Reconciling Insolvency Efficiency And Ecological Accountability: Towards An Environmentally Responsive Interpretation Of Article 6 Of The UNCITRAL Model Law On Cross-Border Insolvency
- IJLLR Journal
- Aug 15
- 1 min read
Updated: 4 days ago
Rudraksh Anand, Indian Institute of Corporate Affairs (IICA)
Saniya Mishra, Indian Institute of Corporate Affairs (IICA)
ABSTRACT
This paper explores the conflict between the ‘collective’ (efficiency) goals of cross-border insolvency law and the ‘protective’ (restorative) goals of environmental law and examines specifically Article 6 of the UNCITRAL Model Law on Cross-Border Insolvency, 1997. The public policy exception in Article 6 is generally understood as being a limited exception to be used sparingly to ensure international cooperation in the recognition of insolvency. However, with the environmental liability of multinational companies becoming more cross-border, a question is whether public policy grounds can be raised to challenge the discharge or compromise of environmental remediation obligations that are conducted in a foreign insolvency proceeding. Using a doctrinal and comparative approach, this paper reviews the ways in which Article 6, and its counterparts in other countries, have been interpreted by the courts in the United States, Canada, the United Kingdom, Australia and Singapore, and situates environmental norms like the polluter pays principle, sustainable development and intergenerational equity in the context of shifting understandings of public policy. It holds that environmental protection has become a norm of fundamental public policy, if not one that is now fully implementable, and suggests a framework for proportionality, according to which the recognition of rights might be denied or, at the very least, be denied at least in part where serious and irreversible environmental harm would otherwise remain uncorrected. The paper ends with judicial, legislative and institutional suggestions for reconciling efficiency of the insolvency regime with ecological responsibility.
Keywords: cross-border insolvency; UNCITRAL Model Law; Article 6; public policy exception; environmental law; polluter-pays principle; proportionality.
