TDM Special Issue "Comparative and International Perspectives on Mediation in Insolvency Matters: An Overview"
Article from: TDM 4 (2017), in Editorial
1. Introduction
As the culture of debt restructuring and debtor rehabilitation expands, the role of mediation in insolvency matters grows in significance. Although insolvency office-holders usually possess appropriate negotiation skills, specialized neutrals are engaged as mediators in insolvency cases in order to avoid delays and unnecessary costs. The US experience in the Lehman Brothers' insolvency[1] is a case in point in the international context, as a relevant number of investors´ claims have been solved taking advantage of alternative dispute mechanisms (ADR), including mediation.[2] Likewise, the success of the UK's schemes of arrangement in attracting foreign companies willing to restructure their business shows that means to avoid an expensive insolvency proceeding are urgently required.[3] Hence, the key question does not seem to be anymore whether mediation is suitable for tackling insolvency matters, but how to make it work.
This question can be framed in a more general and classic debate: the appropriateness of resorting to ADR instead of turning to the judiciary. While the former has significantly increased their figures across the world, many legal cultures are still reluctant to get their disputes solved out-of-court. However, heavy court dockets, extended time-frames and reduced state budgets are putting pressure in finding alternatives in contexts such as the European Union. The issuance of the EC Directive 2008/52 of 21 May 2008 on certain aspects of mediation in civil and commercial matters[4] is a good example of this trend. According to the Mediation Directive, mediation is defined as " ...a structured process, however named or referred to, whereby two or more parties to a dispute attempt by themselves, on a voluntary basis, to reach an agreement on a settlement of their dispute with the assistance of a mediator."[5] This definition is broad enough to cover insolvency matters as well,[6] and opens up the door to resort to this ADR method in both two-party and multiparty disputes.
With this general presentation, a Transnational Dispute Management (TDM) call for papers was launched in the first days of 2017. It aimed at analysing the current scenario, as well as new trends, developments, and challenges that mediation faces in the context of insolvency matters. The scope of the Special Issue was deliberately broad, willing to consider national and comparative law issues as well as international approaches connected with resorting to ADR methods in cases of business restructuration.
Likewise, the list of possible topics for submission to this Special Issue was extensive and multidisciplinary. It included, inter alia, the following ones: the role and scope of mediation in insolvency matters; the role of insolvency courts in the use of mediation by affected parties; the legal status of insolvency mediators, including professional qualifications, rights, duties and liability issues; mediation procedure, including commencement, timetable, choice and appointment of mediators; legal effects of mediation on prescription times, pending proceedings and agreements concluded through mediation; legal and non-legal reforms required to foster mediation in the national and international insolvency context; legal aspects of cross-border insolvencies (e.g., conflict-of-laws issues such as the law governing the mediation procedure or applicable to insolvency mediators, as well as the cross-border effects of mediation); and empirical studies dealing with the above-referred issues.
Responses to this TDM call for papers from both practice and academia have been very positive. We received a high number of well-grounded proposals from potential contributors from different regions and with varied professional backgrounds. After almost one year of close work with the selected authors and the outstanding TDM professionals, we are delighted to announce the publication of this TDM Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters", composed by fifteen legal contributions presented by twenty insolvency and ADR specialists. In the following three sections we provide an overview of their combined findings that, first, corroborate the global trend towards mediation in insolvency matters; second, provide some remarkable comparative perspectives on the topic at hand; and third, opened the discussion on the private international law issues that the interaction between mediation and insolvency uncovers.
All these articles form an interesting and well-rooted Special Issue, which encourages both the analysis of specific works that are of particular interest to readers, and also the global study of this monographic piece that outlines a very detailed picture of the present and future of the mediation and other ADR mechanisms in insolvency matters . This Special Issue draws the attention of the TDM readers regarding the abundant burning issues that arise in the legal intersection of mediation and insolvency, as well as it generates ties between the professionals who dedicate themselves to these issues, and opens new lines of investigation and debate.
