The Harmonizing Directive of Section 1508: Foreign Case Law’s Role in Interpreting Chapter 15 of the U.S. Bankruptcy Code
Northwestern Journal of International Law & Business
The H armonizing Directive of Section 1508: Foreign Case Law 's Role in Interpreting Chapter 15 of the U.S. Bankruptcy Code
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1 Ginger Clements,Th e Harmonizing Directive of Section 1508: Foreign Case Law's Role in Interpreting Chapter 15 of the U.S. Bankruptcy Code , 36 Nw. J. Int'l L. & Bus. 435, 2016
Copyright 2016 by Northwestern University School of Law
Northwestern Journal of International Law & Business
Printed in U.S.A.
Vol. 36, No. 2
The Harmonizing Directive of Section 1508:
Foreign Case Law’s Role in Interpreting Chapter
15 of the U.S. Bankruptcy Code
* J.D., Northwestern University, 2016; M.B.A., Louisiana State University, 2010; B.S., Louisiana Tech
University, 2008. I would like to thank Professor Bruce Markell for his invaluable guidance and
feedback. This Note is lovingly dedicated to the memory of Renn Brasher, whose beautiful spirit is my
greatest inspiration. Errors in this paper are my own.
Economic globalization and technological innovation have fueled the
substantial growth of business across national borders.1 This exchange of
goods, services, and capital has provoked an increasingly complex
integration of financial, legal, and political spheres.2 With this integration
has come not only great wealth but also profound implications in the
context of business failure.3 As the frequency of business insolvencies with
international aspects4 has inevitably and dramatically increased,5 the
insolvency laws of multiple countries have been forced to interact more and
more.6 This has not been without issue; for although investment can cross
borders fluidly, bankruptcy remains largely territorial.7 National insolvency
laws are often ill-equipped to handle cross-border insolvency cases.8 This
shortcoming results in insufficient and inharmonious legal approaches
which inhibit fair and efficient administration of cross-border insolvency
cases.9 This inefficiency impedes the rescue of financially distressed
businesses, hampers the security of the assets of the debtor, and stymies the
maximization of the debtor’s asset value.10
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To address the inadequacies of national insolvency laws, the United
Nations Commission on International Trade (UNCITRAL) promulgated the
Model Law on Cross-Border Insolvency (Insolvency Model Law) in 1997.11
The Insolvency Model Law consists of procedural rules for enacting
countries to follow in cross-border insolvency cases.12 The United States
incorporated the Insolvency Model Law into federal statute via Chapter 15
of the U.S. Bankruptcy Code (Code) and adopted its main provisions,
including a directive to consider the Insolvency Model Law’s “international
origin” and the need to promote uniformity in its application.13 The
legislative history of Chapter 15’s adoption reveals that non-U.S. sources,
including non-U.S. court decisions interpreting the Insolvency Model Law,
facilitate its uniform application.14
However, the provision does not specify the degree of consideration or
weight to be placed on the court decisions of implementing states15 when
interpreting the Insolvency Model Law.16 Courts have recognized the
Code’s directive to interpret the Insolvency Model Law in light of its
international origin and the need to promote its uniform application,17 but
ultimately, courts have failed to articulate a method of interpretation that
fully satisfies this directive, particularly with respect to the consideration of
foreign case law.18
As the Insolvency Model Law matures and is adopted by more
countries, the occurrence of cases requiring Insolvency Model Law
interpretation will only increase,19 and the recent Australian case, De Akers
ex rel. Saad Investments Co. Ltd. v. Deputy Commissioner of Taxation
(Saad Investments), provides a noteworthy example.20 In Akers, the
Australian appellate court interpreted particular provisions of the
Insolvency Model Law to determine the local remedies available to a local
Australian creditor whose rights to collect in the debtor’s main proceeding
were effectively extinguished.21 The case presents an Insolvency Model
Law interpretation issue which is not difficult to imagine arising in a case
under Chapter 15 in the United States where, for whatever reason, a U.S.
creditor has no claim against a foreign debtor with assets in the United
States under the insolvency proceedings of another country.22 Yet guidance
on the proper weight a U.S. court should afford a case such as Akers is
unclear; therefore, this Note proposes the level of consideration U.S. courts
should give the case law of fellow implementing countries when
interpreting the Insolvency Model Law.
This Note contends that Section 1508 directs U.S. courts to consider
the case law of implementing states when facing a question of interpretation
under Chapter 15 of the Code if that foreign case law interprets provisions
of the Insolvency Model Law similar to those provisions contained in
Chapter 15. Furthermore, if U.S. courts deviate from that case law, they
should explain the departure. Part II discusses the general uniform approach
of the Insolvency Model Law and details its adoption in the United States.
Part III explains contexts in which case law is more than merely
persuasive—it has a heightened persuasiveness—and describes the
approaching a similar provision of interpretation in the U.N. Convention on Contracts for the
International Sale of Goods).
19 Thirty-two jurisdictions have enacted the Insolvency Model Law since the United States,
including Canada and Great Britain in the same year as the United States. See supra note 15 for the
complete list along with the year of enactment.
20 De Akers ex rel. Saad Inv. Co. Ltd. v Deputy Comm’r of Taxation  FCAFC 57 (Austl.).
21 Id.; Cross-Border Insolvency, HWL EBSWORTH LAWYERS (July 22, 2014),
http://www.hwlebsworth.com.au/latest-news-a-publications/publications/insolvency-and-securitiesenforcement/item/1393-cross-border-insolvency.html. The case will be discussed in more detail in Part
22 De Akers  FCAFC 57, ¶ 115 (framing the facts in the case as but one iteration of the
underlying issue. “The present particular circumstance involves a claimed revenue debt. Other examples
of debts unenforceable in the centre of main interests, but enforceable in the forum of recognition, are
not difficult to hypothesise. The debt may be an unenforceable penalty in the centre of main interests,
but not locally. The jurisdiction of the centre of main interests may have a law discriminating against or
refusing to recognise the commercial interests or rights of citizens or companies of a particular state,
whether because of a state of affairs such as belligerency, or because of some other reason. The local
(recognising) state may have no such attitude. Thus, whilst we are dealing here with revenue debt, the
problem need not necessarily be so framed.”) (emphasis added).
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treatment of such case law by other courts in those contexts.23 Part III
asserts that the uniform approach of the Insolvency Model Law and its aim
to harmonize among implementing states renders case law which interprets
it heightened persuasive authority. Thus, the case law of implementing
states should be treated as heightened persuasive authority by U.S. courts;
therefore, when interpreting Chapter 15 of the Code, U.S. courts must
consider the case law of implementing states when that case law interprets
provisions of the Insolvency Model Law similar to those provisions
contained in Chapter 15. Also, if U.S. courts do not follow the case law,
they should explain their departure. Part IV establishes that the heightened
persuasive treatment of case law of implementing states must operate
within limits. Part V returns to the Akers case and analyzes the court’s
decision under the framework established in previous sections of the Note.
Part VI explores the practical issues inherent in the consideration of foreign
case law. Part VII concludes by reinforcing the necessity of proper
consideration for foreign case law in interpreting Chapter 15 of the Code.
II. THE UNICTRAL MODEL LAW ON CROSS-BORDER INSOLVENCY AND CHAPTER 15 OF THE U.S. BANKRUPTCY CODE
A. The UNCITRAL Model Law on Cross-Border Insolvency
Originally adopted by UNCITRAL in 1997, the Insolvency Model
Law is a tool for countries to better handle cross-border insolvency
proceedings.24 By reflecting best practices in cross-border insolvency, the
Insolvency Model Law assists implementing states in modernizing,
harmonizing, and increasing the fairness of their insolvency laws.25 The
Insolvency Model Law addresses situations where the debtor has assets in
more than one country or where creditors of the debtor exist in a country
other than the seat of the main insolvency proceeding.26 The Insolvency
Model Law aims to (i) encourage cooperation between countries, (ii)
provide legal certainty for trade and investment, (iii) protect and maximize
the value of debtors’ assets, (iv) fairly administer the interests of creditors
23 The phrase “heightened persuasive authority” is used to connote a higher level of persuasive
authority and is described in more detail in Part III.
24 MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 19. The Insolvency Model Law
acknowledges that liquidation and reorganization in some jurisdictions might not be conducted under
law that is labelled as insolvency law (e.g., company law) but that addresses insolvency or severe
financial distress nonetheless. U.N. COMM’N ON INT’L TRADE LAW [UNCITRAL], UNCITRAL MODEL
LAW ON CROSS-BORDER INSOLVENCY: THE JUDICIAL PERSPECTIVE, ¶ 79, U.N. Sales No. V.14-00242
(2013) [hereinafter JUDICIAL PERSPECTIVE].
