Cross-Border Insolvency Law in Korea

Abstract

Korea’s cross-border insolvency regime is founded on Chapter 5 of the DRBA, which adopted the UNCITRAL Model Law on Cross-Border Insolvency with few disparities. Chapter 5 shifted Korea’s cross-border regime from strict territorialism to moderate universalism by abolishing the territoriality rules under the former Bankruptcy Act and Corporate Reorganization Act and establishing new rules based on the principle of universality. Certain provisions of the Model Law have not been adopted for practical reasons unique in Korea. For instance, although not expressly adopted, Articles 3, 7, and 8 are generally by Korean court rulings, local statutes and public international law theories. Article 14 has not been implemented because there are some differences between the civil law system on which Korean law and the DRBA are grounded and the common law system regarding the service of documents. Article 23 of the Model Law has not been adopted because the law on transaction avoidance is complicated and remains unsettled in Korea.