2. Global Trend Towards Mediation in Insolvency Matters
Mediation may serve different purposes in the framework of insolvency. First, it may seek to solve a two-party dispute and avoid the complication and costs of resorting to litigation in an already over-complicated scenario. And second, multiparty mediation may help to avoid the insolvency, and thus it can operate in pre-insolvency situations to mediate between debtors and their creditors; but also after the opening of an insolvency proceeding in order to promote a refinancing, restructuring or liquidation plan among all the interested parties in the insolvency situation. While the multifaceted character of mediation is promoted by its voluntary nature, the insolvency framework makes it quasi-necessary some kind of legal or judicial intervention on account of the number of parties involved. The excellent overview of the US practice provided by Hon. Judge Allan Gropper[7] in this Special Issue of TDM illustrates not only the said multifaceted nature of mediation in insolvency matters, but also in particular the role that legislators and courts are meant to play in its promotion.
The reasons why mediation should be resorted to are also made clear by Hon. Judge Gropper by highlighting the savings in time and costs that comes with it, in addition to the increased chances of the debtor's recovery. The European Commission points out in this direction on its 2014 Recommendation on a New Approach to Business Failure and Insolvency.[8] However, the efficiency and effectiveness of mediation may be compromised by the relevant legal culture implementing it, as the national perspectives provided in this TDM issue show. While many EU and non-EU countries,[9] such as Belgium,[10] Greece, Italy, Portugal, Spain, United Kingdom,[11] and Australia, Japan, Singapore, respectively, have undertaken recent reforms in their insolvency laws to take mediation in, the success of these reforms is not granted. Moreover, many countries are not convinced by this approach. The latter has, for example, led to the European Commission to issue a Proposal for a Directive of the European Parliament and of the Council on preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedures and amending Directive 2012/30/EU, [12] on grounds of the lack of the said 2014 Recommendation's success in reaching a bottom-up harmonization in these matters across the European Union.[13]
Remarkably, both the 2014 European Commission Recommendation and the proposed Restructuring Directive - which have encountered heavy criticism[14] - specifically mention mediation as a mechanism to help in the business rescue endeavour. In particular, they introduce the role of a mediator[15] whose performance has already been so positively tested in the common law framework.[16] Lucilla Galanti[17] thoroughly examines in her paper included in this TDM Special Issue the steps given by the EU in order to promote mediation in insolvency matters. On account of its many advantages, in particular the flexibility of this ADR method, the general conclusion is that mediation is in line with the new EU approach to business failure and insolvency.[18]
Hence, resistance against mediation in insolvency matters is being slowly overcome. In this vein, mediation, in particular at the pre-insolvency stage, is encouraged by many international institutions as it can be read in the following instruments: the World Bank Principles for Effective Insolvency and Creditor Rights Systems,[19] the UNCITRAL Model Law on International Commercial Conciliation (2002),[20] the UNCITRAL Practice Guide on Cross-Border Insolvency Cooperation (2009).[21] and the OHADA Uniform Act on Bankruptcy Proceedings. [22] Stepping in, practitioners and academics follow along the lines as it can be learnt from actions taken by the Asian Development Bank,[23] INSOL Europe,[24] and the European Law Institute which has elaborated a Document on "Rescue of Business in Insolvency Law (2017)",[25] including some specific recommendations on mediation in insolvency matters.[26]
Successful or not, the survey undertaken in this TDM issue shows that mediation in insolvency matters is spreading across the globe in a steady manner. And the same applies to cross-border insolvencies as the Lehman Brothers' experience shows.[27] International insolvency cannot be exempted from the benefits of mediation as it is of great avail in avoiding complex litigation scenarios. Along these lines, Article 72 of Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (further, EIR Recast)[28] allocates mediating tasks to the coordinator of insolvency proceedings opened over debtor-companies belonging to the same group. This provision may be one of the first rules specifically mentioning mediation in cross-border insolvency matters, but more are to be expected given that the employment of mediation in domestic insolvencies will boost its use in an international framework .
3. Comparative Perspectives
In the light of this general trend towards making ADR methods another tool in a successful business restructuring and in providing a second chance to natural persons, many countries have undertaken legal reforms in order to promote these goals. Nina Paulova Mocheva & Angana Shah [29] provide in their TDM paper an overview that covers all the continents and takes into account the different moments in which mediation may be of help in (approaching) insolvency situations. Their comments remark the positive aspects of these national reforms, although many of them are still to be tested in practice. However, both authors are not oblivious to the problems attached to mediation, in particular the delays that it may cause if not adequately performed. Against this backdrop, the role of mediators appears to be essential to its success, as it can be learnt in other papers of this issue dealing with specific domestic reforms.
