City Research Online

Abstract

In most jurisdictions the court plays a central role in providing stakeholder protection in insolvency and debt restructuring regimes through legislation that affords such protection. Although there are many advantages to debt restructuring through contractual means, court intervention is usually needed to regulate and deal with difficulties that can arise such as the imposition of restructuring plans on dissenting creditors and wealth transfers between creditors. However, the role of the court in mitigating these concerns in both developed and developing jurisdictions has sometimes been overlooked or misunderstood.
While there exist specialist bankruptcy and insolvency courts in developed economies, such as in the United States of America (US) and in the United Kingdom (UK) that govern bankruptcy proceedings, insolvency proceedings in most developing economies, especially in Sub-Saharan Africa are presided over by general non-insolvency specialist judges who do not tend to be required to decide upon redistributive matters during insolvency proceedings. Although they can still be called upon to interpret the law when there are disputes and contentious issue during insolvency proceedings, there remains a high level of contrasting views on what exactly, the role of the court should or ought to be in insolvency proceedings in these developing economies, owing to differing theoretical perspectives.
In this article, an analysis of the role of the court in bankruptcy proceedings in developing economies through a theoretical lens is undertaken. The article analyses contentious theoretical ideals, such as judicial discretion and rationality and how these have impacted the court’s role in the bankruptcy field. The position in developing economies is comparatively analysed in light of the position in the UK and the USA as developed jurisdictions to inform context. This is in addition to setting an agenda for a better approach to designing an efficient insolvency system that takes the role of the court as a central in insolvency proceedings.

Publication Type:	Article
Additional Information:	This is a pre-copyedited, author-produced version of an article accepted for publication in International Company and Commercial Law Review following peer review. The definitive published version Nsubuga, H. J. (2023). The Role of the Court in Balancing Stakeholder interests in insolvency in Developing Economies - the Theoretical conundrum. International Company and Commercial Law Review, 34(10), pp. 559-571 is available online on Westlaw UK.
Publisher Keywords:	Africa; Courts; Developing countries; Insolvency proceedings; Stakeholders
Subjects:	K Law > K Law (General)
Departments:	The City Law School > Academic Programmes

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