Sharif Presentation by HC120730005330


									Integrating the Insolvency
 and Secured Transactions
Regimes: ADB’s Experience

         Presentation by
           Hamid Sharif
     Assistant General Counsel
           6 May 2008
• ADB was one of the first multilateral
  institutions to deal with an integrated
  approach to Secured Transactions and
  Insolvency Law Reforms
• Asian Financial Crisis
  −Highlighted various weaknesses in
   commercial law
  ADB’s Earlier Initiatives
• In 1998, ADB initiated regional technical
  assistance projects for
  −Secured Transactions Law Reform
   (RETA 5773) and
  −Insolvency Law Reform (RETA 5795)
• Output: Development of either regime
  should be accompanied by a
  corresponding development of the other
 ADB’s Earlier Initiatives
• Promoting Regional Cooperation in
  the Development of Insolvency Law
  (RETA 5975 )
  −Interaction between secured
   transactions and insolvency law
         Other Past Projects
Cambodia-designing a secured       Mongolia-development of the
transactions registry system       framework for secured
People’s Republic of China-State
enterprise insolvency reform       Nepal-insolvency and secured
                                   transactions reform
India–secured transactions
reform                             Sri Lanka-secured transactions
Indonesia-capacity building for
bankruptcy and secured             Thailand-training in business
transactions                       reorganization

Lao PDR-development and            Viet Nam-registration system
application of secured             for secured transactions
transactions and bankruptcy
Some Lessons Learned From
  Previous Law and Policy
      Reform Projects
• India–secured transactions reform
• Nepal–insolvency and secured
  transactions reform
• Thailand–bankruptcy law
• Viet Nam–secured transactions registry
          ADB Report
• Report published in April 2008
  −Need to have an integrated
  −Proposed a set of general
    Areas of Intersection
• Creation of a security interest
• Registration of the security
• Enforcement of the security
  −Possible source of tension
        Areas of Tension
• Application of the antecedent
  transactions avoidance provisions (i.e.,
  fraudulent transactions)
• Invalidation of an unregistered secured
  property interest
• Application of the priority payment rules
  to the proceeds of the secured property
  sale (i.e., tax and employees’
        General Principles
• Creation of a secured transaction
• Consequences of the opening of an insolvency
• Registration/perfection of a secured transaction
• Enforcement
• Possession, use, and dealings with secured
  property during stay against enforcement
• Limitation of the priority claims
      Ongoing Technical
      Assistance Projects
• Pakistan–strengthening secured transactions
  and insolvency regimes
• Viet Nam–expansion of secured transactions
  registry facility
• Lao PDR–promoting governance in financial
• Vanuatu–secured transactions reform
• Pacific Islands–diagnostic studies for secured
  transaction reforms in the Pacific region
         Moving Forward
• Choice to adopt general principles is with
  member countries
• Implementation of reform measures must be
• Future work may consider other factors–
  consumer credit, noncorporate business
  enterprises (incl. small and medium
  enterprises), and financial institutions.
• Results/Monitoring/Evaluation

    For more information: Hamid Sharif (
                   Web site:

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