EBRD Insolvency Office Holder Principles

Since its creation in 1991, the EBRD has worked to assist its countries of operations in their transition to market economies. It has long been understood that an essential component for the development of a market economy, particularly in early transition countries, is the presence of sufficient investment. Essential to the attraction of investment is a sound insolvency system.

The EBRD regularly conducts assessments and surveys to measure the extensiveness and effectiveness of insolvency laws in its countries of operations. These laws are measured not against arbitrary or abstract principles but, rather, against international standards and best practices as articulated by, among other things, the UNCITRAL Legislative Guide on Insolvency Law and the World Bank’s Principles and Guidelines for Effective Insolvency and Creditor Rights Systems. The EBRD fully appreciates that the nature and content of insolvency laws will vary from jurisdiction to jurisdiction and must in fact do so to accommodate the rich variety of legal traditions across its countries of operation. Nevertheless, these laws need to comply with the core principles of international standards and best practices as it is international standards that external actors are most likely to apply when determining whether or not to invest in a given country.

This need led the EBRD to define a set of 10 Core Principles for an Insolvency Law Regime.

Recognising that a solid law is not enough for an effective insolvency system, the EBRD has endeavoured to build on these core principles and focus on the effectiveness of insolvency system by identifying a set of principles to guide countries in setting standards for the qualifications, appointment conduct, supervision, and regulation of office holders (“Office holders” are the trustees, administrators, liquidators, insolvency representatives, or similar functionaries who make many insolvency systems work.) in insolvency cases – the EBRD Insolvency Office Holder Principles  (0.1Mb).

These principles  (0.3Mb) are relevant to an insolvency law regime that provides for the appointment of an office holder to administer the assets and affairs of a debtor upon the opening or commencement of an insolvency case in respect of the debtor. They are not intended to be exhaustive; rather, they identify issues which should be addressed within an insolvency legal regime which provides for such office holders. These principles are meant as guidelines only. Invariably, exceptions to these principles may have to be made in the context of a given country’s legal system.