In general, the benefits of mediation in managing a debtor's insolvency are shared by all the authors engaged in this TDM issue. However, the analysis of their own legal systems may not be as positive as the general assessment, i.e. the expectations that mediation arises are not met in practice. Nevertheless, it is also true that many reforms are so recent that practice still needs time to be built. This is the case of Greece as explained by Eleftheria Papadimitriou , [30] and that of Japan as indicated by Shin-Ichiro Abe .[31] Italy has been experimenting with different approaches to pre-insolvency and insolvency arrangements that are tackled in a joint article of Paola Lucarelli & Ilaria Forestieri.[32] The same applies to Portugal as co-analysedAna Filipa Conceição & Cátia Marques Cebola,[33]and to Spain whose different mechanisms are presented to us in three papers written by Marta Flores,[34] Carmen Senés Motilla,[35] and Gemma García-Rostán Calvín & Salvador Tomás Tomás.[36]
Greece, Italy, Portugal and Spain have in common the fact that they belong to the orbit of the Mediation Directive and they pose interesting issues as to whether mediation in insolvency matters, and in particular the insolvency mediator, fit in the principles set out by the said Directive. In fact, many of the undertaken reforms to include mediation as a tool to deal with (pre-)insolvency situations put in question its voluntary nature;[37] i.e. it may be voluntary for the debtor, but not quite so for the creditors. As a matter of fact, the experience of the US shows that the mandatory feature may be essential to mediation success,[38] as the Lehman Brothers case again illustrates: while making the resort to ADR mandatory, a temporary litigation injunction was issued by the U.S. Bankruptcy Court for the Southern District of New York to secure this compulsory feature.[39]
Quasi-mandatory mediation is many times the price to be paid by procedures without insolvency office-holders and where a neutral third party between debtors in possession and their creditors may make a difference when it comes to reaching a way-out of the insolvency;[40] i.e. debtor and creditors have conflicting interests that need to be reconciled, and it may take a third party to convince them of this mutual benefit. Moreover, mediators may also provide much needed expertise in insolvency proceedings.
Against this backdrop, who can be a mediator and what their role is are questions that tend to get a different answer from that legally provided in mediating civil and commercial matters. Most reforms acknowledge the need for expertise in the insolvency or financial field with a view of being helpful in restructuring or providing entrepreneurs and consumers for a second chance. Accordingly, special listings of mediators may be established to get control of who can be appointed to this end.[41]
By the same token, the focus of many reforms is in helping the debtor to overcome their financial difficulties for which reason the impartial role of mediators could be compromised as it may appear legally portrayed as an aide of the debtor.[42] Their role is, nevertheless, more complex as it may vary depending on the type of insolvency proceedings.[43] While the discussion as to whether their role should be facilitative rather than evaluative is far from being closed, [44] a combination of both types of mediation seems to be required in insolvency matters.[45]
Confidentiality is usually named among the advantages of ADR-mechanisms over litigation. Mediation is not an exception and the fact of being multiparty does not change this feature. However, such a privilege may be subject to specific limits in the insolvency framework,[46] which should, nevertheless, be restrictively interpretated;[47] the confidentiality principle is of particular significance in the twilight period of pre-insolvency situations as it may make the difference between recovery and liquidation.
Finally , many EU member states have in common a legalistic culture reluctant to ADR-methods.[48] That may explain why legal reforms are not leading mediation to the success that they seem to have in other countries such as the USA and the UK. The problem is, however, not exclusive of civil law countries. In this vein, Christopher F. Symes & Jeffrey F. Fitzpatrick[49] seek for tools to further improve the Australian insolvency framework looking for inspiration in innovations incorporated by Singapore such as the use of time constraints in mediation procedures. Their analysis could be indeed generalized to other countries as they tackle one of the most significant problems of mediation in general and in insolvency matters, namely, that of aggravating the situation by being simply time-consuming.
