The 21st century global business is being reshaped by a combination of resource pressures, shifting social values and ubiquitous technology, aimed at building businesses that cut across jurisdictions.
However, so many of these businesses may get entangled in unpaid debts, so much so that their liabilities outweigh their assets, leading to what could easily be referred to as “corporate insolvency”. The creditors may eventually resort to insolvency proceedings wherein orders of the court are secured to appoint an insolvency practitioner to take control of the insolvent company and sell or liquidate its assets to maximise the returns for creditors.
At the moment, there is no specific legislation in Nigeria for the recognition of foreign insolvency proceedings, orders, or judgments as well as for cooperation between domestic and foreign courts, coordination of concurrent proceedings or communication of information. Nigeria only has a limited framework for recognition and enforcement of an international monetary judgment, which must be final and conclusive, unchallenged on appeal and conditioned on reciprocity.
In line with this legal proposition, the United Nations Commission on International Trade Law developed the UNICTRAL Model Law on Cross-Border Insolvency to facilitate the adoption and implementation of a more unified cross-border insolvency regime. The procedure for the recognition and enforcement of final and conclusive cross-border insolvencies order or judgment duly obtained in courts of England, Scotland and Northern Ireland will be enforceable in Nigeria without retrial or examination of the merits of the case provided that it satisfies the requirements of and it is registered in accordance with Reciprocal Enforcement of Judgment Ordinance Cap 175 LFN & Lagos 1958.
There is the unanswered question of whether the order of a foreign court declaring a foreign corporation insolvent and appointing a liquidator or trustee is a judgment per se and having the attributes or qualification for registration in Nigeria under the Reciprocal Enforcement of Judgment Ordinance. Where such an order cannot be termed a judgment per se for purposes of the ordinance, the propriety of the process of enforcing such an order should then be called into question.
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