25 MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 19.
and other interested parties including the debtor, and (v) facilitate the rescue
of financially troubled businesses to protect investment and preserve
The Insolvency Model Law does not purport to be substantive
insolvency law; rather, it acts as a procedural framework for increasing
cooperation among jurisdictions.28 The Insolvency Model Law, thus,
provides rules concerning (
) the recognition and enforcement of foreign
insolvency proceedings, (2) foreign representatives’ access to courts of
implementing states, (3) the rights of foreign creditors, (4) coordination of
multiple insolvency proceedings, (5) cooperation among courts, (6)
cooperation among representatives, and (7) cooperation between courts and
To date, legislation based on the Insolvency Model Law has been
adopted in thirty-two jurisdictions.30 In incorporating the text of the
Insolvency Model Law into its body of law, an implementing state may
modify or omit some of the provisions of the Insolvency Model Law.31
However, adopting the Insolvency Model Law into a country’s existing
legal system with “as few changes as possible” is recommended.32
B. Chapter 15 of the U.S. Bankruptcy Code
The United States adopted the Insolvency Model Law into Chapter 15
of the Code under Title VIII of the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005.33 Chapter 15 replaced former Section
304, which was enacted in 1978 and provided specific procedures for
obtaining relief in U.S. courts by foreign representatives to facilitate a
foreign insolvency proceeding.34 Chapter 15 incorporates most of the
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Insolvency Model Law with only minor changes to reflect U.S. references
and vernacular35 and thus aligns with the procedural law of most enacting
countries.36 Chapter 15’s objectives are quite similar to those of the
Insolvency Model Law but with greater specificity as to desired cooperation
among U.S. and foreign representatives and authorities.37 Chapter 15
primarily applies in four situations.38 The first two situations involve
assistance in connection with an insolvency proceeding. Either assistance is
sought in the United States by a foreign court or a foreign representative in
connection with a foreign insolvency proceeding, or assistance is sought in
another country in connection with a case under the U.S. Bankruptcy
Code.39 The third scenario arises when a foreign insolvency proceeding and
a U.S. bankruptcy proceeding involving the same debtor are concurrently
pending.40 Finally, the fourth situation concerns foreign creditors or other
parties in another country that have an interest in requesting the
commencement of a U.S. bankruptcy case or in participating in such a
case.41 Thus, Chapter 15 is the sole avenue of access to an ancillary
insolvency proceeding in the United States for a U.S. multinational
corporation with an insolvency commenced elsewhere.42 It is also the only
42 John J. Chung, The New Chapter 15 of the Bankruptcy Code: A Step Toward the Erosion of
National Sovereignty, 27 NW. J. INT’L L. & BUS. 89, 89 (
); see also Ramney-Marinelli, supra note
34, at 271 (explaining Congress’s intent to make Chapter 15 “the exclusive door to ancillary assistance
to foreign proceedings.”) (quoting H.R. REP. NO. 109-31, pt. 1, at 110 (
)). “Generally, a chapter 15
case is ancillary to a primary proceeding brought in another country, typically the debtor’s home
country. As an alternative, the debtor or a creditor may commence a full chapter 7 or chapter 11 case in
means of access to an ancillary insolvency proceeding in the United States
for a foreign corporation with assets or operations in the United States.43
III. HEIGHTENED PERSUASIVE AUTHORITY AND CASE LAW
UNDER SECTION 1508
As the use of Chapter 15 continues to increase, U.S. courts will be
called upon to interpret its provisions more and more. Thus, the treatment
of case law of implementing states must be addressed. This Part proposes
the proper treatment of such case law by arguing that the case law is
heightened persuasive authority. First, this Part explains heightened
persuasive authority, explores contexts in which case law assumes
heightened persuasiveness, and describes the treatment of case law in those
contexts. Then the Part argues that the uniform approach of the Insolvency
Model Law and its goal to harmonize among its implementing states is also
a context for heightened persuasive authority. Finally, the Part concludes by
setting forth the treatment case law of implementing states should receive
by U.S. courts.
A. Understanding Heightened Persuasive Authority
In reaching their decisions, courts may consider the content as well as
the source of ideas, arguments, and conclusions.44 Persuasive authority45 is
a classification which includes those resources that a court may choose to
follow if it finds the reasoning or conclusion convincing.46 Treatises, law
review articles, and decisions of courts in other jurisdictions are types of
persuasive authority.47 Persuasive authority is contrasted with mandatory or
binding authority. Courts must follow binding authority.48 Persuasive
authority by its very nature is not binding; a court is not required to follow
the United States if the assets in the United States are sufficiently complex to merit a full-blown
domestic bankruptcy case.” Ancillary and Other Cross-Border Cases, U.S. COURTS,
http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter15.aspx (citing 11 U.S.C.
§ 1520(c)) (last visited Feb. 15, 2015).
43 See Chung, supra note 42, at 89; see also Ramney-Marinelli, supra note 34, at 271.
44 See Frederick Schauer, Authority and Authorities, 94 VA. L. REV. 1931, 1934, 1940 (2008).
45 From this point forward in this Note, the term persuasive authority and persuasive source will
be used interchangeably. Furthermore, if the Note refers to courts as persuasive authority, the decisions
of those courts are implicated as persuasive authority too since they embody the reasoning and status of
the authoring court. The significance of reasoning and status will be explored further in this Part.
46 Schauer, supra note 44, at 1940.
47 Chad Flanders, Toward a Theory of Persuasive Authority, 62 OKLA. L. REV. 55, 63–64 (2009).
48 Schauer, supra note 44, at 1940 (“Mandatory authorities, according to the standard account
drummed into the minds of lawyers from their first year of law school on, are ones that bind a court to
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However, there are certain contexts in which a court, though not
bound to follow a persuasive authority, may nonetheless have a
strong, overarching reason to do so.50 Namely, courts in these
contexts are trying to make their decisions consistent with the
conclusion of the persuasive authority.51 Indeed, a great concern for
uniformity in the law pervades many of the most visible contexts52 in
which this desire for consistency exists.53 In these situations, the
persuasive authority assumes a heightened persuasiveness, a
persuasiveness greater than that of other persuasive sources.54
1. Heightened Persuasive Authority—For Case Law Only
A source’s heightened persuasiveness relates to its status, particularly
with respect to concerns for uniformity in the law.55 That is to say, only
those persuasive authorities whose conclusions affect uniformity in the law
49 Brian D. Lepard, Is the United States Obligated to Drive on the Right? A Multidisciplinary
Inquiry into the Normative Authority of Contemporary International Law Using the Arm’s Length
Standard as a Case Study, 10 DUKE J. COMP & INT’L L. 43, 91 (1999); see Schauer, supra note 44, at
1940. (“[M]andatory (or binding) authorities are commonly distinguished from persuasive authorities.
Mandatory authorities . . . are ones that bind a court to follow them. . . . [T]his binding obligation . . . is
in contrast . . . with a court’s discretion to choose whether to follow a persuasive authority . . . .”).
50 Mayo Moran, Influential Authority and the Estoppel-Like Effect of International Law 5 (U.
Toronto, Legal Studies Research Paper No. 03-05, 2005),
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=785545 (“Judges often feel constrained to pay heed
to what are best described as mandatory values. These values exert a kind of demand . . . [such that] they
do not simply persuade, they compel.”); see, e.g., Ruth A. Moyer, Disagreement About Disagreement:
The Effect of a Circuit Split or “Other Circuit” Authority on the Availability of Federal Habeas Relief
for State Convicts, 82 U. CIN. L. REV. 832, 838 (2014) (“Citing the value of ‘uniformity,’ federal courts
are often reluctant to create a circuit split.”).
51 Flanders, supra note 47, at 75.
52 Two of the most visible of these contexts will be explored later in this Part. To preview them
here, they are (i) when U.S. circuit courts cite other circuit courts, not merely for the informational or
persuasive value, but because they seek to avoid a circuit split, and (ii) when U.S. state courts aim to
harmonize their interpretation of state “uniform acts” with other states based on the fact that those states
have adopted the same uniform act.
53 Flanders, supra note 47, at 75.
54 Authorities with this heightened persuasiveness have been referred to as “super-persuasive”
authorities. Flanders, supra note 47, at 74 (“[T]hese . . . ‘super-persuasive’ authorities . . . have an
additional weight, beyond their persuasiveness . . . .”); see Lepard, supra note 49, at 91 (explaining that
certain persuasive authority imposes an obligation to afford it “great weight in decision making”)
(internal quotes omitted); Alice Osman, Demanding Attention: The Roles of Unincorporated
International Instruments in Judicial Reasoning, 12 N.Z. J. PUB. & INT’L L. 345, 350 (2014) (explaining
that “some sources of persuasive authority . . . are only persuasive,” but “[o]ther sources, however, seem
to demand attention” and referring to these other sources as “influential authority”); see Flanders, supra
note 47, at 75–76.
55 Flanders, supra note 47, at 75.
can carry heightened persuasiveness.56 Thus, heightened persuasive
authority is limited to court decisions because courts have decision-making
power (unlike other forms of persuasive authority such as treatises, law
review articles, and Internet sources).57 While sources like law review
articles may influence uniformity in the law, they do not have the power to
make legal decisions that affect it; courts do.58
Decision-making power is necessary for heightened persuasiveness,
but it is not sufficient.59 Not all courts are heightened persuasive authorities
despite their ability to make decisions.60 Rather, heightened persuasive
authorities share the distinction of making decisions that have some
harmonizing value.61 In other words, what brings a court decision with
heightened persuasiveness into the “territory outside of conventional
persuasive authorities” is another court’s citation to that decision in order to
make its own decision consistent with it.62 “The desire to create an actual
uniformity in the law transforms some authorities” into heightened
persuasive ones.63 The extra weight of heightened persuasive authorities,
thus, derives from their virtue of being a court that decides law in a context
where uniformity or consistency is valued.64 They are heightened
persuasive authorities by virtue of what they are (courts that decide issues
under similar law65) and not just by virtue of what they say.66 Therefore,
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when looking at the decisions of these courts, other courts consider not only
the reasoning of their conclusion (as they would with any persuasive
source), but also the courts’ status as a decision-making body with which to
Heightened persuasive authority, then, refers to a grade of persuasive
authority.68 In a hierarchy of persuasive authority, it ranks at the top, being
the most persuasive.69 “The norms of judge craft require that persuasive
authorities be dealt with appropriately.”70 This means that heightened
persuasive authorities must be confronted by courts in making their
decisions precisely because of the heightened persuasive authority’s
status.71 Essentially, the power of heightened persuasive authorities closely
resembles the role of past decisions of the same court or higher courts, both
binding sources of law.72 As heightened persuasive authority is more akin to
binding than persuasive authority, courts cannot simply ignore it.73 The
heightened persuasive authority must be acknowledged.74 Additionally, if a
court determines that the heightened persuasive authority should not be
followed, there should at least be a clear explanation why.75 The heightened
persuasive authority should receive an acknowledgement and rebuttal,
showing why the court decided not to follow the decision, particularly
given its heightened persuasiveness.76 Despite this, authority with
67 Flanders, supra note 47, at 74.
68 Sullivan, supra note 62, at 1201 (“The notion of authority being ‘persuasive’ beyond its
inherent power to persuade . . . explains what is otherwise mysterious—the phenomenon that might be
called ‘graded persuasiveness.’”); see Flanders, supra note 47, at 63.
69 See Flanders, supra note 47, at 63. In his ordering, Flanders ranks other courts outside the
deciding court’s own jurisdiction at the top of the ordering. Id. Yet, Flanders goes on to point out that
even within this top ordering some authority can be more persuasive than others. Id. at 74–75.
70 Sullivan, supra note 62, at 1206.
71 Id. at 1205 (arguing that “at least those [sources] that grade high enough on the scale of
persuasion, must be confronted precisely because the authority is an authority,” in other words, a court
that makes decisions).
72 Flanders, supra note 47, at 74.
73 Sullivan, supra note 62, at 1206 (“In short, persuasive precedents can be rejected, but they
cannot be ignored.”).
74 See Hart v. Massanari, 266 F.3d 1155, 1170 (9th Cir. 2001) (stating “we would consider it bad
form to ignore . . . authority by failing even to acknowledge its existence”).
