This Act adopts the UNCITRAL Model Law on Cross‑Border Insolvency into Australian law (with modifications), giving foreign insolvency representatives a statutory route to seek recognition and cooperation from designated Australian courts. It requires disclosure and updates by foreign representatives, protects foreign unsecured creditors from being downgraded solely for being foreign (except tax/social security claims), and sets how stays, avoidance rules and conflicts with domestic insolvency laws are resolved. The Governor‑General may make regulations excluding classes of entities.
The Cross-Border Insolvency Act 2008 (the Act) enacts the UNCITRAL Model Law on Cross-Border Insolvency (the Model Law) as Australian domestic law, subject to the modifications and clarifications contained in Part 2. Section 6 provides that, subject to the Act, the Model Law “with the modifications set out in this Part, has the force of law in Australia”. The Model Law text itself appears as Schedule 1.
The Act’s core function is to facilitate recognition of foreign insolvency proceedings, coordination between Australian and foreign courts, and fair treatment of creditors whose claims cross borders. It does so by:
Designating competent Australian courts (Federal Court for individuals; Federal Court and State/Territory Supreme Courts for companies – s 10).
Identifying the Australian statutes that constitute “laws relating to insolvency” for the purposes of the Model Law: the Bankruptcy Act 1966 and Chapter 5 (excluding Parts 5.2 and 5.4A), s 601CL and Schedule 2 of the Corporations Act 2001 (s 8).
Excluding prescribed entities from the Model Law’s operation (s 9).
Substituting the Australian office-holder terminology: “trustee” (within the meaning of Bankruptcy Act 1966 s 5(1)) for personal insolvency and “registered liquidator” (Corporations Act 2001 s 9) for corporate insolvency (s 11).
Replacing Article 13(2) of the Model Law with a rule that foreign creditors (other than tax and social-security claims) must not be ranked below unsecured domestic creditors solely by reason of their foreign status (s 12).
Adding mandatory disclosures to recognition applications and subsequent updates so that the Australian court is informed of domestic proceedings, receiverships, controllers and managing controllers under the (ss 13 and 14).
Current sections
Direct links to the current provisions in Cross-Border Insolvency Act 2008.
26
Part 1
Preliminary
Part 1—Preliminary
1
Short title
1 Short title
This Act may be cited as the Cross‑Border Insolvency Act 2008.
2
Commencement
2 Commencement
(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
<table cellspacing="0" cellpadding="0" style="width:355.55pt; border-collapse:collapse"><thead><tr><td colspan="3" style="width:344.85pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="TableHeading"><span>Commencement information</span></p></td></tr><tr><td style="width:74.35pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Column 1</span></p></td><td style="width:180.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Column 2</span></p></td><td style="width:68.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Column 3</span></p></td></tr><tr><td style="width:74.35pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Provision(s)</span></p></td><td style="width:180.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Commencement</span></p></td><td style="width:68.4pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Date/Details</span></p></td></tr></thead><tbody><tr><td style="width:74.35pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>1.</span><span> </span><span>Sections</span><span> </span><span>1 to 4 and anything in this Act not elsewhere covered by this table</span></p></td><td style="width:180.7pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>The day on which this Act receives the Royal Assent.</span></p></td><td style="width:68.4pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>26</span><span> </span><span>May 2008</span></p></td></tr><tr><td style="width:74.35pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>2.</span><span> </span><span>Parts</span><span> </span><span>2, 3 and 4</span></p></td><td style="width:180.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>A single day to be fixed by Proclamation.</span></p><p class="Tabletext"><span>However, if any of the provision(s) do not commence within the period of 6 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period.</span></p></td><td style="width:68.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>1</span><span> </span><span>July 2008</span></p><p class="Tabletext"><span>(</span><span style="font-style:italic">see</span><span> F2008L02165)</span></p></td></tr><tr><td style="width:74.35pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>3.</span><span> </span><span>Schedule</span><span> </span><span>1</span></p></td><td style="width:180.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>At the same time as the provision(s) covered by table item</span><span> </span><span>2.</span></p></td><td style="width:68.4pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>1</span><span> </span><span>July 2008</span></p></td></tr></tbody></table>
Note: This table relates only to the provisions of this Act as originally passed by both Houses of the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent.
(2) Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act.
3
Crown to be bound
3 Crown to be bound
This Act binds the Crown in each of its capacities.
Part 2
Model Law on Cross‑Border Insolvency
Part 2—Model Law on Cross‑Border Insolvency
5
Definitions
5 Definitions
(1) In this Act:
external Territory: see subsection 19(6).