Be that as it may, the economic situation of the insolvency debtor is, of course, a very relevant factor in the success of mediation schemes. The outstanding comparative study on personal debt mediation undertaken by Jason J. Kilborn[50] points in that direction at the same time as highlights the weaknesses of this type of methods. The key issue is whether the resorting to mediation is worthwhile in the light of the debtor's circumstances or simply a waste of time and resources. While Kilborn ventures in the terrain of offering a formula of success by combining expertise and economic figures, the solution may indeed come by the hand of an early detection of the insolvency situation.[51] The latter is far from being an easy question for which reason the paper of Giovanni Matteucci[52] is of particular interest to the extent that he provides us with some useful ideas as to how to proceed, primarily for detecting financial distress experienced by medium and small enterprises.
4. Private International Law Perspectives
Cross-border (pre-)insolvencies are not excluded from the benefits of mediation, rather the opposite. Against an international backdrop, mediation agreements and procedures can be useful to tackle individual and collective transnational disputes arisen either before the opening of, or within, formal insolvency proceedings. However, the transnational nature of these cases poses conflict-of-laws issues that have so far remained unaddressed; while the contractual nature of mediation provides some answers to these questions,[53] the insolvency framework requires further examination.
This analysis must go beyond those cases in which mediation is used to manage the insolvency situation, i.e. including the handling of mediation agreements concluded for the resolution of individual contractual disputes before the opening of insolvency proceedings. The effects of the latter on such clauses and on the already pending mediation procedures at the opening of insolvency proceedings are to be examined in accordance with the relevant cross-border insolvency model. Nowadays, the most widespread is the so called modified universalism[54] enshrined in the UNCITRAL Model Law on Cross-Border Insolvency [55] and in the EIR Recast. The contributions to this TDM Special Issue focus on this approach to international insolvency.
Manuel Penadés Fons [56] examines in his TDM paper the way in which modified universalism, as applied by the Spanish Insolvency Act,[57] manages to provide effects to mediation agreements and procedures located abroad. The findings of this paper are remarkable in that this topic has not been previously researched despite existing rules on the effects of insolvency proceedings on arbitration agreements and procedures.[58] Mediation and arbitration are, of course, very different, but the recent focus on mediation should have moved lawmakers to take it into account while providing rules on the effects of insolvency proceedings on arbitration clauses and procedures.
As seen in the previous section, many countries are turning towards mediated solutions to avoid insolvency situations. However, the success of the available toolkits greatly varies from one country to the other, and this may promote forum shopping. Mojtaba Asgharian[59] illustrates this point in his contribution to this TDM issue by researching the law applicable to whether mediation is allowed in insolvency matters. As a matter of fact, his paper focuses on a significant number of conflict-of-laws issues which show how mediation and insolvency matters are intertwined. Hence, private international law needs to focus on both prongs of this puzzle in order to provide some meaningful answers as Asgharian argues.
Against this backdrop, multiparty mediation is particularly troublesome as it does not necessarily involve the general body of creditors. In cross-border cases, creditors and assets are located in different countries what raises the issue of the cross-border effects of a mediation agreement such as a workout plan. If the selected country to pursue mediation holds the commitments made in the course of mediation enforceable, they can be recognized abroad following the usual means of recognition and enforcement of mediation agreements. However, mediation in insolvency matters is more ambitious as it may seek to bind a whole class of creditors, even those not participating in the pre-insolvency mediation procedure. The recognition of this binding effect abroad may be key to the business rescue and thus to the mediation's success because, if not feasible, it would create hold-out creditors and not prevent the opening of formal insolvency proceedings over the one and same debtor in other jurisdictions.
In the light of this collective feature of pre-insolvency mediation procedures, international insolvency may provide the framework to run and enforce them. Accordingly, the international jurisdiction, conflict-of-laws, and recognition and enforcement rules on insolvency matters should be applicable. If the UNCITRAL Model Law on Cross-Border Insolvencies or the EIR Recast is followed, the relevant jurisdiction to mediate a business rescue would be that of the debtor's main centre of interests, the so-called COMI,[60] and the law applicable to mediation would be the lex fori concursus. The latter would govern whether a collective stay may be granted during the negotiations in order to prevent the commencement of individual enforcement proceedings, whether financial arrangements concluded at this point are protected from transactional avoidance, and whether and under which conditions the final agreement may be imposed on non-participant creditors.
