The Insolvency Service has published a consultation on the implementation of two UNCITRAL "model laws" relating to insolvency: the Model Law on Recognition and Enforcement of Insolvency-Related Judgments (MLIJ), and the Model Law on Enterprise Group Insolvency (MLEG). The UK has already enacted legislation based on the Model Law on Cross-Border Insolvency, in the form of the Cross-Border Insolvency Regulations 2006 (CBIR). 

Although the CBIR enable a foreign representative to apply for recognition of proceedings in the UK, or for urgent interim relief if necessary to protect the assets of the debtor or interests of creditors, they do not provide a framework for recognition of foreign insolvency-related judgments in the UK. The proposed implementation of the MLIJ would clarify that it is possible for a UK court to recognise and enforce a judgment as part of the assistance available to foreign officeholders.

However, the government does not intend to implement the MLIJ in full. The proposals would ensure that recognition of foreign insolvency-related judgments would be at the court's discretion, and that the courts would continue to have regard to other UK law, notably the "rule in Gibbs" which established that an English law governed contract cannot be compromised or discharged by insolvency proceedings under a different law.

Meanwhile, implementation of the MLEG would provide a framework for international cooperation in relation to the insolvency of multinational groups. In particular this would enable the development and implementation of a coordinated group plan or "group insolvency solution", dealing with the business of the group as a whole and enabling a better result for creditors overall. It is proposed that the MLEG will be implemented in full.