Bankruptcy Law

As the Draft EBL Amendment remains subject to further rounds of deliberation prior to adoption, its final content may continue to evolve. Nevertheless, the current draft provides a sufficient basis for identifying likely implementation challenges. Foreign representatives are likely to operate in an environment marked by procedural gaps, interpretive uncertainty, and limited judicial experience with […]

Notwithstanding its symbolic and institutional significance, the cross-border insolvency regime in the Draft EBL Amendment falls short of establishing a fully functional and predictable framework for cross-border insolvency. The regime adopts a cautious, control-oriented design that imposes layered substantive conditions, preserves broad judicial discretion, and leaves key operational issues unresolved. A.   Eligibility Constraints on Recognition:

The Draft EBL Amendment introduces a dedicated chapter on cross-border insolvency, replacing the 2006 law’s principle-based provision with a more structured statutory framework. This article examines the draft articles in this chapter and analyzes their principal provisions and legal implications.

This Part traces the development of China’s cross-border insolvency regime under the 2006 Enterprise Bankruptcy Law. It examines how a principle-based provision gradually evolved through judicial guidance, pilot cooperation mechanisms, and early recognition cases, setting the stage for the more structured framework proposed in the Draft EBL Amendment.  1. Article 5 of the 2006 EBL:

China’s proposed amendment to the Enterprise Bankruptcy Law of the People’s Republic of China (“2006 EBL”)[1]represents the most significant reform of its insolvency framework since 2006 and marks a pivotal development in its approach to cross-border insolvency. The Draft Amendment to the Enterprise Bankruptcy Law of the People’s Republic of China (“Draft EBL Amendment”)[2] introduces