Model Law means the Model Law on Cross‑Border Insolvency of the United Nations Commission on International Trade Law, set out in the Annex to United Nations General Assembly Resolution A/RES/52/158 (1997), the English text of which is set out in Schedule 1 to this Act.
Note: In 2008, the text of United Nations General Assembly Resolutions was accessible through the United Nations website (www.un.org).
(2) An expression that is used in both this Act and the Model Law (whether or not a particular meaning is given to it by the Model Law) has, in this Act, the same meaning as in the Model Law.
6
Model Law to have force of law in Australia
6 Model Law to have force of law in Australia
Subject to this Act, the Model Law, with the modifications set out in this Part, has the force of law in Australia.
7
References in Model Law to this State
7 References in Model Law to this State
In the Model Law (as it has the force of law in Australia), a reference to this State is a reference to Australia.
Note: See also section 19 for references to laws/law of this State and court of this State.
8
Identifying Australian laws relating to insolvency
8 Identifying Australian laws relating to insolvency
The Model Law has the force of law in Australia as if the Model Law referred to:
(a) the Bankruptcy Act 1966; and
(b) Chapter 5 (other than Parts 5.2 and 5.4A) of the Corporations Act 2001, section 601CL of that Act and Schedule 2 to that Act;
wherever the Model Law provides that the laws of the enacting State relating to insolvency are to be identified.
9
Entities that are not covered by the Model Law
9 Entities that are not covered by the Model Law
Entities prescribed by the regulations are designated for the purposes of paragraph 2 of Article 1 of the Model Law (as it has the force of law in Australia).
Note 1: The effect of prescribing an entity is that the Model Law does not apply to it.
Note 2: The regulations may prescribe the entity by reference to a class. See subsection 13(3) of the Legislation Act 2003.
10
Courts competent to perform functions under Model Law
10 Courts competent to perform functions under Model Law
The following courts are taken to be specified in Article 4 of the Model Law (as it has the force of law in Australia) as courts competent to perform the functions referred to in the Model Law relating to recognition of foreign proceedings and cooperation with foreign courts:
(a) if the functions relate to a proceeding involving a debtor who is an individual—the Federal Court of Australia;
(b) if the functions relate to a proceeding involving a debtor other than an individual:
(i) the Federal Court of Australia; and
(ii) the Supreme Court of a State or Territory.
Note: References in the Model Law to a court or the court are, because of this section, to be read as references to the Federal Court of Australia or the Supreme Court of a State or Territory.
11
Functions of the trustee (in bankruptcy proceedings) and the registered liquidator (in corporate insolvencies)
11 Functions of the trustee (in bankruptcy proceedings) and the registered liquidator (in corporate insolvencies)
The Model Law has the force of law in Australia as if the Model Law referred to whichever of the following is appropriate:
(a) the trustee (within the meaning of subsection 5(1) of the Bankruptcy Act 1966);
(b) a registered liquidator (within the meaning of section 9 of the Corporations Act 2001);
wherever the Model Law indicates that the title of the person or body administering a reorganization or liquidation under the law of the enacting State is to be inserted.
12
Access of foreign creditors to Australian insolvency proceedings
12 Access of foreign creditors to Australian insolvency proceedings
(1) For the purposes of Article 13 of the Model Law (as it has the force of law in Australia), the alternative wording set out in footnote 2 to the Model Law replaces paragraph 2 of that Article.
(2) For the purposes of the replacement paragraph, the claims of foreign creditors, other than those concerning tax and social security obligations, must not be ranked lower than the unsecured claims of other creditors solely because the creditor concerned is a foreign creditor.
13
Application for recognition of foreign proceeding
13 Application for recognition of foreign proceeding
In addition to the requirement in paragraph 3 of Article 15 of the Model Law (as it has the force of law in Australia) that an application for recognition be accompanied by a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative, the application must be accompanied by a statement identifying:
(a) all proceedings under the Bankruptcy Act 1966 in respect of the debtor; and
(b) any appointment of a receiver (within the meaning of section 416 of the Corporations Act 2001), or a controller or a managing controller (both within the meaning of section 9 of that Act), in relation to the property of the debtor; and
(c) all proceedings under Chapter 5 of the Corporations Act 2001, section 601CL of that Act or Schedule 2 to that Act, in respect of the debtor;
that are known to the foreign representative.