75 Id. (“[I]t is well understood that—in the absence of binding precedent—courts may forge a
different path than suggested by prior authorities that have considered the issue. So long as the earlier
authority is acknowledged and considered, courts are deemed to have complied with their .
responsibilities.”) (emphasis added); Cf. Flanders, supra note 47, at 61 (describing that binding authority
cannot simply be noted and then departed from. It must receive an acknowledgement and a rebuttal,
showing why the decision no longer has any force.).
76 See Flanders, supra note 47, at 78 (“[T]here is a pull towards conformity with other courts, and
courts who drift from that pull are usually thought to have to explain why, or at least to acknowledge the
disagreement.”). “The decisions of other courts [even if not very persuasive in their reasoning] may
deserve recognition and even consideration if the cases are very closely related or on point, and there are
strong reasons for uniformity or consistency in that area of law.” See id. at 84; see also Sullivan, supra
heightened persuasiveness, like traditionally persuasive authority,
ultimately is not binding.77 Courts are not in legal error if they do not
choose to follow authorities with heightened persuasiveness.78
2. Two Tales of Heightened Persuasive Authority
As mentioned earlier, a significant concern for uniformity in the law
infuses many of the most apparent contexts in which heightened
persuasiveness dwells.79 Two primary contexts for heightened
persuasiveness are as follows:
) When U.S. circuit courts cite other circuit courts, not merely
for informational or persuasive value, but because they seek to
avoid a circuit split, and80
(2) When U.S. state courts aim to harmonize their interpretation
of state uniform acts with other states based on the fact that those
states have adopted the same uniform act.81
A clear example of heightened persuasiveness is found within the U.S.
Courts of Appeals.82 Circuit courts consider the decisions of other circuit
courts on a similar issue before making a decision.83 The courts are under
no obligation to adhere to the decisions of “sister courts,”84 yet the courts
maintain that those decisions deserve “great weight and precedential
value.”85 Further, judges express a reluctance to create a circuit split,86
note 62, at 1205–06 (“A court facing such a high-value persuasive precedent will often go to great
lengths to distinguish it . . . [a]nd, when such prior authority cannot be distinguished (at least in a way
that is intellectually satisfying to the court), it will usually feel compelled to explain why it has reached a
different result.”). Compare the notion that heighted persuasive authority, which is not followed, should
“receive an acknowledgement and rebuttal, showing why the court decides not to follow the decision”
with the point that binding authority, which is not followed, “must receive an acknowledgement and
rebuttal, showing why the decision no longer has any force. To fail to do so would . . . be a legal error.”
Flanders, supra note 47, at 61 (emphasis added). This Note’s assertion that heightened persuasive
authority, which is not followed, should receive an acknowledgement and rebuttal does not hinge on any
legal error in the absence of such acknowledgement. Rather, it centers on the idea that authority with
heightened persuasiveness gains its status from certain values, including harmonization. See Flanders,
supra note 47, at 75.
77 Flanders, supra note 47, at 74.
79 Id. at 75.
80 Amelia H. Boss, The Uniform Electronic Transactions Act in a Global Environment, 37 IDAHO
L. REV. 275, 280 (2001); Flanders, supra note 47, at 75–76; Moyer, supra note 50, at 838.
81 Boss, supra note 80, at 280; Flanders, supra note 47, at 75–76.
82 Flanders, supra note 47, at 76.
84 Amanda Frost, Overvaluing Uniformity, 94 VA. L. REV. 1567, 1578 (2008).
85 Aldens, Inc. v. Miller, 610 F.2d 538, 541 (8th Cir. 1979).
86 See, e.g., Alfaro v. Comm’r, 349 F.3d 225, 229 (5th Cir. 2003) (“We are always chary to create
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citing the importance of uniformity.87 Thus, the decisions of other appellate
courts are considered not only because of their content but also because of
the court’s status as a court which makes decisions with harmonizing
Heightened persuasiveness can also be observed in the interpretation
of uniform statutory texts across states in the United States.89 Through the
enactment of uniform legislation—chiefly the Uniform Commercial Code
(UCC)—state legislators have adopted statutes that encourage state courts
to duly consider the interpretations of similar statutes in other states.90 State
courts are not bound by other states’ court decisions which interpret such
uniform acts like the UCC; however, the interpretations provided by other
state court decisions are “extremely persuasive.”91 Judges express a
“healthy respect” for the decisions of other states’ courts construing the
UCC.92 An appreciation for the importance of uniformity in a national
system of sales laws informs the judges’ approach.93 Other states’ court
decisions are considered not merely due to the value of their reasoning, but
also because of the courts’ status as courts which decide cases under a
similar statute, that state’s adoption of the UCC.94
a circuit split.”). “[S]ome [circuit courts] go so far as to create a presumption against creating a conflict,
claiming that they must avoid generating circuit splits unless they have a ‘compelling’ reason to do so.”
Moyer, supra note 50, at 838 (citing Frost, supra note 84, at 1578). See, e.g., Frost, supra note 84, at
1579 n.30 (quoting Alternative Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23, 31 (1st Cir. 2004)
(“A court of appeals should always be reluctant to create a circuit split without a compelling reason . . .
.”); Kelton Arms Condo. Owners Ass’n v. Homestead Ins. Co., 346 F.3d 1190, 1192 (9th Cir. 2003)
(“[W]e decline to create a circuit split unless there is a compelling reason to do so.”); Wagner v.
Pennwest Farm Credit, ACA, 109 F.3d 909, 912 (3d Cir. 1997) (same)).
87 Aldens, Inc., 610 F.2d at 541 (“As an appellate court, we strive to maintain uniformity in the
law among the circuits, wherever reasoned analysis will allow . . . . Unless our . . . courts of appeals are
thus willing to promote a cohesive network of national law, needless division and confusion will
encourage further splintering and the formation of otherwise unnecessary additional tiers in the
framework of our national court system.”); Moyer, supra note 50, at 838.
88 Flanders, supra note 47, at 76.
89 Boss, supra note 80, at 280 (“The concept of ‘uniform’ interpretation of statutory texts across
jurisdictional boundaries is not a new one in the United States.”).
B. The Insolvency Model Law and Chapter 15: Another Context for
Heightened Persuasive Authority
1. The Insolvency Model Law Is a “Vehicle for the Harmonization
Like case law of the U.S. Courts of Appeals or the UCC, uniformity,
or harmonization, is highly important when interpreting the Insolvency
Model Law. The Insolvency Model Law is a uniform act by design,
inherently urging harmonization and consistent application.96 The
Insolvency Model Law emphasizes “a uniform approach to its interpretation
based on its international origins.”97 The uniform approach to the
Insolvency Model Law’s interpretation is encoded in Article 8.98 Article 8,
titled “Interpretation,” reads: “In the interpretation of this Law, regard is to
be had to its international origin and to the need to promote uniformity in its
application and the observance of good faith.”99 The provision’s purpose is
to create an interest in its harmonized interpretation in implementing
Article 8 is modeled after Article 3 of the UNCITRAL Model Law on
Electronic Commerce (E-Commerce Model Law).101 The Guide to
Enactment for the E-Commerce Model Law reinforces the harmonizing
purpose behind Article 8. Indeed, the expected effect of Article 3—on
which Article 8 is based—is “to limit the extent to which a uniform text,
95 MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 24.
97 JUDICIAL PERSPECTIVE, supra note 24, at 7.
98 See MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 5.
100 See id. at 54; Comm’n on Int’l Trade Law, Rep. on Its 30th Session, May 12–30, 1997, ¶ 174,
U.N. Doc. A/52/17 (July 4, 1997) [hereinafter General Assembly 30th Session Report] (explaining the
adoption of Article 8 to the Model Law); Comm’n on Int’l Trade Law, Working Grp. V (Insolvency
Law), Rep. on Its 39th Session, Dec. 6–10, 2010, ¶ 39, U.N. Doc. A/CN.9/WG.V/WP.95 (Dec. 20,
2010) [hereinafter Insolvency Working Group 39th Session Report] (“The importance of Article 8 to
interpretation is noted in the decisions of a number of courts.”).
101 MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 54. (“Article 8 has been modelled
on article 3, paragraph 1, of the UNCITRAL Model Law on Electronic Commerce.”). Article 3 of the
Model Law on E-Commerce reads in relevant part: “In the interpretation of this Law, regard is to be had
to its international origin and to the need to promote uniformity in its application and the observance of
good faith.” U.N. COMM’N ON INT’L TRADE LAW [UNCITRAL], UNCITRAL MODEL LAW ON
ELECTRONIC COMMERCE WITH GUIDE TO ENACTMENT, at 4, U.N. Sales No. E.99.V.4 (
[hereinafter E-COMMERCE MODEL LAW AND GUIDE]. Article 8 of the Model Law on Cross-Border
Insolvency reads verbatim. See MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 5. Cf. U.N.
CONVENTION ON CONTRACTS FOR THE INT’L SALE OF GOODS, at 3, U.N. Sales No. E.10.V.14 (2010)
(“In the interpretation of this Convention, regard is to be had to its international character and to the
need to promote uniformity in its application and the observance of good faith in international trade.”)
[hereinafter CISG]; E-COMMERCE MODEL LAW AND GUIDE, supra note 101, at 29.