This approach encounters, nevertheless, a characterization problem, i.e. that of whether this type of mediation procedures are insolvency proceedings or not. Remarkably, the scope of the EIR Recast has been broadened to encompass pre-insolvency and hybrid proceedings in view of their growing significance.[61] In order to avoid discussion as to whether a national proceeding fits this definition or not, [62] all proceedings included in the EIR Recast are listed in its Annex A,[63] including some specifically resorting to mediation such the Belgian règlement collectif de dettes or the Spanish acuerdo extrajudicial de pagos.[64] Accordingly, the latter are submitted to the private international law rules of the EIR Recast, and the workout plan can be recognized and enforced in another EU Member State in accordance with the means therein provided.
Beyond this framework, the abovementioned characterization issue remains. Annex A of the EIR Recast does not include all procedures in which mediation may be resorted to in order to avoid insolvency. A case in point is that of the British schemes of arrangement (SoAs).[65] Recital 16 of the EIR Recast bases their exclusion from its scope on the fact that SoAs are based on general company law and thus they are not exclusively designed for insolvency situations. From a practical viewpoint, the exclusion lies in the success of this procedure which has been resorted to by a significant number of companies whose COMI is not in the UK. This has been feasible because UK courts have constructed their jurisdiction on SoAs in a broad manner meaning that, although a significant connection to the UK must be proved, the submission to English law of the claims to be restructured has been understood as such close link.[66] In contrast, should the EIR Recast and the COMI rule apply to SoAs, such companies would not be admitted to the British jurisdiction and SoAs' vis attractiva of foreign companies be significantly limited. [67]
Hence, the flexibility of ADR methods seems to encourage leaving them outside of the international insolvency framework. However, the problem remains in those cases in which it is important to secure the binding effect on non-participating creditors abroad. The alternative of British SoAs and similar mediation procedures to not being considered insolvency matters is to be treated as civil and commercial matters; thereby the general rules on recognition and enforcement of foreign judicial transactions should be applied.
This approach does not lack, however, problems because these procedures are collective composition proceedings. This issue has already been highlighted in the framework of Regulation (UE) 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters,[68] by dealing with the question of how to approach SoAs taking into account their controversial adversarial nature: to the extent that SoAs seek for composition, the difficulties arise at the time of establishing a head of jurisdiction to pursue mediation because it is not clear who is the defendant or the obligation on which the lawsuit is based.[69] Choice-of-forum clauses could help but their conclusion in creditor SoAs has been held as unlikely.[70] Should these procedures not be deemed as contentious, their recognition would proceed via their characterization as public documents or judicial transactions, thereby there would not be binding effect as regards to third parties.
Finally, it has been also contended that the adequate means to recognize SoAs abroad is via conflict rules. More specifically, they should be included in the conflict rules dealing with contractual matters, such as the Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I).[71] The limitations attached to this approach is that the binding effects on third parties abroad would only be granted if the law governing the contracts [72] between a company and its creditors is English law.[73]
All in all, the multifaceted nature of mediation in insolvency matters poses interesting and not-resolved-yet private international law issues. This is primarily due to the fact that it is quite a novelty in cross-border practice for which reason the contributions to this TDM issue are more valuable on grounds of stepping into uncharted territory.
5. Final Remarks and Acknowledgments
Concluding the presentation of this Special Issue, both co-editors of this Special Issue are members of the Spanish Research Project DER2016-80568-R "Libertad de mercado y sobreendeudamiento de consumidores: estrategias jurídico-económicas para garantizar una segunda oportunidad" ( Market Freedom and Overindebtedness of Consumers: legal and economic strategies to secure a second chance) . From the scientific perspective of the referred project, profiling and following the development of this Special Issue has been an especially rewarding task.
We also would like to thank all the contributing authors. Their expertise, perseverance and self-improvement are reflected in the letter and spirit of this Special Issue. We also take this opportunity to thank the generous support from the TDM publishing and editorial teams. Last but not least, we hope that the reading of this Special Issue awakens new vocations in the world of Insolvency & ADR and consolidates the existing ones. The best legal professionals are needed to give the efficient answers to the stakeholders involved in these highly crucial legal areas.
[1] There have been many other big companies filing for bankruptcy in US after the Lehmann Brothers´ case, including Residential Capital LLC, Cengage Learning Inc., Nortel Networks, Radio Shack and Energy Future Holdings Corp.