14
Subsequent information
14 Subsequent information
In addition to the requirement in subparagraph (b) of Article 18 of the Model Law (as it has the force of law in Australia) that the foreign representative inform the court promptly of any other foreign proceeding that becomes known to the foreign representative, the foreign representative must inform the court promptly of:
(a) any proceeding under the Bankruptcy Act 1966 regarding the same debtor; and
(b) any appointment of a receiver (within the meaning of section 416 of the Corporations Act 2001), or a controller or a managing controller (both within the meaning of section 9 of that Act), in relation to the property of the same debtor; and
(c) any proceeding under Chapter 5 of the Corporations Act 2001, section 601CL of that Act or Schedule 2 to that Act, regarding the same debtor;
that becomes known to the foreign representative.
15
Relief that may be granted upon application for recognition of a foreign proceeding
15 Relief that may be granted upon application for recognition of a foreign proceeding
To avoid doubt, no provisions are inserted or referred to in paragraph 2 of Article 19 of the Model Law (as it has the force of law in Australia).
16
Effects of recognition of a foreign main proceeding
16 Effects of recognition of a foreign main proceeding
For the purposes of paragraph 2 of Article 20 of the Model Law (as it has the force of law in Australia), the scope and the modification or termination of the stay or suspension referred to in paragraph 1 of that Article, are the same as would apply if the stay or suspension arose under:
(a) the Bankruptcy Act 1966; or
(b) Chapter 5 (other than Parts 5.2 and 5.4A) of the Corporations Act 2001;
as the case requires.
17
Actions to avoid acts detrimental to creditors
17 Actions to avoid acts detrimental to creditors
(1) The actions referred to for the purposes of paragraph 1 of Article 23 of the Model Law (as it has the force of law in Australia) are actions arising under or because of:
(a) section 120, 121, 121A, 122, 128B or 128C or Division 4A of Part VI of the Bankruptcy Act 1966; or
(b) Division 2 of Part 5.7B of the Corporations Act 2001.
(2) A provision referred to in paragraph (1)(a) or (b) applies, with appropriate changes, in relation to an action for the purposes of a foreign proceeding in the same way it would apply if the action were for the purposes of a proceeding in relation to:
(a) a bankrupt (within the meaning of subsection 5(1) of the Bankruptcy Act 1966); or
(b) a company (within the meaning of section 9 of the Corporations Act 2001);
as the case requires.
18
Forms of cooperation
18 Forms of cooperation
To avoid doubt, no additional forms or examples of cooperation are added by subparagraph (f) of Article 27 of the Model Law (as it has the force of law in Australia).
19
References to laws/law of this State and courts of this State
19 References to laws/law of this State and courts of this State
Laws/law of this State
(1) A reference in Article 7 of the Model Law (as it has the force of law in Australia) to laws of this State is a reference to the following laws:
(a) a law of the Commonwealth;
(b) a law of a State;
(c) a law of a Territory (other than an external Territory).
(2) A reference in Article 21 of the Model Law (as it has the force of law in Australia) to the laws of this State is a reference to a law of the Commonwealth.
(3) A reference in Articles 14, 21, 23, 28 and 29 of the Model Law (as it has the force of law in Australia) to the law of this State is a reference to a law of the Commonwealth.
(4) A reference in Article 24 of the Model Law (as it has the force of law in Australia) to the law of this State is a reference to the following laws:
(a) a law of the Commonwealth;
(b) a law of a State;
(c) a law of a Territory (other than an external Territory).
Courts of this State
(5) A reference in Article 10 of the Model Law (as it has the force of law in Australia) to the courts of this State is a reference to the following courts:
(a) a federal court;
(b) a court of a State;
(c) a court of a Territory (other than an external Territory).
Definition
(6) In this section:
external Territory does not include Norfolk Island, the Territory of Christmas Island or the Territory of the Cocos (Keeling) Islands.
20
Application
20 Application
(1) This Act applies to proceedings under:
(a) the Bankruptcy Act 1966; or
(b) Chapter 5 (other than Parts 5.2 and 5.4A) of the Corporations Act 2001, section 601CL of that Act and Schedule 2 to that Act;
commenced before, on or after the commencement of this Part.
(2) This Act applies to foreign proceedings commenced on or after the commencement of this Part.
Part 3
Interaction with other Acts
Part 3—Interaction with other Acts
21
Interaction with the Bankruptcy Act 1966
21 Interaction with the Bankruptcy Act 1966
If the Model Law (as it has the force of law in Australia) or a provision of this Act is inconsistent with section 29 of the Bankruptcy Act 1966, the Model Law or the provision of this Act prevails, and that section has no effect to the extent of the inconsistency.