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once incorporated in local legislation, would be interpreted only by
reference to the concepts of local law.”102 The commentary to Article 3 goes
on to state that the article serves the purpose of:
[D]raw[ing] the attention of courts and other national authorities
to the fact that the provisions of the Model Law (or the provisions
of the instrument implementing the Model Law), while enacted as
part of domestic legislation . . . should be interpreted with
reference to its international origin in order to ensure uniformity
in the interpretation of the Model Law in various countries.103
Article 3 of the E-Commerce Model Law is in turn based on Article 7
of the U.N. Convention on Contracts for the International Sale of Goods
(CISG or Convention).104 The Explanatory Note to the CISG explains that
the Convention will “better fulfil[l] its purpose if it is interpreted in a
consistent manner in all legal systems.”105
As many legal writers have pointed out, this means, above all,
that one should not read the Convention through the lenses of
domestic law. . . . Thus, when interpreting the CISG one should
not resort to the meaning generally attached to certain expressions
within the ambit of a particular legal system106 . . . . [I]n order to
achieve the CISG’s ultimate goal of uniform application, it is
necessary to consider the practice of other jurisdictions, i.e., ‘what
others have already done.”107
Therefore, the intent of harmonized interpretation of the Insolvency Model
Law, derived from a rich history of such intention in international uniform
acts, is clearly embodied in Article 8.108
Facilitating this harmonized interpretation, the Insolvency Model
Law’s Guide to Enactment provides information on sources to be consulted
in the Law’s interpretation.109 As a primary source, case law on the
Insolvency Model Law is important for uniform interpretation under Article
8.110 The Guide states that “harmonized interpretation” of the Insolvency
Model Law is facilitated by the Case Law on UNCITRAL Texts (CLOUT)
information system.111 The CLOUT system compiles abstracts of judicial
decisions that interpret model laws created by UNCITRAL.112 The system’s
purpose is to facilitate the uniform interpretation and application of model
laws developed by UNCITRAL.113
In addition to CLOUT, a digest of case law was developed to contend
with the growing body of decisions interpreting and applying the various
provisions of the Insolvency Model Law.114 The digest is maintained by
UNCITRAL in an easily accessible form and provides greater access to
these court decisions.115 Its goal is to facilitate uniformity and predictability
with respect to the Insolvency Model Law’s interpretation.116 The digest of
case law also serves as a supplement to the UNCITRAL Model Law on
Cross-Border Insolvency: The Judicial Perspective (Judicial Perspective).117
Furthermore, jurisprudence on the Insolvency Model Law also includes
references to the European Community’s Insolvency Regulation.118
The intent of the Insolvency Model Law to be a uniform act and the
importance of the role of jurisprudence in facilitating that intent is clear
from the legislative history of the Model Law and Article 8 specifically.119
Therefore, a strong pull toward uniformity is inherent in the Insolvency
110 Insolvency Working Group 39th Session Report, supra note 100, ¶ 24.
111 Model Law and Guide to Enactment, supra note 5, at 54; U.N. Comm’n on Int’l Trade Law
[UNCITRAL], Working Group V (Insolvency Law), Secretariat Interpretation and Application of
Selected Concepts of the UNCITRAL Model Law on Cross-Border Insolvency Relating to Centre of
Main Interests (COMI), ¶ 92, U.N. Doc. A/CN.9/WG.V/WP.103 (Feb. 28, 2012). More information on
CLOUT and the other sources of case law interpreting the Insolvency Model Law will be discussed Part
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Model Law.120 This desire to effect uniformity in the law forms a context
for courts of implementing states, and their decisions,121 to be heightened
persuasive authorities.122 And the desire for uniformity is present in
Congress’ adoption of the Insolvency Model Law through Chapter 15 of the
2. Congress Elected Harmonization of Chapter 15 with the
Insolvency Model Law Statutes of Other Implementing States
Congress adopted the Insolvency Model Law through Chapter 15 of
the Code,123 and in doing so, Congress chose that the United States should
be an implementing state.124 As such, the United States is a participant in
the harmonization goals of the Insolvency Model Law.125 Indeed, Congress
adopted Section 1508, a directive to consider the need for uniformity
between the application of Chapter 15 and the application of the Insolvency
Model Law as implemented in other countries. Section 1508 reads: “In
interpreting this chapter [11 USCS §§ 1501 et seq.], the court shall consider
its international origin, and the need to promote an application of this
chapter that is consistent with the application of similar statutes adopted by
foreign jurisdictions.”126 Section 1508 of the Code is the U.S.-equivalent of
Article 8 of the Insolvency Model Law127 and commands U.S. courts to
refer to non-U.S. sources when interpreting Chapter 15.128 The legislative
history of Section 1508 points to a number of sources that can shed light on
the intent behind the directive of the provision and provide a stepping stone
in determining the authority to be placed on the decisions of fellow enacting
courts that interpret the Insolvency Model Law. These non-U.S. sources
include decisions rendered by implementing states that construe the
Insolvency Model Law, the Guide to Enactment and Interpretation of the
120 Additional evidence of the Model Law’s emphasis on a uniform approach is found in the
Guide to Enactment which instructs implementing states on ways to avoid “compromise[ing] the goal of
achieving uniformity and facilitating cross-border insolvency matters.” MODEL LAW AND GUIDE TO
ENACTMENT, supra note 5, at 48.
121 See supra note 45.
122 Flanders, supra note 47, at 79.
123 H.R. REP. NO. 109-31, pt. 1, at 105 (
); see Part II, supra p. 10.
124 See H.R. REP. NO. 109-31, pt. 1, at 105–196, 106 n.101 (
125 This point will be explored more below.
126 11 U.S.C. § 1508 (2012 & Supp. 2014).
127 Ramney-Marinelli, supra note 34, at 273 (2008); Ragan, supra note 7, at 134 (“[Section 1508]
specifically commands U.S. courts interpreting chapter 15 to consult foreign sources.”).
128 Compare 11 U.S.C. § 1508 (“In interpreting this chapter [11 USCS §§ 1501 et seq.], the court
shall consider its international origin, and the need to promote an application of this chapter [11 USCS
§§ 1501 et seq.] that is consistent with the application of similar statutes adopted by foreign
jurisdictions.”), with MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 5 (“In the interpretation
of this Law, regard is to be had to its international origin and to the need to promote uniformity in its
application and the observance of good faith.”).
UNCITRAL Model Law on Cross-Border Insolvency (Guide to
Enactment), and the reports of UNCITRAL (to which the Guide to
As explored in Part III.B.1 above, the Guide to Enactment explains
that Article 8’s purpose is to create an interest in its harmonized
interpretation in enacting countries.130 Since the legislative history points to
the Guide to Enactment, then the Guide’s commentary on Article 8 can
illuminate the reasoning behind a country’s legislature that chooses to enact
that particular provision.131 This is just what Congress instructs: the Guide
to Enactment should be turned to for guidance on the meaning and purpose
of Chapter 15’s provisions.132
It follows that when Congress enacted the Insolvency Model Law it
understood Article 8’s purpose and selected to enact it in order to create an
interest in its harmonized interpretation in the United States.133 This point is
particularly powerful when considering the nature of the Insolvency Model
Law and its flexibility in adaption into the legal systems of enacting
countries.134 Congress had the choice to modify Article 8 of the Insolvency
Model Law, but opted not to and adopted Article 8’s directive through
Through Section 1508, Congress instructs U.S. courts to refer to the
court decisions of fellow Insolvency Model Law countries that interpret the
Insolvency Model Law in order to promote uniform interpretation.136 In
other words, U.S. courts should aim to harmonize rulings on the
interpretation of the Insolvency Model Law with relevant rulings of fellow
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Insolvency Model Law countries.137 It is this very goal—uniformity in
interpretation—that exalts the interpretative decisions of fellow Insolvency
Model Law countries to heightened persuasive authority.138 When
uniformity is sought and reference is made to other courts to determine
what uniformity should look like, those other courts are serving a capacity
that “goes beyond being merely ‘persuasive.’”139 They are being treated “as
authorities by virtue of what they are, not only by what they say, and hence
as [heightened] persuasive [authorities].”140 To put it another way, the “fact
of convergence” will drive a court confronted with a question for the first
time to reach the same decision and to come to a different conclusion only
if it has “strong contrary feelings.”141 Congress alludes to this driving
force—the pull of uniformity—in remarking that the decisions of U.S.
courts will “more likely be regarded as persuasive elsewhere” to the extent
that they rely on the case law of implementing states.142 To achieve this
consideration for harmonization, U.S. courts are aided by a number of
nonU.S. sources when interpreting Chapter 15.143 These sources include the
Guide to Enactment and the reports of UNCITRAL’s Working Group on
Insolvency Laws, which are referenced in the Guide to Enactment as well
as in decisions rendered by foreign courts construing the Insolvency Model
Law.144 Congress labeled these sources as not just persuasive, but also as
advancing the “crucial goal of uniformity of interpretation.”145
C. Proper Treatment of Foreign Case Law Under Section 1508
Since the case law of implementing states holds heightened persuasive
authority, then such case law should receive treatment commensurate with
this authority in the form of acknowledgement and rebuttal, if applicable,
by U.S. courts.146 The first step is the consideration of this case law by U.S.
courts. The second step is to explain why such case law is not followed if
the U.S. court deviates from it.
In fact, where a goal of uniformity in the law exists—as in the context
of heightened persuasive authority—case law from other jurisdictions
cannot be ignored.147 “[U]niformity can only be achieved if . . . foreign case
law [is considered].”148 Indeed, the concept of harmonization itself, when
based on a model law, necessarily dictates a review of the case law of other
countries.149 This point is reinforced when considering Section 1508’s
predecessor in Article 7 of the CISG.150 Numerous scholars agree that
Article 7 requires U.S. courts to consider foreign case law on the CISG.151
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Similarly, Section 1508 requires U.S. courts to consider the case law of
countries that have implemented the Insolvency Model Law.152 As with
other heightened persuasive authority, U.S. courts are not required to follow
heightened persuasive authorities, but if a U.S. court determines that the
case law of an implementing state should not be followed, then the court
must clearly explain when it deviated from the foreign case law.153
IV. LIMITATIONS ON THE USE OF FOREIGN CASE LAW IN
INTERPRETING CHAPTER 15
Although Section 1508 provides for the treatment of the case law of
implementing states as heightened persuasive authority and thus requires
consulting such case law, one can anticipate that such treatment of
implementing states’ case law will face opposition.154 However, limitations
on the use of implementing states’ case law address this potential
opposition as is discussed further in this Part. For the purposes of this Note,
the arguments will be limited in scope to those that remain in light of a
statutory mandate to consult foreign sources.155 The scope is limited as such
because many commentators agree that consideration of foreign sources is
appropriate if a statute directs it156 and because doing so keeps the
arguments’ focus out of the debate over the use of foreign law in the
Words: Uniform Application?, 8 J.L. & COM. 207, 211 (1988) (“In view of the mandate in Article 7(
for interpretation with regard to the Convention’s ‘international character’ and ‘the need to promote
uniformity in its application,’ courts in States that adopt the Sales Convention should have no doubt as
to their responsibility to consider interpretations in other countries.”).
152 See supra Part III.A.1 for a more detailed explanation of the heightened persuasive treatment
of case law.
153 Id.; see Ferrari, supra note 106, at 260 (“Foreign case law should be used as a source from
which to draw either arguments or counterarguments. Thus, it can be helpful in solving a specific
problem.”) (emphasis added).
154 Ragan, supra note 7, at 162.
155 See generally 11 U.S.C. § 1508 (2012 & Supp. 2014) (directing courts to consider non-U.S.
156 See, e.g., Antonin Scalia, Keynote Address at the Ninety-Eighth Annual Meeting of the
American Society of International Law: Foreign Legal Authority in the Federal Courts (Apr. 2, 2004), in
98 AM. SOC’Y INT’L L. PROC. 305, 305 (2004) (stating that one cannot say the use of foreign law in
determining the meaning of U.S. statutes is never appropriate and outlining three contexts in which it is
appropriate, including a statute designed to implement the obligations of the U.S. under a treaty and a
statute which directly or indirectly refers to foreign law).
