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4.5 Conclusion
Malaysia, New Zealand and Australia adopted English law as the basis of their
company/insolvency legislation. Initially, New Zealand and Australia inherited the
English law model due to necessity of trade, while Malaysia inherited it due to the
British administrative structures. Later, the law in each jurisdiction began to diverge,
searching for its own identity to reflect the needs and conditions of its society.
However, in the light of the introduction of the UNCITRAL Model Law on Cross-
Border Insolvency Law, a new trend of converging insolvency law to conform to the
said international insolvency has emerged. The model law attempts to assist States to
furnish their insolvency law with a modern, harmonized and fair framework to
address issues of cross-border insolvency. 263 It does not aim at a unification of
substantive insolvency but offers solutions for enforcing judgment in cases where
insolvent debtors have assets in more than one state or where creditors are not from
the state where the proceeding is taking place. Economic downturns and financial
crises often act as catalysts to legislative reforms in the area of company/insolvency
law. This can be seen from the Asian financial crisis which prompted many Asian
countries, as well as others like New Zealand, to review their legislation.
The crisis illustrated the importance of having regulatory and rehabilitation
frameworks in legislation. Having good corporate governance provisions is also
crucial in order to detect problems at an early stage. As such, the laissez faire
principle which was introduced at the beginning of company legislation was later
replaced by regulatory frameworks due to mismanagement or fraud.
263
United Nation Commission on International Trade Law, UNCITRAL Model Law on Cross-Border
Insolvency with Guide to Enactment (1997)
at 20 September
2010.
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