22
Interaction with the Corporations Act 2001
22 Interaction with the Corporations Act 2001
(1) If the Model Law (as it has the force of law in Australia) or a provision of this Act is inconsistent with a provision of:
(a) Division 9 of Part 5.6 of the Corporations Act 2001; or
(b) Part 5.7 of the Corporations Act 2001; or
(c) Schedule 2 to the Corporations Act 2001;
the Model Law or the provision of this Act prevails, and the provision of the Corporations Act 2001 has no effect to the extent of the inconsistency.
(2) The Model Law (as it has the force of law in Australia) and this Act, are in addition to, and not in derogation of, section 601CL of the Corporations Act 2001.
Part 4
Regulations
Part 4—Regulations
23
Regulations
23 Regulations
The Governor‑General may make regulations prescribing matters:
(a) required or permitted by this Act to be prescribed; or
(b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.
Source text: opening excerpt
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Part 1 Preliminary
Part 1—Preliminary
1 Short title
1 Short title
This Act may be cited as the Cross‑Border Insolvency Act 2008.
2 Commencement
2 Commencement
(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
<table cellspacing="0" cellpadding="0" style="width:355.55pt; border-collapse:collapse"><thead><tr><td colspan="3" style="width:344.85pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="TableHeading"><span>Commencement information</span></p></td></tr><tr><td style="width:74.35pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Column 1</span></p></td><td style="width:180.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Column 2</span></p></td><td style="width:68.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Column 3</span></p></td></tr><tr><td style="width:74.35pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Provision(s)</span></p></td><td style="width:180.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Commencement</span></p></td><td style="width:68.4pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext" style="page-break-after:avoid"><span style="font-weight:bold">Date/Details</span></p></td></tr></thead><tbody><tr><td style="width:74.35pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>1.</span><span> </span><span>Sections</span><span> </span><span>1 to 4 and anything in this Act not elsewhere covered by this table</span></p></td><td style="width:180.7pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>The day on which this Act receives the Royal Assent.</span></p></td><td style="width:68.4pt; border-top:1.5pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>26</span><span> </span><span>May 2008</span></p></td></tr><tr><td style="width:74.35pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>2.</span><span> </span><span>Parts</span><span> </span><span>2, 3 and 4</span></p></td><td style="width:180.7pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>A single day to be fixed by Proclamation.</span></p><p class="Tabletext"><span>However, if any of the provision(s) do not commence within the period of 6 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period.</span></p></td><td style="width:68.4pt; border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>1</span><span> </span><span>July 2008</span></p><p class="Tabletext"><span>(</span><span style="font-style:italic">see</span><span> F2008L02165)</span></p></td></tr><tr><td style="width:74.35pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>3.</span><span> </span><span>Schedule</span><span> </span><span>1</span></p></td><td style="width:180.7pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>At the same time as the provision(s) covered by table item</span><span> </span><span>2.</span></p></td><td style="width:68.4pt; border-top:0.75pt solid #000000; border-bottom:1.5pt solid #000000; padding-right:5.35pt; padding-left:5.35pt; vertical-align:top"><p class="Tabletext"><span>1</span><span> </span><span>July 2008</span></p></td></tr></tbody></table>
Corporations Act 2001
Clarifying the scope of the automatic stay that arises on recognition of a foreign main proceeding by reference to the stay regime that would apply under the Bankruptcy Act 1966 or Chapter 5 of the Corporations Act 2001 (s 16).
Designating specific Australian avoidance provisions that may be invoked under Article 23 of the Model Law: Bankruptcy Act 1966 ss 120, 121, 121A, 122, 128B, 128C and Division 4A of Part VI, and Corporations Act 2001 Division 2 of Part 5.7B (s 17).
Confirming that no additional forms of cooperation are added to Article 27(f) and that no provisions are inserted into Article 19(2) (ss 15 and 18).
Part 3 resolves conflicts with existing legislation. Where the Model Law or the Act is inconsistent with Bankruptcy Act 1966 s 29, the Model Law prevails (s 21). Similar supremacy is given over Corporations Act 2001 Division 9 of Part 5.6, Part 5.7 and Schedule 2, while the Act is expressed to be additional to Corporations Act 2001 s 601CL (s 22). The Act applies to both existing and future domestic and foreign proceedings (s 20).
In short, the statute does not create a new substantive insolvency regime; it imports, adapts and prioritises an international procedural framework that overlays Australia’s pre-existing personal and corporate insolvency statutes.
