Cross-Border Insolvency and the Discharge of Debts

Although the English literature on cross-border insolvency dates back almost two centuries, it is only during the last two decades that the subject has truly emerged from the shadows. The growing awareness of cross-border insolvency issues is no doubt closely bound to the increasing pace of globalization, although a number of spectacular collapses – often referred to as ‘mega-insolvencies' – have also been a factor. It is therefore of some interest to note that a small scene in the BCCI saga, surely one of the most notorious mega-insolvencies, was recently played out before the Privy Council. Wight v. Eckhardt Marine GmbH firstly explored the relationship between the debt owed to a creditor and the statutory trust that arises in English law when the court makes a winding-up order; and secondly, in relation to the private international law rule that the discharge of a debt is determined by the governing (proper) law, it examined the effect of a discharge in a situation where a creditor had already submitted a proof in the local liquidation prior to the discharge of the debt under the foreign governing law