Traditional admiralty procedures of arrest and attachment are designed to protect the interests of creditors who have claims against ship operators who are often in other countries, and so not otherwise subject to the court’s jurisdiction. The need for this protection is more acute if the shipowner becomes insolvent. The creditors in admiralty do not need to participate in the foreign insolvency if they can get satisfaction of their claims from the arrested ship, an asset within the claimants’ jurisdiction. In contrast, the UNCITRAL Model Law on Cross-Border Insolvency embodies the concept of universalism, a key feature of cross-border insolvency. Countries that enact the Model Law undertake to stay proceedings if there are insolvency proceedings in a debtor’s Centre of Main Interests (COMI). There is no exception for admiralty proceedings in the Model Law, which means that it is directly inconsistent with the policy underlying traditional admiralty procedures. This presentation will explore how this clash between diametrically opposed policies has been resolved in various countries that have adopted the Model Law.