Who it affects
The Act primarily affects four groups:
Foreign representatives – persons or bodies appointed in foreign insolvency proceedings who wish to obtain recognition, relief or cooperation from Australian courts (Model Law Articles 9–15 as modified).
Australian courts and registered liquidators/trustees – the Federal Court, State and Territory Supreme Courts (s 10), and the insolvency practitioners identified in s 11, who must apply the Model Law’s recognition, stay, turnover and cooperation rules.
Creditors with cross-border claims – both foreign creditors seeking to participate in Australian proceedings on equal footing (s 12) and Australian creditors whose recoveries may be affected by recognition of a foreign main proceeding and the consequent stay (s 16).
Debtors (individuals and companies) with connections to more than one jurisdiction. The Act applies to proceedings under the Bankruptcy Act 1966 or the specified parts of the Corporations Act 2001 whenever those proceedings were commenced (s 20(1)), and to foreign proceedings commenced on or after the Act’s commencement (s 20(2)).
Regulations made under s 23 can exclude classes of entities (s 9), thereby removing them from the Model Law’s scope. The Crown is bound in all capacities (s 3).
Because the Act operates by reference to the Bankruptcy Act 1966 and the Corporations Act 2001, its practical reach extends to every Australian bankruptcy, deed of company arrangement, creditors’ voluntary winding up, court-ordered winding up, and scheme of arrangement that has international elements.
Key duties and rights
Foreign representatives’ duties
An application for recognition must be accompanied not only by the Model Law Article 15(3) statement of known foreign proceedings but also by a statement identifying all Australian Bankruptcy Act 1966 proceedings, receiverships, controllers, managing controllers and Corporations Act 2001 Chapter 5 / s 601CL / Schedule 2 proceedings known to the representative (s 13).
The representative must promptly inform the court of any subsequent Australian proceedings or appointments of the kinds listed above (s 14).
Rights of foreign creditors
Section 12(2) guarantees that, for the purposes of the substituted Article 13(2), foreign creditors (other than tax and social-security claimants) are not to be ranked below unsecured domestic creditors merely because they are foreign.
Australian courts’ powers and obligations
Once a foreign main proceeding is recognised, the stay and suspension effects under Model Law Article 20(1) are given the same scope, modification and termination rules that would apply under the Bankruptcy Act 1966 or Chapter 5 (excluding Parts 5.2 and 5.4A) of the Corporations Act 2001 (s 16). Avoidance actions listed in s 17(1) are available to the foreign representative as if the proceeding were domestic. Cooperation obligations under Article 27 are unmodified beyond the clarification in s 18.
Office-holders
Trustees in bankruptcy and registered liquidators must administer estates consistently with any recognised foreign proceeding and any relief granted by the Australian court under Articles 19, 21 or 27.
Penalties and enforcement
The Act itself contains no criminal offence provisions or civil penalty regimes. Enforcement occurs indirectly through:
The court’s inherent contempt powers when orders made under the Model Law (e.g. turnover orders, stays, or cooperation directions) are breached.
The ordinary enforcement mechanisms of the Bankruptcy Act 1966 and Corporations Act 2001 once an Australian proceeding is stayed, varied or coordinated under the Model Law.
The availability of the avoidance actions listed in s 17, which carry their own statutory remedies (recovery of property or compensation).
Because the Model Law is given the force of law (s 6), breaches of its mandatory provisions as modified by the Act are enforceable as breaches of Australian statute. Section 21 gives the Model Law primacy over Bankruptcy Act 1966 s 29 in case of inconsistency, removing any defence that might otherwise have been available under that section.
How it interacts with other laws
The Act is deliberately parasitic on two principal statutes. Section 8 maps the Model Law’s references to “laws relating to insolvency” onto the Bankruptcy Act 1966 and defined portions of the Corporations Act 2001. Section 11 substitutes the relevant Australian office-holder titles. Section 16 ties the Article 20 stay to the domestic stay regime. Section 17 imports specific Australian avoidance powers.
Part 3 expressly resolves conflicts. The Model Law prevails over Bankruptcy Act 1966 s 29 (s 21) and over Corporations Act 2001 Division 9 of Part 5.6, Part 5.7 and Schedule 2 (s 22(1)). Conversely, the Act and Model Law are “in addition to, and not in derogation of” Corporations Act 2001 s 601CL (s 22(2)).
Section 19 contains a complex set of interpretive rules that differentiate between references to “laws of this State”, “law of this State” and “courts of this State” appearing in various Model Law Articles. For example, Article 7’s reference to laws of this State includes Commonwealth, State and (non-external) Territory laws, whereas Article 21’s reference is limited to Commonwealth law only. These rules prevent unintended expansion or contraction of the Model Law’s scope within Australia’s federal system.