[2] Settlements of this type are still being forged today within the framework of the Lehman Brother´s bankruptcy. See for instance, http://www.lbhirmbssettlement.com/transferor_loan_settlement_agreement.php.
[3] See Jennifer Payne, "Cross-border Schemes of Arrangement and Forum Shopping" (2013) 14(4) European Business Organization Law Review 563-589, also available at SSRN: University of Oxford Legal Research Paper Series < http://ssrn.com/abstract=2277451 >.
[4][2008] OJ L 136/3.
[5] See Article 2 of EC Directive 2008/52 of 21 May 2008 on certain aspects of mediation in civil and commercial matters.
[6] See in this TDM Special Issue Lucilla Galanti, "The Role of Mediation in the New EU Approach to Insolvency", in Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters", at 13.
[7] Allan L. Gropper, "The Mediation of Bankruptcy Disputes in the United States", in Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters" .
[8] "Commission Staff Working Document Impact Assessment accompanying the document Commission Recommendation on a New Approach to Business Failure and Insolvency", C(2014) 1500 final, SWD (2014) 62 final, Brussels, March 12, 2014, available at http://ec.europa.eu/justice/civil/files/swd_2014_61_en.pdf.
[9] For the legal framework of the countries mentioned in text without a specific reference, see the papers included in this TDM Special Issue.
[10] See Section 13 of the Act on Continuity of Companies, available at http://www.staatsbladclip.be/staatsblad/wetten/2009/02/09/wet-2009009047.html.
[11] See Article 18(2) of the Chancery Court Guide 2016, available at https://www.judiciary.gov.uk/wp-content/uploads/2016/02/chancery-guide-feb-2016.pdf.
[12] See (COM)(2016) 723 final. The Restructuring Directive Proposal and other related documents are available at
[13] See Directorate-General Justice & Consumers of the European Commission, "Evaluation of the implementation of the Commission Recommendation of 12.3.2014 on a new approach to business failure and insolvency", 30 September 2015. Further, see Gerard McCormack & Andrew Keay, and Sarah Brown, European Insolvency Law reform and harmonization (Edward Elgar, Cheltenham, 2017).
[14] See critical, Horst Eidenmüller, "Contracting for a European Insolvency Regime" (January 2017) University of Oxford and ECGI, Law Working Paper No 341/2017, available at SSRN:
[15] See Recital 17 and Section II B of the 2014 European Commission Recommendation, and Recital 18 and Article 5 of the Restructuring Directive Proposal. Along with mediators, the role of supervisor is also introduced. The latter is nevertheless an exceptional position thought for those cases in which it is necessary to monitor the actions of debtor and the other involved parties. See 2014 European Commission Recommendation, at 32.
[16] See Gropper, supranote 7.
[17] See supra note 6.
[18] See Galanti, see supranote 6, at 8-9.
[19] See World Bank Principles for Effective Insolvency and Creditor Rights Systems as revised in 2015, Principle B, available at
[20] See in particular, Guide to Enactment and Use of the UNCITRAL Model Law 2002, para. 39 and 40.
[21] UNCITRAL Practice Guide (2009), para. 68, 72, 149.
[22] See Article 1-2 of OHADA Uniform Act on Bankruptcy Proceedings (2015).
[23] See Asian Development Bank, Promoting regional cooperation in the development of insolvency law reforms, RETA 5975 Final Report 2 (2008), cited by Bob Wessels, Hon. Bruce A Markell, Jason Kilborn, International Cooperation in Bankruptcy and Insolvency Matters (OUP, New York, 2009) at 194.
[24] See Statement of Principles for a Global Approach to Multi-Creditor Workouts (INSOL) released on 18 April 2017, Principle IV. In addition to this, INSOL Europe provides for a list of expert mediators.
[25] R eleased the 6 September 2017, this Instrument of the European Law Institute has been written by Bob Wessels and Stephan Madaus with the assistance of Gert-Jan Boon. The working group was established in 2013 including as many as 15 EU Member States. Available at SSRN: https://ssrn.com/abstract=3032309
[26] See Restructuring Directive Proposal and Recommendations 1:07 to 1:09 of Rescue of Business in Insolvency Law (2017), Instrument of the European Law Institute, see supra note 25.