157 See generally Roger P. Alford, “Outsourcing Authority?” Citation to Foreign Court Precedent
in Domestic Jurisprudence: Four Mistakes in the Debate on “Outsourcing Authority,” 69 ALB. L. REV.
); Zachary Larsen, Discounting Foreign Imports: Foreign Authority in Constitutional
Interpretation & the Curb of Popular Sovereignty, 45 WILLAMETTE L. REV. 767 (2009); Diarmiud F.
O’Scannlain, Speech: What Role Should Foreign Practice and Precedent Play in the Interpretation of
Domestic Law?, 80 NOTRE DAME L. REV. 1893 (
); Viad F. Perju, The Puzzling Parameters of the
Foreign Law Debate, 2007 UTAH L. REV. 167; Ganesh Sitaraman, The Use and Abuse of Foreign Law
Perhaps, some might argue, the immediate issue of a heightened
persuasive-authority approach to foreign case law is relinquishing the
primacy of American law.158 But “this drastically overstates the
situation.”159 Viewing foreign case law interpreting the Insolvency Model
Law as heightened persuasive authority under Section 1508 does not allow
other countries to establish laws for domestic application; rule-making
power is not abdicated.160 Rather, the approach “recognizes the [strong]
persuasive value that exists in [fellow enacting courts’] interpretations of
the same (or similar) statutory texts.”161
This last phrase—“same or similar”—holds particular importance in
the heightened persuasive-authority approach to foreign case law under
Section 1508. To argue that all foreign case law that interprets the
Insolvency Model Law should be afforded the weight of heightened
persuasive authority would be over-reaching.162 A more nuanced analysis is
required. Section 1508 directs courts to consider “the need to promote an
application of [Chapter 15] that is consistent with the application of similar
statutes adopted by foreign jurisdictions” in interpreting the Code.163 To that
end, courts must first determine whether the provisions of Chapter 15 under
interpretative question are similar to those in the corresponding statute of
the fellow Insolvency Model Law country whose case law is under
consideration.164 Only those cases in which both the U.S. and foreign
provisions are based on the Insolvency Model Law should be considered
“similar statutes adopted by foreign jurisdictions” for purposes of Section
The analysis does not end there, however. Even when both provisions
are adopted from the Model Law, they may contain differences in language.
If that is the case, the court must determine whether the differences are
merely grammatical or linguistic as opposed to substantive.165 Also, the
court should consider whether the change in language reflects a disciplined
rejection of the Insolvency Model Law for policy reasons.166 Only if the
in Constitutional Interpretation, 32 HARV. L. REV. 653 (2009); Pradyumna K. Tripathi, Foreign
Precedents and Constitutional Law, 57 COLUM. L. REV. 319 (1957).
158 See Chung, supra note 42, at 104 (arguing that “Section 1508 opens the door wide for the
introduction of foreign law and moves the courts away from the primacy of American law”).
159 Boss, supra note 80, at 279.
160 Ragan, supra note 7, at 163.
161 See id. at 163; see also Boss, supra note 80, at 279–80 (explaining the notion that the Uniform
Electronic Transactions Act “should be interpreted with due deference to its origin in the Model Law
and that weight should be given to interpretation of the Model Law and its progeny in other
162 See Boss, supra note 80, at 288.
163 11 U.S.C. § 1508 (2012 & Supp. 2014) (emphasis added).
164 See Boss, supra note 80, at 288.
166 Id.; see, e.g., H.R. REP. NO. 109-31, pt. 1, at 110 (
) (explaining both language changes
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changes are merely grammatical, and are not substantive nor reflective of a
policy-based rejection, are the provisions similar for the purposes of Section
1508.167 Only then is uniform interpretation crucial,168 and only then can the
case law interpreting the similar provisions be heightened persuasive
Morning Mist Holdings Ltd. v. Krys (In re Fairfield Sentry Ltd.)
provides a look at a court engaging in the task of determining whether
statutes are similar for the purposes of Section 1508.169 The issue in
Morning Mist Holdings was where the debtor had its “center of main
interests” within the meaning of Section 1517(b)(
) of the Code.170 The
answer to the question determined whether the debtor was eligible to
receive the protection of Chapter 15, in which event U.S. proceedings
against the debtor would be stayed.171 The Second Circuit noted that the
UNCITRAL Guide to Enactment for the Model Law on Cross-Border
Insolvency does not define the center of main interests.172 The absence of
this definition led the court to consider the European Union Convention on
Insolvency Proceedings, from which the Insolvency Model Law drew the
Ultimately, however, the court concluded that EU Regulation does not
operate as an analog to Chapter 15 due to procedural differences; therefore,
the court did not find the EU’s definition of center of main interests a
suitable source of authority, persuasive or otherwise.174 The court also
looked at relevant European case law from England and Wales but found
the case law of these jurisdictions lacking as well.175
As the Morning Mist Holdings case illustrates, employing a heightened
persuasive-authority approach to foreign case law under Section 1508 does
not relinquish the primacy of U.S. law. In Morning Mist Holdings, the court
declined to find foreign case law persuasive due to a lack of similarity
between Chapter 15 and its counterparts in the EU, England, and Wales.
Although a heightened persuasive-authority approach to foreign case law
under Section 1508 obliges courts who do not follow the case law of fellow
enacting countries with similar statutes to provide an acknowledgement of
the case law and to explain why they did not follow it, ultimately, U.S.
courts are free to do just that.176 Heightened persuasive authority is not
binding, and courts can choose not to follow it.
V. ANALYZING DE AKERS EX REL. SAAD INVESTMENS CO.
LTD. V. DEPUTY COMM’R
Akers presents an Insolvency Model Law interpretation issue which is
could easily arise in the United States.177 The case is presented here as a
type of case study, aimed at highlighting case law of a fellow enacting
jurisdiction which interprets provisions of the Insolvency Model Law.
In Akers, the Federal Court of Australia confronted on appeal the issue
of whether to allow a local creditor, the Tax Commissioner, to pursue a
claim for a debt unenforceable in the Cayman Islands, the debtor’s center of
main interests and the jurisdiction of the main insolvency proceeding.178
The claim was enforceable in Australia, the forum of recognition and the
jurisdiction applying the Insolvency Model Law.179 The crux of the issue
was that the Tax Commissioner’s claim would not be accepted under the
Cayman Islands wind-up law180 because to do so would be to enforce
foreign revenue laws in the Cayman Islands.181
Essentially, the question was whether the court, in its 2013 decision to
modify recognition orders, properly granted relief from the stay under
Article 22 of the CBI.182 That relief allowed the Tax Commission to recover
Regulation’s definition of center of main interests).
176 Compare this line of reasoning with the U.S. Circuit Courts of Appeal. Zimmerman v. Oregon
Dep’t of Justice, 170 F.3d 1169, 1184 (9th Cir. 1999) (“We realize that our decision creates an
intercircuit split of authority. We are hesitant to create such a split, and we do so only after the most
177 See De Akers ex rel. Saad Invs. Co. Ltd. v Deputy Comm’r of Taxation  FCAFC 57, ¶
115 (Austl.) (musing that “other examples of debt [under these circumstances] are not difficult to
hypothesise.” The particular circumstances are those in which a claim is enforceable under the forum of
recognition applying the Model Law yet unenforceable in the foreign main proceeding.).
178 De Akers  FCAFC ¶ 3.
180 See supra note 4 for an explanation of the relation of wind-up law to insolvency law.
181 De Akers  FCAFC ¶ 3.
182 Id. ¶ 79.
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its tax debt from the debtor’s Australian assets.183 The issue centered on the
relationship between Article 20 and Article 22 of the Cross-Border
Insolvency Act (CBI), Australia’s adoption of the Model Law,184 and
whether Article 22 could vary the automatic stay granted by Article 20
through recognition of the foreign proceeding by the Australian courts.185
The Court found that Article 22, specifically provision 22(3), applies only
to relief under Articles 19 or 21; yet, the Court found that a provision of
Article 20 itself, 20(2), permitted modification to relief under Article 20,
and the Court determined that the court below considered this provision in
its 2013 decision to modify the recognition orders.186 Thus, the Court held
that the Insolvency Model Law permitted modification and termination of
the mandatory effects of foreign recognition granted under it.187 This ruling
essentially favors a local creditor who considers that its position is
disadvantaged in the forum of the main proceeding.188 The Court went on to
state in dicta that “it is fundamental in any society that its government is
able to require its citizens and others who operate a business or reside
within that society, to pay taxation so as to maintain the State.”189
The way the Australian court ruled on this could have substantial
implications for U.S. courts confronting a similar scenario.190 Specifically,
if a local tax creditor in the United States cannot collect under a foreign
main proceeding, this case potentially opens a line of reasoning for U.S.
courts to provide relief for that creditor to levy against the debtor’s assets in
the United States.191 This follows because Australia has adopted the
Insolvency Model Law through its CBI Act, which makes it a fellow
183 Scott Atkins, First Appellate Decision on Model Law Reduces Certainty, HENRY DAVIS YORK
184 Cross-Border Insolvency Act 2008 (Cth) pt 1 (Austl.).
185 De Akers  FCAFC ¶ 79. Article 20 reads in relevant part: “Paragraph 1 (a) of the present
article does not affect the right to commence individual actions or proceedings to the extent necessary to
preserve a claim against the debtor.” Cross-Border Insolvency Act 2008 (Cth) sch 1 ch 3 art 20(3)
(Austl.). Article 22 reads in relevant part: (
) In granting or denying relief under article 19 or 21, or in
modifying or terminating relief under paragraph 3 of the present article, the court must be satisfied that
the interests of the creditors and other interested persons, including the debtor, are adequately protected.
(2) The court may subject relief granted under article 19 or 21 to conditions it considers appropriate. (3)
The court may, at the request of the foreign representative or a person affected by relief granted under
article 19 or 21, or at its own motion, modify or terminate such relief. Id. sch 1 ch 3 art 22.
186 De Akers  FCAFC ¶¶ 80, 86–87.
187 Atkins, supra note 183.
189 De Akers  FCAFC ¶ 77.
190 See Stefano Calabretta, Federal Court of Australia Upholds Landmark Cross Border
Insolvency Decision, PIPER ALDERMAN (Sept. 30, 2014), http://www.lexology.com/library/
detail.aspx?g=1d09fe75-873e-4194-aec4-d7c036d2ede2 (commenting that “[i]t will be interesting to
observe how Courts approach similar applications in the future . . . .”); Atkins, supra note 183.
