Cross Border Insolvency

Cross border insolvency matters are generally addressed by universal and territorial approaches. Universal approach happens where all insolvency matters are dealt with in a single case. Creditors are treated as equal universally. No specific court jurisdiction is set to hear the matter. Territorial approach is the opposite. This approach which is also favourable by many academics tends to protect the interests of local creditors rather than creditors as a whole.
Currently, South Africa has no bilateral or multilateral cross-border insolvency treaty with any state or country .Common law particularly private international law applies.
It is in my opinion that Universal approach should be adopted in cases involving cross-border insolvency. The adoption of international instruments for example treaties and conventions to address these issues would allow speedy and convenient procedure. Costs involved in cross border litigation process are generally expensive; therefore adopting such instruments would be ideal to save such costs.
Moreover, an absolute adoption of the universal approach would be ideal to support a single or uniform sequestration/ liquidation procedure. In addition, foreign trustees should have jurisdiction in a foreign state without them having to apply to be recognised as such and his can only be achieved if the universal approach system is adopted.