[27] Addressing this topic in detail, see Michael J. Fleming and Asani Sarkar, "The Failure Resolution of Lehman Brothers", https://www.newyorkfed.org/medialibrary/media/research/epr/2014/1412flem.pdf .
[28] O J [2015] L 141/19. This Regulation recasts Council Regulation (EC) 1346/2000 of 29 May 2000 on insolvency proceedings, OJ [2000] L 160/1.
[29] Nina Paulova Mocheva and Angana Shah, "Mediation in the Context of (Approaching) Insolvency: A Review on the Upswing Globally", in Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters".
[30] Eleftheria Papadimitriou, " Mediation in Formal and Informal Insolvency: A Greek Perspective", in Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters" .
[31] Shin-Ichiro Abe, "The Role of Mediation in Japanese Insolvency Practice", in Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters" .
[32] Paola Lucarelli and Ilaria Forestieri, "The Three Targets of Insolvency Mediation: Dispute Resolution, Agreement Facilitation, Corporate Distress Management", in Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters".
[33] Ana Filipa Conceição, Cátia Marques Cebola, " Mediation as A Path to Business Restructuring - Contributions to the Portuguese Insolvency Framework", in Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters" .
[34] Marta Flores, "The Role of Mediation in Refinancing Groups of Companies: The Case of Spain", in Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters" .
[35] Carmen Senés Motilla, "The Insolvency Mediation in the Spanish Law", in Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters" .
[36] Gemma García-Rostán and Salvador Tomás Tomás, "Out of Court Payment Agreement. A Sui Generis Mediation in Insolvency Matters in Spain", in Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters".
[37] Id., at 6.
[38] Gropper, see supranote 7, at 8-9.
[39] As reported by Barbara Palin in 16th Annual Global Insolvency and Restructuring Conference held in Hamburg in May 2010 whose proceedings have been summarized in "Mediation and insolvency", 1 October 2010, available at https://www.cedr.com/articles/?item=Mediation-and-insolvency ; Referring to the Order issued by the bankruptcy court on June 24, 2014 and establishing ADR Procedures, see the memorandum decision denying motion to dismiss issued by the bankruptcy judge Shelley C Chapman on May 7 2015, http://www.nysb.uscourts.gov/sites/default/files/opinions/253823_31_opinion.pdf.
[40] Although not portrayed as mandatory, the door is opened to court-designation in article 5 of the Restructuring Directive Proposal. See further Galanti, supra note 6, at 10-11.
[41] See Conceição and Cebola, see supra note 33, at 8; Papadimitriou, see supra note 30, at 9; Senés, see supranote 35, at 3. But not always as can be read in Abe, see supra note 31, at 5, indicating that Japanese court relies on expertise, but there are not specific lists.
[42] See article 9 of the 2014 European Commission Recommendation and article 2 of the Restructuring Directive Proposal. Critical to this Portuguese mediation's feature, see Conceição and Cebola, see supra note 33, at 13.
[43] Paradoxically, mediation has been considered necessary in low-cost insolvencies in Spain, but not in those involving significant estates. Making the point of a change of gear being necessary, see Flores, see supra note 34.
[44] See Mocheva and Shah, seesupra note 28. Considering it to be facilitative, see Galanti, see supranote 6, at 10; Papadimitriou, see supra note 30, at 6. Pointing to their evaluative role in the Portuguese system, see Conceição and Cebola, supranote 33, at 8, 12-13; and in the Spanish system, see Senés, supra note 35, at 4 .
[45] As rightly pointed out by Gropper, see supra note 7, at 12-13, and Lucarelli and Forestieri, see supra note 32, at 17 . This usually translates in mediators' entitlement to make plan proposals in specific circumstances. See for example, the case of Japan in Abe, see supra note 31, at 5.
[46] See Conceição and Cebola, see supra note 33, at 15-16; Gropper, see supra note 7, at 10-12; Senés, see supra note 35, at 4.
[47] See García-Rostán and Tomás, see supra note 36, at 12-13.
[48] See Conceição and Cebola, see supra note 33; Lucarelli and Forestieri, see supra note 32, at 4-6.
[49] Christopher F Symes, Jeffrey F Fitzpatrick, "A deliberation on adapting aspects of Singapore's mediation initiatives within the Australian Federal Court's practice to further improve the liquidators' recovery of assets" , Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters" .