191 See Atkins, supra note 183.
Insolvency Model Law country;192 therefore, the provisions of the
Insolvency Model Law, which the Australian court interpreted, implicate
provisions of Chapter 15 of the Code.193 Article 20 of the CBI coincides
with Section 1520 of the Code, and Article 22 of the CBI coincides with
Section 1522 of the Code.194 Therefore, the Akers case presents the situation
of a fellow enacting country interpreting sections of the Insolvency Model
Law. If, and when, such sections of the Insolvency Model Law via Chapter
15 of the Code come under questions of interpretation in the United States,
courts must be prepared to determine what weight to place on the Akers
decision in order to comply with Section 1508’s directive for consistent
If differences between Sections 1520 and 1522 of the Code and
Articles 20 and 22 of the CBI are not substantive or policy-based rejections,
then the provisions are similar for the purposes of Section 1508. In that
event, Akers is to be treated as heightened persuasive authority by U.S.
courts interpreting Sections 1520 and 1522 of the Code.
Article 20 under the CBI reads exactly as Article 20 of the Model
Law.195 Article 20 provides in relevant part:
Effects of recognition of a foreign main proceeding
1. Upon recognition of a foreign proceeding that is a foreign
a) Commencement or continuation of individuals actions or
individual proceedings concerning the debtor’s assets,
rights, obligations or liabilities is stayed;
b) Execution against the debtor’s assets is stayed;
c) The right to transfer, encumber or otherwise dispose of
any assets of the debtor is suspended.
192 See supra note 15.
The UNCITRAL Model Law provides for adopting states to modify or omit existing
provisions, or include new provisions. UNCITRAL recommends that an adopting state make
as few changes as possible to the text of the UNCITRAL Model Law when enacting it.
Australia has followed this approach, with the anticipated advantage that international
jurisprudence and experience in interpreting and dealing with the UNCITRAL Model Law
will assist Australian courts to interpret the provisions of the [Insolvency Model Law].
Ian Walker & Minter Ellison, Australia Adopts UNCITRAL Model Law on Cross-Border Insolvency,
MONDAQ (Oct. 6, 2008), http://www.mondaq.com/australia/x/67154/Insolvency+Bankruptcy/
193 See Buckel, supra note 1, at 1293 (“Chapter 15 incorporates the majority of the Model Law
verbatim, thus ‘parallel[ing] the procedural law of all adopting nations.’”) (citing Beckering, supra note
35, at 300).
194 See H.R. REP. NO. 109-31, pt. 1, at 114–16 (
) (describing the relationship of Section 1520
to Article 20 of the Model Law and Section 1522 to Article 22 of the Model Law); Explanatory
Memorandum, Cross-Border Insolvency Bill 2008 (Cth) 6 (Austl.) (“The Bill adopts the Model Law will
as few changes as are necessary to adapt it to the Australian context.”).
195 Explanatory Memorandum, Cross-Border Insolvency Bill 2008 (Cth) 26–27 (Austl.).
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2. The scope, and the modification or termination, of the stay and
suspension referred to in paragraph 1 of the present article are
subject to [refer to any provisions of law of the enacting State
relating to insolvency that apply to exceptions, limitations,
modifications or termination in respect of the stay and suspension
referred to in paragraph 1 of the present article].196
Article 20’s mandatory relief is limited by paragraph 2 of Article 20,
which incorporates domestic law into the Model Law.197 In Australia,
Chapter 5 of the Corporations Act and the Bankruptcy Act are the relevant
sources of domestic law.198
Section 1520 of the Code provides in relevant part as follows:
As Article 20 of the CBI and Section 1520 of the Code are not
wordfor-word copies of each other, the differences must be understood before a
determination as to the similarity of the provisions can be made. Since
Article 20 mirrors the language of the Model Law, the language of Section
1520 must be examined. The legislative history of Section 1520 informs
that the mandatory relief of Article 20 of the Model Law is brought into
196 Cross-Border Insolvency Act 2008 (Cth) sch 1 ch 3 art 20 (Austl.).
197 Cf. Explanatory Memorandum, Cross-Border Insolvency Bill 2008 (Cth) 11 (Austl.).
(“Paragraph 2 of article 20 of the Model Law allows for the scope, and the modification or termination,
of the stay that comes into effect upon recognition of a foreign proceeding to be made subject to
provisions of the law of the enacting State.”).
199 11 U.S.C. § 1520(a) (2012 & Supp. 2014).
Chapter 15 of the Code through the Code’s other provisions.200 Indeed,
) incorporates Article 20(
)(a) and (b) because Section
362 of the Code imposes the “restrictions required by those two
subsections.”201 Sections 1520(a)(2) and (4) apply the Code provision “that
impose the restrictions” required by Article 20(
)(c) of the Model Law.202
Also, by incorporating Sections 362 and 363 of the Code, Section 1520(a)
accomplishes Article 20(2)’s inclusion of domestic law to limit the
mandatory relief of Article 20.203
Article 22 of the CBI provides as follows:
Protection of creditors and other interested persons
1) In granting or denying relief under article 19 or 21, or in
modifying or terminating relief under paragraph 3 of the
present article, the court must be satisfied that the interests
of the creditors and other interested persons, including the
debtor, are adequately protected.
2) The court may subject relief granted under article 19 or 21
to conditions it considers appropriate.
3) The court may, at the request of the foreign representative or
a person affected by relief granted under article 19 or 21, or
at its own mtion, modify or terminate such relief.204
Section 1522 of the Code reads in relevant part as follows:
Again, since the language of the CBI in Article 22 mirrors the
200 H.R. REP. NO. 109-31, pt. 1, at 114 (
202 Id. (“In both cases, the provisions are broader and more compete than those contemplated by
the Model Law, but include all the restrictions the Model Law provisions would impose.”).
204 Cross-Border Insolvency Act 2008 (Cth) sch 1 ch 3 art 22 (Austl.).
205 11 U.S.C. § 1522(a)-(c) (2012 & Supp. 2014).
Northwestern Journal of International Law & Business
language of the Model Law, the language of Section 1522 must be
examined. The legislative history explains that Section 1522 “follows
article 22 of the Model Law with changes for U.S. usage and references to
relevant Bankruptcy Code sections.”206 However, a difference in word
choice exists with respect to Section 1522’s adoption of Article 22(
use of “sufficiently”207 rather than “adequately.”208 Section 1522’s
legislative history reveals that the change in wording was intentionally and
done so “to avoid confusion with a very specialized legal term in U.S.
bankruptcy, ‘adequate protection.’”209 Therefore, it does not seem that the
change in wording was done to change the substance of the provision or for
a policy reason.
Although the relevant provisions of the CBI and the Code contain
grammatical differences and differences in language, these differences do
not reflect substantive changes nor policy-oriented decisions to depart from
the Model Law. Indeed, the legislative history of Sections 1520 and 1522
indicates that the provisions are meant to reflect the requirements of
Articles 20 and 22 of the Model Law, and Articles 20 and 22 of the CBI
adopts the Articles 20 and 22 of the Model Law verbatim.210 Therefore, the
Australian provisions are similar for the purposes of Section 1508.
Thus, when interpreting Section 1520 or 1522, a U.S. court should
look to the Akers’ decision as heightened persuasive authority. This does
not mean the decision is binding; rather, the U.S. court is free to choose
whether to follow the interpretative rulings of the Australian court.
However, if the U.S. court decides not to follow Akers, it should
acknowledge the case and offer a rebuttal, showing why it decided not to
follow the decision of a fellow enacting court whose authority is of
VI. PRACTICAL ISSUES IN THE USE OF FOREIGN CASE LAW
Because implementing states’ case law should be considered by U.S.
courts in issues of interpretation under Chapter 15, “[a]ccess to information
about the application of the [Insolvency Model Law] in jurisdictions around
the world is thus of key importance.”211 While judges of U.S. courts may be
wary of practical issues in the use of foreign case law, particularly relating
206 H.R. REP. NO. 109-31, pt. 1, at 116 (
207 11 U.S.C. § 1522(a).
208 Cross-Border Insolvency Act 2008 (Cth) sch 1 ch 3 art 22(
209 H.R. REP. NO. 109-31, pt. 1, at 115 (
210 See id. at 114–16; Cross-Border Insolvency Act 2008 (Cth) sch 1 ch 3 arts 20 22 (Austl.).
211 U.N. COMM’N ON INT’L TRADE LAW [UNCITRAL], FACTS ABOUT CLOUT: CASE LAW ON
UNCITRAL TEXTS (2013), http://www.uncitral.org/pdf/english/clout/brochure/Facts_about_Clout_eng_
Ebook.pdf [hereinafter CLOUT FACTS].
The Harmonizing Directive of Section 1508
to accessibility,212 these hurdles can be overcome through smart use of
technology and the zealous representation of attorneys and foreign
representatives in insolvency proceedings.
Understanding the importance of access to the case law of
implementing states, the United Nations established the CLOUT system
(Case Law on UNCITRAL Texts) in 1988 to facilitate uniform
interpretation and application of UNCITRAL texts by collecting
information on relevant court decisions in countries applying those texts.213
The CLOUT system is designed to enable and encourage users to consider
the decisions of courts in other countries.214 The database includes case law
on the Insolvency Model Law.215 Access to CLOUT is online, free,
unlimited, and open to the public.216
Central to CLOUT is its compilation and organization of case
abstracts, which highlight key issues in the application and interpretation of
UNCITRAL texts.217 Abstracts are available in each of the United Nations’
six official languages, including English.218 The abstracts are designed to
present enough information for users to discern whether examination of the
complete case is useful.219 The abstracts usually contain the following
) the reasons for applying or interpreting the provision of the
UNCITRAL text in the way that it is interpreted, including any
specific reliance on a principle or other provision of that text, on
previous case law, or on relevant contract clauses and particular
facts; (2) the claim or relief sought by the claimant and any other fact
describing the procedural context within which the case was decided;
(3) the countries of the parties; and (4) the type of trade or other
212 See Ferrari, supra note 106, at 254 (“[R]equiring interpreters to consider foreign decisions
creates practical difficulties, for two main reasons: (
) foreign case law is not readily available, i.e., it
cannot easily be retrieved; and (2) even where it can be retrieved, it is often written in a language
unknown to the interpreter.”).