The Act applies to proceedings commenced before or after its own commencement (s 20), ensuring seamless integration with the existing insolvency framework.
Recent changes and why
The text supplied is the Act as originally enacted in 2008. No amendments appear in the excerpt. The modifications to the Model Law were built in at enactment to achieve three policy goals: (1) to align the stay and avoidance regimes with existing Australian law so that recognition does not create a radically different substantive outcome; (2) to ensure Australian courts receive complete information about parallel domestic proceedings and security interests (ss 13 and 14); and (3) to preserve the priority of the Corporations Act 2001 s 601CL registration regime for foreign companies. These changes were necessary because a pure, unmodified adoption of the Model Law would have created uncertainty at the intersection of federal insolvency law, State Supreme Court jurisdiction and the federal–State divide on external Territories.
Court challenges and controversies
The provided text does not contain any reported court decisions. All claims in this deep-dive are therefore grounded exclusively in the statutory language. The structure of ss 13 and 14, which impose additional notification obligations beyond the Model Law, has the potential to generate disputes about the breadth of a foreign representative’s knowledge and the precise moment at which knowledge is acquired. Likewise, the differential treatment of “laws of this State” in s 19 is capable of giving rise to arguments about whether a particular State or Territory law is available to support relief under Article 21. Because the Act gives the Model Law the force of law, any interpretive controversy is resolved as a matter of Australian statutory construction rather than treaty interpretation.
Gotchas
Most practitioners assume the Model Law operates uniformly; the Australian version is heavily customised. Three traps are commonly overlooked:
The s 13 and s 14 overlays – a foreign representative who files a bare Model Law application without the additional Australian-proceeding schedule risks the application being defective. The obligation is continuing; subsequent discovery of an Australian receiver appointment must be notified “promptly”.
Entity exclusions by regulation – s 9 permits regulations to carve out entire classes. A foreign representative must check the latest regulations before assuming the Model Law applies.
Differential meaning of “law of this State” – s 19(1)–(4) assigns three different meanings depending on which Model Law Article is engaged. An Article 21 application cannot rely on State or Territory law; only Commonwealth law is available. This is a narrower gateway than many overseas counsel expect.
Stay scope is not universal – s 16 ties the Article 20 stay to the scope that would exist under the Bankruptcy Act 1966 or Chapter 5 (excluding Parts 5.2 and 5.4A). The exclusions mean that certain restructuring and receivership regimes are outside the automatic stay, a nuance easily missed when reading the Model Law in isolation.
No additional cooperation forms – s 18 confirms that Article 27(f) is not expanded. Courts cannot invent new cooperation mechanisms; they are limited to those listed in the Model Law as enacted.
How to comply
For foreign representatives
Prepare a recognition application that includes both the Model Law Article 15(3) statement and the additional Australian-proceeding statement required by s 13.
Institute a standing search or monitoring protocol for Australian Bankruptcy Act 1966 and Corporations Act 2001 proceedings so that s 14 notifications can be given immediately.
Identify the correct Australian court under s 10 before filing.
For Australian office-holders
Once recognition of a foreign main proceeding occurs, treat the Article 20 stay as having the identical scope, exceptions and duration that would apply under the domestic Act identified in s 16.
Cooperate with the foreign representative under Article 27, but do not volunteer forms of cooperation beyond those listed.
For creditors
When proving in an Australian insolvency, foreign creditors (other than tax and social-security creditors) should cite s 12(2) if any attempt is made to subordinate their claims solely on nationality grounds.
For practitioners advising debtors
Assess whether any foreign proceeding meets the centre-of-main-interests or establishment tests in the Model Law. If recognition is likely, model the likely Australian stay by reference to the domestic statute identified in s 16 rather than the Model Law text alone.
General compliance steps
Monitor regulations made under s 23 and the s 9 exclusions.
In any cross-border matter, map the applicable Australian “law of this State” using the s 19 matrix before advising on available relief.
Ensure engagement letters and retainer documents address the additional notification obligations imposed on foreign representatives by ss 13 and 14.
Compliance is achieved by treating the Act as a set of interpretive lenses that must be placed over the Model Law before any Article is applied in Australia. The statute is not self-contained; every substantive answer requires simultaneous reference to the Model Law (Schedule 1), the modifications in Part 2, and the interacted-with provisions of the Bankruptcy Act 1966 and Corporations Act 2001.