[50] Jason J. Kilborn, "Determinants of Failure ... and Success in Personal Debt Mediation", Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters" .
[51] See Recommendation 1:21 of the Rescue of Business in Insolvency Law (2017), Instrument of the European Law Institute, see supra note 25.
[52] Giovanni Matteucci, "Non-Performing Loans Prevention in Italy: Early Warning Indicator and Negotiation - Mediation in Bankruptcy", Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters" .
[53] See for example, Patricia Orejudo Prieto de los Mozos, "The law applicable to international mediation contracts", InDret 1/2011, available at www.indret.com , dealing with the provision of mediation services in transnational cases.
[54] This cross-border insolvency model is built upon the principles of universality and pluralism, i.e. it combines an only insolvency proceeding with universal effects to be opened at the debtor's main center of interests with insolvency proceedings with territorial effects that can only be opened at the debtor's establishment. In order to overcome this paradox, cooperation obligations among all proceedings over the one and same debtor are established. See further J. L. Westbrook, "Theory and Pragmatism in Global Insolvencies: Choice of Law and Choice of Forum" (1991) 65 American Bankruptcy Law Journal 457, 458.
[55] UNCITRAL Model Law on Cross-Border Insolvency, as recommended by the General Assembly of United Nations by Resolution 52/158 of 15 December 1997.
[56] Manuel Penadés Fons, "The Effect of Insolvency on International Mediation - The European and Spanish Perspectives", Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters" .
[57] The EIR Recast applies in Spain, but only when the debtor's COMI is in a EU Member State. Otherwise, the Spanish Act 22/2003, of 9 July, on Insolvency applies. The latter is supplementary to the EIR Recast's provisions in many aspects.
[58] See Article 18 of the EIR Recast as amended in order to take into account arbitration procedures.
[59] Mojtaba Asgharian, "Choice of Law aspects of Mediation in Cross-Border Insolvencies within the European Legal Framework", in Laura Carballo Piñeiro and Katia Fach Gómez (eds.), TDM 4 (2017) Special Issue on "Comparative and International Perspectives on Mediation in Insolvency Matters" .
[60] See Article 3 of EIR Recast.
[61] See Article 1 of EIR Recast.
[62] See Article 1(1) in fine of EIR Recast. See also Article 2(1) thereof.
[63] See Article 1(1) and 2(4) of the EIR Recast.
[64] On this procedure see on this TDM issue, García-Rostán and Tomás, see supra note 36; Senés,see supra note 35.
[65] See Part 26 of the Companies Act 2006. Schemes of arrangement are collective composition proceedings that do not necessarily involve all the creditors and do not require the appointment of an insolvency practitioner.
[66] See further Jennifer Marshall, Joel Ferguson & Lucy Aconley, "Brexit: what next for cross-border restructurings and insolvencies?" (2016) 4 Corporate Rescue and Insolvency 149, at 150.
[67] See Gerard McCormack, "Reforming the European Insolvency Regulation: A Legal and Policy Perspective" (2014) 10(1) Journal of Private International Law 41, 47 et seq.
[68] O J [2012] L 351/1
[69] See Payne, see supranote 3, at 19-20. In this regard, Robert Freitag & Stephan Korch, "Gedanken zum Brexit - Mögliche Auswirkungen im Internationalen Insolvenzrecht" (2016) Zeitschrift für Wirtschaftsrecht 1849, at 1854-1856, highlight the similarities between schemes of arrangement and collective actions. However, schemes are even more problematic as it is not clear which position the class has, that of claimant or defendant. In general, it is assumed that the 'person being sued' is the scheme creditors which makes even more complicated the establishment of jurisdiction.
[70] See Marshall, Ferguson and Aconley, see supra note 66, at 151, who also indicate that schemes of arrangement may be included within the scope of The Hague Convention on Choice of Court Agreements 2005.
[71] Although it excludes from its material scope of application questions governed by the law of companies and other bodies that does not refer to schemes of arrangement. See Payne, see supra note 3.
[72] Multiparty mediation may end up in multiparty contracts. See Rescue of Business in Insolvency Law (2017), Instrument of the European Law Institute, see supra note 25 .
[73] Making this point Marshall, Ferguson and Aconley, see supra note 66, at 151