213 Id.; U. N. Comm. on Int’l Trade Law [UNCITRAL], Case Law on UNCITRAL Texts
(CLOUT) User Guide, ¶ 1, U.N. Doc. A/CN.9/SER.C/GUIDE/1/Rev.2 (June 2, 2010) [hereinafter
CLOUT User Guide].
214 CLOUT User Guide, supra note 213, ¶ 2.
215 CLOUT FACTS, supra note 211. As of August 26, 2015, CLOUT contains eighty-nine cases
which interpret the Insolvency Model Law from eight implementing states. Id.
216 See id.; Case Law on UNCITRAL Texts (CLOUT), U.N. COMM. ON INT’L TRADE LAW
[UNCITRAL], http://www.uncitral.org/uncitral/en/case_law.html (last visited Aug. 26, 2015).
217 CLOUT FACTS, supra note 211.
218 CLOUT User Guide, supra note 213, ¶ 5.
219 Id. ¶ 17 (“In view of the necessity for brevity, the substantive part of the abstract is ordinarily
not a complete summary of the full decision or award but should suffice as a ‘pointer’ to the specific
issues concerning the application and interpretation of the relevant UNCITRAL text in a given decision
or arbitral award.”).
Northwestern Journal of
International Law & Business
Additionally, the case abstract indicates if a translation of the case into
a language other than its original is available and if notes or commentaries
on the case exist.221
New abstracts are generally added to CLOUT every month.222
CLOUT relies on a network of national correspondents who are designated
by their respective implementing states.223 National correspondents monitor
and collect court decisions and prepare abstracts of relevant cases, which
the U.N. Secretariat translates into the five other U.N. languages.224
Cases relevant for inclusion on CLOUT are those that interpret or
apply a particular provision of the text and those cases that relate to the text
in general, such as decisions that hold that a text is not applicable.225 In
compiling cases for publication on CLOUT, priority is given to final court
decisions, but if the courts’ reasoning at the lower and appellate levels is
relevant to the interpretation of an UNCITRAL text, then abstracts for both
decisions may be included in CLOUT.226 However, if a decision on CLOUT
is subject to further review or appeal, its status as such is indicated in the
Through CLOUT, judges, law clerks, and practitioners (including
attorneys and foreign representatives in insolvency proceedings) along with
other interested parties and the public have access to the most relevant case
law which interprets the Insolvency Model Law.228 Parties can use CLOUT
to search for cases which interpret a particular provision of the Insolvency
Model Law. Searches can be conducted by article of the Insolvency Model
Law, keyword, and country among others.229 Reviewing the abstracts on
cases related to the issue at question can uncover those case which require a
full review.230 The citations of cases are provided with the abstracts for
reference, or decisions are made available individual use by the U.N.
220 Id. ¶ 18.
221 Id. ¶ 16.
222 CLOUT FACTS, supra note 211.
223 CLOUT User Guide, supra note 213, ¶ 4. As of August 13, 2015, the United States has three
national correspondents, all law professors. U. N. Comm. on Int’l Trade Law, List of CLOUT National
Correspondents – July 2015, U.N. Doc. A/CN.9/SER.C/Correspondents/1/ (
) (on file with author).
224 CLOUT User Guide, supra note 213, ¶ 5.
225 Id. ¶ 8.
226 Id. ¶ 9.
228 Id. ¶ 2 (“The purpose of the system is to promote international awareness of such legal texts .
to enable judges, arbitrators, lawyers, parties to commercial transactions and other interested persons
to take decisions and awards relating to those texts into account in dealing with matters within their
responsibilities and to promote the uniform interpretation and application of those texts.”) (emphasis
229 See U. N. COMM. ON INT’L TRADE LAW [UNCITRAL], supra note 216.
230 See CLOUT User Guide, supra note 213, ¶ 17.
The Harmonizing Directive of Section 1508
Secretariat upon request.
Thus, when confronted by an issue of interpretation under Chapter 15,
judges have options for ensuring their proper consideration of relevant case
law of implementing states as Section 1508 directs. First, judges and their
law clerks can use CLOUT to search for cases which interpret a particular
provision of the Insolvency Model Law. Also, attorneys representing the
debtor or other interested parties in a Chapter 15 case can also use CLOUT
to find case law for use in crafting their arguments on the proper
interpretation of a provision of Chapter 15.231 Further, a judge can require
counsel to submit memoranda which focus on the particular interpretive
issue and address all relevant case law of implementing states.232 The
submission of memoranda by counsel can facilitate a judge’s understanding
of the issue and the foreign case law on the matter.233
If review of CLOUT abstracts leads to the need for review of a full
decision that is not available in English, the judge may have the document
translated by a qualified translator. However, given tight judicial budgets, a
judge might be better served by requiring submission of a memorandum or
memoranda on the issue and requiring that counsel provided translated
copies of case law referenced in the memoranda to the court.234 Judges can
utilize both technology and capable legal practitioners to ensure their proper
consideration of relevant case law by implementing states. Indeed, “[t]he
excuse that a court cannot be expected to take cognizance of foreign
decisions because of linguistic barriers, time constraints, and access
constraints should not be accepted.”235 This is particularly the case in the
(still) early years of the Insolvency Model Law when it is crucial to develop
a body of case law if it is truly to become the kind of harmonized
international instrument it aims to be.236
231 See MODEL RULES OF PROF’L CONDUCT pmbl. (AM. BAR ASS’N 1983) (“As advocate, a
lawyer zealously asserts the client’s position under the rules of the adversary system.”). It follows that if
lawyers know that a judge considers foreign case law under section 1508’s directive, then lawyers, in the
interest of zealously representing their clients, should prepare arguments to include such foreign case
232 DAVID F. HERR ET AL., MOTION PRACTICE 5-5 (6th ed. 2015) (explaining in general that “a
memorandum may be voluntarily submitted by a lawyer, requested by the judge, or required by local
234 Cf. 11 U.S.C. § 1515(d) (2012 & Supp. 2014) (“The documents [required for a petition for
recognition under Chapter 15] shall be translated into English. The court may require a translation into
English of additional documents.”).
235 Monica Kilian, CISG and the Problem with Common Law Jurisdictions, 10 J. TRANSNAT’L L.
& POL’Y 217, 242 (2001).
The Insolvency Model Law operates on the notion of harmonization of
interpretation. Harmonization represents a dense network of checking and
rechecking results and building on one another’s work to create a solid and
mutually reinforced consensus.237 It is a procedural manifestation of the
adage “the whole is more than the sum of its parts.”238 In adopting the
Insolvency Model Law in Chapter 15 of the Code, Congress chose to center
the United States’ approach to cross-border insolvency on the same notion
of harmonization. The best way to achieve this goal and to maintain the
spirit of Section 1508 is to afford additional weight to the decisions of
implementing states to use their authority in a way that goes beyond merely
237 Jeremy Waldron, Foreign Law and the Modern Ius Gentium, 119 HARV. L. REV. 129, 145
238 ARISTOTLE, METAPHYSICA 10f-1045a.
239 See Flanders, supra note 47, at 82.
I. Introduction ........................................................................................... 437
Chapter 15 of the U.S. Bankruptcy Code....................................... 440
A. The UNCITRAL Model Law on Cross-Border Insolvency ..... 440
B. Chapter 15 of the U.S. Bankruptcy Code ................................. 441
A. Understanding Heightened Persuasive Authority ..................... 443 1 . Heightened Persuasive Authority-For Case Law Only .... 444 2 . Two Tales of Heightened Persuasive Authority ................. 447
B. The Insolvency Model Law and Chapter 15: Another
Context for Heightened Persuasive Authority ........................ 449 1. The Insolvency Model Law Is a “Vehicle for the
Harmonization of Laws” ................................................... 449 2. Congress Elected Harmonization of Chapter 15 with the
States ................................................................................. 452
C. Proper Treatment of Foreign Case Law Under Section 1508 .... 454
Chapter 15 ...................................................................................... 456
Comm'r .......................................................................................... 459
VI. Practical Issues in the Use of Foreign Case Law ................................ 464
VII. Conclusion......................................................................................... 468 1 Aaron L. Hammer & Matthew E. McClintock , Understanding Chapter 15 of the United States
United States , 14 LAW & BUS . REV. AM . 257 , 258 ( 2008 ) (“Economic globalization . . . has vastly
Chapter 15 , 44 GEO. J. INT'L L . 1281 , 1282 ( 2013 ). 2 Buckel, supra note 1, at 1283. 3 Hammer & McClintock, supra note 1 , at 258. 4 This Note uses the terms “insolvency” and “insolvency proceeding” to describe all formal
liquidation and reorganization proceedings . Cf . 11 U.S.C. § 101 ( 32 ) ( 2012 & Supp . 2014 ) (defining
Experience , 21 U. PA. J. INT'L ECON . L. 679 , 680 n. 2 ( 2000 ). 5 U. N. COMM'N ON INT'L TRADE LAW [UNCITRAL] , UNCITRAL MODEL LAW ON CROSS-
BORDER INSOLVENCY WITH GUIDE TO ENACTMENT AND INTERPRETATION , at 20, U.N. Sales No.