Note: This table relates only to the provisions of this Act as originally passed by both Houses of the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent.
(2) Column 3 of the table contains additional information that is not part of this Act. Information in this column may be added to or edited in any published version of this Act.
3 Crown to be bound
3 Crown to be bound
This Act binds the Crown in each of its capacities.
Part 2 Model Law on Cross‑Border Insolvency
Part 2—Model Law on Cross‑Border Insolvency
5 Definitions
5 Definitions
(1) In this Act:
external Territory: see subsection 19(6).
Model Law means the Model Law on Cross‑Border Insolvency of the United Nations Commission on International Trade Law, set out in the Annex to United Nations General Assembly Resolution A/RES/52/158 (1997), the English text of which is set out in Schedule 1 to this Act.
Note: In 2008, the text of United Nations General Assembly Resolutions was accessible through the United Nations website (www.un.org).
(2) An expression that is used in both this Act and the Model Law (whether or not a particular meaning is given to it by the Model Law) has, in this Act, the same meaning as in the Model Law.
6 Model Law to have force of law in Australia
6 Model Law to have force of law in Australia
Subject to this Act, the Model Law, with the modifications set out in this Part, has the force of law in Australia.
7 References in Model Law to this State
7 References in Model Law to this State
In the Model Law (as it has the force of law in Australia), a reference to this State is a reference to Australia.
Note: See also section 19 for references to laws/law of this State and court of this State.
8 Identifying Australian laws relating to insolvency
8 Identifying Australian laws relating to insolvency
The Model Law has the force of law in Australia as if the Model Law referred to:
(a) the Bankruptcy Act 1966; and
(b) Chapter 5 (other than Parts 5.2 and 5.4A) of the Corporations Act 2001, section 601CL of that Act and Schedule 2 to that Act;
wherever the Model Law provides that the laws of the enacting State relating to insolvency are to be identified.
9 Entities that are not covered by the Model Law
9 Entities that are not covered by the Model Law
Entities prescribed by the regulations are designated for the purposes of paragraph 2 of Article 1 of the Model Law (as it has the force of law in Australia).
Note 1: The effect of prescribing an entity is that the Model Law does not apply to it.
Note 2: The regulations may prescribe the entity by reference to a class. See subsection 13(3) of the Legislation Act 2003.
10 Courts competent to perform functions under Model Law
10 Courts competent to perform functions under Model Law
The following courts are taken to be specified in Article 4 of the Model Law (as it has the force of law in Australia) as courts competent to perform the functions referred to in the Model Law relating to recognition of foreign proceedings and cooperation with foreign courts:
(a) if the functions relate to a proceeding involving a debtor who is an individual—the Federal Court of Australia;
(b) if the functions relate to a proceeding involving a debtor other than an individual:
(i) the Federal Court of Australia; and
(ii) the Supreme Court of a State or Territory.
Note: References in the Model Law to a court or the court are, because of this section, to be read as references to the Federal Court of Australia or the Supreme Court of a State or Territory.
11 Functions of the trustee (in bankruptcy proceedings) and the registered liquidator (in corporate insolvencies)
11 Functions of the trustee (in bankruptcy proceedings) and the registered liquidator (in corporate insolvencies)
The Model Law has the force of law in Australia as if the Model Law referred to whichever of the following is appropriate:
(a) the trustee (within the meaning of subsection 5(1) of the Bankruptcy Act 1966);
(b) a registered liquidator (within the meaning of section 9 of the Corporations Act 2001);
wherever the Model Law indicates that the title of the person or body administering a reorganization or liquidation under the law of the enacting State is to be inserted.
12 Access of foreign creditors to Australian insolvency proceedings
12 Access of foreign creditors to Australian insolvency proceedings
(1) For the purposes of Article 13 of the Model Law (as it has the force of law in Australia), the alternative wording set out in footnote 2 to the Model Law replaces paragraph 2 of that Article.
(2) For the purposes of the replacement paragraph, the claims of foreign creditors, other than those concerning tax and social security obligations, must not be ranked lower than the unsecured claims of other creditors solely because the creditor concerned is a foreign creditor.
13 Application for recognition of foreign proceeding
13 Application for recognition of foreign proceeding
In addition to the requirement in paragraph 3 of Article 15 of the Model Law (as it has the force of law in Australia) that an application for recognition be accompanied by a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative, the application must be accompanied by a statement identifying:
(a) all proceedings under the Bankruptcy Act 1966 in respect of the debtor; and
(b) any appointment of a receiver (within the meaning of section 416 of the Corporations Act 2001), or a controller or a managing controller (both within the meaning of section 9 of that Act), in relation to the property of the debtor; and
(c) all proceedings under Chapter 5 of the Corporations Act 2001, section 601CL of that Act or Schedule 2 to that Act, in respect of the debtor;
that are known to the foreign representative.
