITRAL’s Model Law on Cross-Border Insolvency, which is incorporated into the U.S. Bankruptcy Code Chapter 15. It presents how the Model Law has attempted to compensate for the lack of a global court by incorporating universalism. Part III demonstrates that while Chapter 15 sounds good in theory, it fails to address the very issue it was enacted to address. It also provides two primary reasons as to why Chapter 15 fails. Part IV assesses the clash between the Federal Arbitration Act (“FAA”) and the U.S. Bankruptcy Code. Finally, Part V both critiques International Commercial Arbitration as a remedy due to its unpredictable enforcement by courts in the United States, and also applauds its ability to provide cross-border insolvencies more uniformity and predictability due to its contractual nature.
Young Hye (Martina) Chun,
Cross-Border Insolvencies: To “Universalize” or to Arbitrate?,
17 Pepp. Disp. Resol. L.J.
Available at: http://digitalcommons.pepperdine.edu/drlj/vol17/iss1/3