E. 14 .V. 2 ( 2014 ) [hereinafter MODEL LAW AND GUIDE TO ENACTMENT] ; Hammer & McClintock, supra
note 1 , at 258 (“ Where ten years ago, insolvencies and reorganizations with significant international
THE UNITED STATES 1 ( 2008 ). 6 See GLOSBAND ET AL., supra note 5, at 1 . 7 See Alexandra C.C. Ragan , COMI Strikes a Discordant Note: Why U.S. Courts Are Not in
Complete Harmony Despite Chapter 15 Directives , 27 EMORY BANKR. DEV . J. 117 , 118 ( 2010 ). 8 MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 20. 9 Id. at 20-21. 10 Id. 11 Id. at 19-21. 12 Id. at 19 , 25 . 13 11 U.S.C. § 1508 ( 2012 & Supp . 2014 ) ; H.R. REP . NO. 109 - 31 , pt. 1, at 309 ( 2005 ). 14 See H.R. REP . NO. 109 - 31 , pt. 1, at 109- 10 ( 2005 ). 15 This Note uses the term “implementing states” to describe those countries or jurisdictions,
countries are as follows: Australia ( 2008 ), Benin ( 2015 ), Burkina Faso ( 2015 ), Cameroon ( 2015 ),
Canada ( 2005 ), Central African Republic ( 2015 ), Chad ( 2015 ), Chile ( 2013 ), Colombia ( 2006 ),
Comoros ( 2015 ), Congo ( 2015 ), Cote d' Ivoire ( 2015 ), Democratic Republic of the Congo ( 2015 ),
Equatorial Guinea ( 2015 ), Gabon ( 2015 ), Greece ( 2010 ), Guinea ( 2015 ), Guinea-Bissau ( 2015 ), Japan
( 2000 ), Kenya ( 2015 ), Mali ( 2015 ), Mauritius ( 2009 ), Mexico ( 2000 ), Montenegro ( 2002 ), New Zealand
( 2006 ), Niger ( 2015 ), Philippines ( 2010 ), Poland ( 2003 ), Republic of Korea ( 2006 ), Romania ( 2002 ),
Senegal ( 2015 ), Serbia ( 2004 ), Seychelles ( 2013 ), Slovenia ( 2007 ), South Africa ( 2000 ), Togo ( 2015 ),
Uganda ( 2011 ), United Kingdom of Great Britain and Northern Ireland (including British Virgin Islands
( 2003 ) and Great Britain ( 2005 )), United States ( 2005 ), and Vanuatu ( 2013 ). Status: UNCITRAL Model
Law on Cross-Border Insolvency , UNCITRAL ( 1997 ), http://www.uncitral.org/uncitral
/en/uncitral_texts/insolvency/1997Model_status. html (last visited Oct . 29 , 2015 ). The term
uniform acts or conventions. When used in that context, the relevant act or convention will be specified. 16 Although the exact weight to be placed on these cases is not explicitly stated , Congress
covered in greater detail throughout this Note. 17 Hammer & McClintock, supra note 1 , at 259, 262 (“ Early cases interpreting Chapter 15 have
EU Regulation.”) . 18 Cf. V. Susanne Cook, The U.N. Convention on Contracts for the International Sale of Goods: A
Mandate to Abandon Legal Ethnocentricity, 16 J.L. & COM . 257 ( 1997 ) (explaining courts' difficulty in 27 Id . at 32 . 28 Id. at 19; see Andre J. Berends , The UNCITRAL Model Law on Cross-Border Insolvency: A
Comprehensive Overview , 6 TUL. J. INT'L & COMP . L. 309 , 321 ( 1998 ) (“The Model Law does not
modify the existing material rules concerning insolvency proceedings in the enacting State .”). 29 MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 20; Berends, supra note 28, at 312.
insolvency proceedings such as (1) an inward-bound request for recognition of a foreign proceeding, (2)
an insolvency proceeding commenced under the laws of the implementing state, (3) coordination of
concurrent proceedings in two or more countries, and (4) participation of foreign creditors in insolvency
proceedings taking place in the implementing state . Buckel, supra note 1 , at 1289 (citing BOB WESSELS
ET AL., INTERNATIONAL COOPERATION IN BANKRUPTCY AND INSOLVENCY MATTERS 240 ( 2009 )). 30 See supra note 15 for more information on enacting countries. 31 MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 25. 32 Id. 33 Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 , Pub. L. 109-8, § 801 ( a ),
119 Stat. 23 , 135 - 45 ( 2005 ). 34 Alesia Ramney-Marinelli , Overview of Chapter 15 Ancillary and Other Cross-Border Cases ,
82 AM. BANKR . L. J. 269 , 269 ( 2008 ). 35 Buckel, supra note 1, at 1293 ( citing Kevin J. Beckering , United States Cross-Border
Corporate Insolvency: The Impact of Chapter 15 on Comity and the New Legal Environment , 14 L. &
BUS. REV. AM . 281 , 282 ( 2008 ) ) . For example, regarding Section 1501, the report states that “it largely
1503, the report states that “this section is taken exactly from the Model Law with only minor
adaptations of terminology .” H.R. REP . NO. 109 - 31 , pt. 1, at 106, 107 ( 2005 ). Also, regarding Section
1508, the report states that “[c]hanges to the language were made to express the concepts more clearly in
United States vernacular.” Id. at 109 . 36 Buckel, supra note 1, at 1289 (citing Beckering, supra note 35, at 282) . 37 Compare the drafting of 11 U .S.C. § 1501 (a) ( 2012 & Supp . 2014 ) (stating one of the
ENACTMENT, supra note 5, at 3 (stating one of the objectives of the law is “cooperation between the
insolvency”) . Other objectives of Chapter 15 are to provide legal certainty for trade and investment,
protect investment and preserve employment . 11 U.S.C. § 1501 (a). Other objectives of the Insolvency
Model Law are discussed in Part I of this Note. 38 Hammer & McClintock, supra note 1, at 264. 39 Id. 40 Id. 41 Id . 91 Philip T. Hackney, Is the United Nations Convention on the International Sale of Goods
Achieving Uniformity ?, 61 LA. L. REV. 473 , 479 ( 2001 ). 92 Harry M. Flechtner , The Several Texts of the CISG in a Decentralized System: Observations on
Translations , Reservations, and Other Challenges to the Uniformity Principle in Article 7(1), 17 J.L. &
COM. 187 , 215 ( 1998 ). 93 ABM Escrow Closing & Consulting, Inc. v. Matanuska Maid, Inc., 659 P.2d 1170 , 1172
(Alaska 1983 ) (“Although precedent from other jurisdictions is, of course, not binding upon us , we
jurisdictions.”); Flechtner, supra note 92, at 215 . 94 Flanders, supra note 47, at 80 . 102 E-COMMERCE MODEL LAW AND GUIDE, supra note 101, at 29. 103 Id. at 30 (emphasis added) . 104 Id. at 29 . Other uniform law instruments contain a similar provision concerning international
Obligations , opened for signature June 19, 1980 , 1980 O.J. (L 266) 1 , art . 18 , ( EC ); Int'l Inst. for the
Unification of Private Law [UNIDROIT], Convention on International Factoring, art. 4 , May 28 , 1988 ,
27 I.L.M. 943; Int 'l Inst. for the Unification of Private Law [UNIDROIT], Convention on International
Financial Leasing , art. 6, May 28 , 1988 , 27 I.L.M. 931 . 105 CISG, supra note 101, at 36 . 106 Franco Ferrari, CISG Case Law: A New Challenge for Interpreters? , 17 J.L. & COM . 245 , 246
( 1998 ). 107 Id. at 247 . 108 See MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 54 (“A provision similar to the
one contained in article 8 appears in a number of private law treaties . . . . More recently, it has been
basis that a State enacting a model law would have an interest in its harmonized interpretation . ”) . 112 MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 54. 113 Id. at 108 . 114 U.N. Comm'n on Int'l Trade Law [UNCITRAL], Working Group V ( Insolvency Law) , Rep.
on Its 41st Session, Apr. 30-May 4 , 2012 , ¶¶ 37 - 38 , U.N. Doc . A/CN.9/742 (May 8, 2012 ) [hereinafter
Insolvency Working Group 41st Session Report]; U.N. Comm'n on Int'l Trade Law [UNCITRAL],
Working Group V (Insolvency Law) , Proposal for Its 41st Session, Apr. 30-May 4 , 2012 , ¶¶ 14 - 17 ,
U.N. Doc . A/CN.9/WG.V/WP.105 ( Mar . 28, 2012 ) [hereinafter Insolvency Working Group 41st Session
Proposal]. 115 Insolvency Working Group 41st Session Report, supra note 114 , ¶¶ 37 - 38 ; Insolvency
Working Group 41st Session Proposal, supra note 114 , ¶¶ 14 - 17 . 116 Insolvency Working Group 41st Session Report, supra note 114 , ¶¶ 37 - 38 ; Insolvency
Working Group 41st Session Proposal, supra note 114 , ¶¶ 14 - 17 . 117 Insolvency Working Group 41st Session Report, supra note 114, ¶ 38. 118 Insolvency Working Group 39th Session Report, supra note 100 , ¶ 24 . 119 JUDICIAL PERSPECTIVE, supra note 24, at 7 (“[A]ny court considering legislation based on the
Model Law is likely to find the international jurisprudence of assistance to its interpretation . ”) . 129 H.R. REP . NO. 109 - 31 , pt. 1, at 109- 10 ( 2005 ) (“Interpretation of this chapter on a uniform
treaties, model laws, and other text promulgated by UNCITRAL .”). 130 See MODEL LAW AND GUIDE TO ENACTMENT, supra note 5 , at 54; General Assembly 30th
Session Report, supra note 100 , ¶ 174 (explaining the adoption of Article 8 to the Model Law );
Insolvency Working Group 39th Session Report, supra note 100 , ¶ 39 (“ The importance of Article 8 to
interpretation is noted in the decisions of a number of courts .”). 131 See MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 24 (informing that the Guide to
Enactment is directed at legislators to assist in their preparation of enacting legislation ). 132 H.R. REP . NO. 109 - 31 , pt. 1, at 106 n. 101 ( 2005 ). 133 See id .; MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 5. 134 MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 25; JUDICIAL PERSPECTIVE , supra
note 24, at 7 (“While the UNCITRAL Model Law emphasizes the desirability of a uniform approach to
approach in its own legislation.”) (emphasis added). 135 MODEL LAW AND GUIDE TO ENACTMENT, supra note 5, at 25 (“In incorporating the text of a
model law into its system, a State may modify or leave out some of its provisions . ”) . 136 H.R. REP . NO. 109 - 31 , pt. 1, at 109- 10 ( 2005 ). 137 Id. 138 See Flanders, supra note 47, at 82. 139 Id. 140 Id. 141 Id . (quoting RICHARD A . POSNER, HOW JUDGES THINK 349 ( 2008 )). 142 H.R. REP . NO. 109 - 31 , pt. 1, at 110 ( 2005 ). 143 Id. at 109 (explaining that “[i]nterpretation of this chapter  will be aided by reference [to
several categories of non-U.S . sources]”); Ramney-Marinelli, supra note 34 , at 273 . 144 H.R. REP . NO. 109 - 31 , pt. 1, at 109- 10 ( 2005 ); Ramney-Marinelli, supra note 34 , at 273 . 145 H.R. REP . NO. 109 - 31 , pt. 1, at 110 ( 2005 ) ; cf . Explanatory Memorandum, Cross-Border
Insolvency Bill 2008 ( Cth) 6 (Austrl.) (“It is expected that international jurisprudence on key concepts in
Cross-Border Insolvency Bill.”). 146 Cf. Jenny S. Martinez, Towards an International Judicial System , 56 STAN. L. REV. 429 , 512 -
13 ( 2003 ) (“Given that the intention of such [international] treaties [like the U .N. Convention of