Law Times

PAGE 12 FOCUS March 21, 2011 • Law TiMes UNCITRAL guidelines take hold in Canada Latest changes help to expedite international insolvency matters BY DARYL-LYNN CARLSON For Law Times al presence can pose a challenge for its legal team. Yet Canada's courts have be- A come increasingly receptive to recognizing decisions by their for- eign counterparts after the federal government implemented the Model Law on Cross-Border In- solvency developed by the United Nations Commission on Interna- tional Trade Law in 2009. Deborah Grieve, a partner with Cassels Brock & Blackwell LLP's restructuring and insol- vency group, says the courts have since been quite accommodating and open to decisions from for- eign jurisdictions. "Th e Canadian courts have used their inherent jurisdiction reasoning and ap- plied comity to recognize foreign company that becomes insolvent in Canada but has an internation- judgments and to facilitate cross- border proceedings involving sev- eral jurisdictions," she says. As an example of an ongo- ing matter, she cites proceed- ings involving Japan Airlines Corp. While it has fi led for bankruptcy in its home coun- try, the proceedings are being recognized in Canada, Austra- lia, and the United States. Grieve says that while each case will have its own complex- ities, it's encouraging for law- yers who are representing com- panies with foreign interests to know the courts here will rec- ognize decisions elsewhere. Th e recognition of foreign insolvency proceedings in Canada stems from common law and essentially requires a substantial connection between the foreign judgment and the proceedings here, according to Grieve. Civil law jurisdictions wouldn't be accommodating. Grieve also notes that up- wards of 60 per cent of cross- border insolvencies or bank- ruptcies in Canada involve companies with interests in the United States. Judges there have praised Canada's mandate to appoint a monitor to oversee the sale of assets and other de- velopments in each case. Grieve spoke with several U.S. judges while attending the eighth annual Review of Insol- vency Law Conference in To- ronto in February at which she made a presentation on cross- border co-operation. Th e judges commended Canada's court-ap- pointed monitor system as they learn a lot from the reports. Th e United States doesn't require a court-appointed monitor in any bankruptcies or insolvencies. "Th e monitors here issue reports to the courts, and the judges fi nd that they learn a lot by looking at the Canadian In addition to her presenta- tion at the conference, she pro- vided attendees with a 28-page document on the new Canadian cross-border insolvency regime. In it, she writes that a nation's sovereignty over its own legal process "is a cornerstone of pri- vate international law. As there is no binding worldwide inter- national treaty dealing with in- solvency, each jurisdiction must enact its own insolvency rules." She continues: "However, The adoption of the UNCITRAL framework helps to provide consistency, says Linc Rogers. monitors' reports, which gives them context," Grieve says. "I may be somewhat biased but I think the Canadian system has worked more quickly and more fl exibly and with less litigation than in the U.S." with potentially diff erent rules in each jurisdiction in which a multinational enterprise may operate, confl icts regarding pro- cedure and substantive law will inevitably ensue. Although the development of cross-border protocols and co-operation of courts in diff erent jurisdictions has been invaluable to harmo- nize proceedings, the interna- tional legal community also sought more predictable and uniform procedures." 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This new edition provides up-to-date guidance on key topics such as: the end of mandatory retirement • • • • • • • • • • • • inducing breach of contract enforceability of restrictive covenants dependent contractors privacy issues in the workplace employment standards duty to accommodate the new human rights regime in Ontario occupational health and safety offences legislation addressing workplace violence and harassment constructive dismissal, just cause, reasonable notice calculating dismissal damages post Keays v. Honda Canada Inc. Visit canadalawbook.ca or call 1.800.565.6967 for a 30-day no-risk evaluation Hardbound • Approx. 450 pp. • March 2011 • $115 • P/C 0977010003 • ISBN 978-0-88804-517-1 Prices subject to change without notice, to applicable taxes and shipping & handling. ences several insolvency cases in which Canadian courts have recognized foreign proceedings. Under the new UNCITRAL mandate, should a court in one jurisdiction come to a decision that diff ers from a ruling else- where, the two courts will com- municate and come to an agree- ment, she says. According to Grieve, that's what happened in the Leh- man Brothers Holdings Inc. bankruptcy in which a court in Britain provided a decision that diff ered from the U.S. proceed- ings. As a result, the two judges communicated and found com- mon ground. "It is a co-operative way of making sure everything can get done in a uniform manner," says Grieve. Prior to the new UNCITRAL mandate, Canadian courts would deal with foreign insolvency or- ders under s. 18.6 of the Compa- nies' Creditors Arrangement Act. Linc Rogers, a partner in the restructuring and insolvency group at Blake Cassels & Gray- don LLP, says the adoption of the UNCITRAL approach is generally quite helpful. "It's much better to have a full statu- tory infrastructure in place to al- low the courts to do the job they need to do," Rogers says. "So I think the implementation of the UNCITRAL completes this and gets us to where we need to be." He notes the global frame- CANADA LAW BOOK® LT0228 www.lawtimesnews.com work provides a set of guide- lines for courts on the concept of a company's centre of main interests for international insol- vency matters. "Th e good thing about Canada opting in is that it does provide consistency in terms of the infrastructure, ter- minology, and approach with other key fi nancial global cen- tres. When you get to the heart of it, you're giving up a little bit of sovereignty in order to achieve certainty, effi ciency, and co-ordination." The Honour Mr . Jus S co t Superior C t E tice R abl of Jus e chlin,ourt tice ( andall On t ario ) Chris tine M. Thomlinson

• Cover
• Victorious Worker
• Mysterious Payment
• Focus On Restructuring & Insolvency