European Insolvency Laws: Convergence or Harmonisation?

In 1895, writing in a Scottish law journal, the doyen of Dutch private international law, Professor Josephus Jitta, put forward three possibilities for progress in the bankruptcy world. The first was to have a world law, passed by a federal parliament assembled for that purpose, although he considered this to be an unattainable objective. The second was the assimilation of bankruptcy rules through the elaboration of a common set of rules to be adopted by domestic legislators. This appeared to be a more practical outcome, although also seemingly difficult to achieve. Lastly, he put the case for a treaty, by which identical rules would be inserted in the laws of state parties. As to the contents of any such treaty, he posited as the minimum rules on jurisdiction (based on the “centre of the business life” of the debtor), publicity for proceedings, transactional avoidance and equality of creditors.1 His call for a treaty has been answered in part through the production of the European Insolvency Regulation, itself the successor to a treatybased model, after a process that endured over 30 years from when the InsolvencyWorking Party was first set up in the late 1960s. The contents of the EIR differ somewhat from Professor Jitta’s list, although there are recognisable elements in common.
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