14 Subsequent information
14 Subsequent information
In addition to the requirement in subparagraph (b) of Article 18 of the Model Law (as it has the force of law in Australia) that the foreign representative inform the court promptly of any other foreign proceeding that becomes known to the foreign representative, the foreign representative must inform the court promptly of:
(a) any proceeding under the Bankruptcy Act 1966 regarding the same debtor; and
(b) any appointment of a receiver (within the meaning of section 416 of the Corporations Act 2001), or a controller or a managing controller (both within the meaning of section 9 of that Act), in relation to the property of the same debtor; and
(c) any proceeding under Chapter 5 of the Corporations Act 2001, section 601CL of that Act or Schedule 2 to that Act, regarding the same debtor;
that becomes known to the foreign representative.
15 Relief that may be granted upon application for recognition of a foreign proceeding
15 Relief that may be granted upon application for recognition of a foreign proceeding
To avoid doubt, no provisions are inserted or referred to in paragraph 2 of Article 19 of the Model Law (as it has the force of law in Australia).
16 Effects of recognition of a foreign main proceeding
16 Effects of recognition of a foreign main proceeding
For the purposes of paragraph 2 of Article 20 of the Model Law (as it has the force of law in Australia), the scope and the modification or termination of the stay or suspension referred to in paragraph 1 of that Article, are the same as would apply if the stay or suspension arose under:
(a) the Bankruptcy Act 1966; or
(b) Chapter 5 (other than Parts 5.2 and 5.4A) of the Corporations Act 2001;
as the case requires.
17 Actions to avoid acts detrimental to creditors
17 Actions to avoid acts detrimental to creditors
(1) The actions referred to for the purposes of paragraph 1 of Article 23 of the Model Law (as it has the force of law in Australia) are actions arising under or because of:
(a) section 120, 121, 121A, 122, 128B or 128C or Division 4A of Part VI of the Bankruptcy Act 1966; or
(b) Division 2 of Part 5.7B of the Corporations Act 2001.
(2) A provision referred to in paragraph (1)(a) or (b) applies, with appropriate changes, in relation to an action for the purposes of a foreign proceeding in the same way it would apply if the action were for the purposes of a proceeding in relation to:
(a) a bankrupt (within the meaning of subsection 5(1) of the Bankruptcy Act 1966); or
(b) a company (within the meaning of section 9 of the Corporations Act 2001);
as the case requires.
18 Forms of cooperation
18 Forms of cooperation
To avoid doubt, no additional forms or examples of cooperation are added by subparagraph (f) of Article 27 of the Model Law (as it has the force of law in Australia).
19 References to laws/law of this State and courts of this State
19 References to laws/law of this State and courts of this State
Laws/law of this State
(1) A reference in Article 7 of the Model Law (as it has the force of law in Australia) to laws of this State is a reference to the following laws:
(a) a law of the Commonwealth;
(b) a law of a State;
(c) a law of a Territory (other than an external Territory).
(2) A reference in Article 21 of the Model Law (as it has the force of law in Australia) to the laws of this State is a reference to a law of the Commonwealth.
(3) A reference in Articles 14, 21, 23, 28 and 29 of the Model Law (as it has the force of law in Australia) to the law of this State is a reference to a law of the Commonwealth.
(4) A reference in Article 24 of the Model Law (as it has the force of law in Australia) to the law of this State is a reference to the following laws:
(a) a law of the Commonwealth;
(b) a law of a State;
(c) a law of a Territory (other than an external Territory).
Courts of this State
(5) A reference in Article 10 of the Model Law (as it has the force of law in Australia) to the courts of this State is a reference to the following courts:
(a) a federal court;
(b) a court of a State;
(c) a court of a Territory (other than an external Territory).
Definition
(6) In this section:
external Territory does not include Norfolk Island, the Territory of Christmas Island or the Territory of the Cocos (Keeling) Islands.
20 Application
20 Application
(1) This Act applies to proceedings under:
(a) the Bankruptcy Act 1966; or
(b) Chapter 5 (other than Parts 5.2 and 5.4A) of the Corporations Act 2001, section 601CL of that Act and Schedule 2 to that Act;
commenced before, on or after the comm
This is an opening excerpt, not the complete document.