Cross-border insolvencies have become a growing area of concern for creditors, debtors and insolvency practitioners. Lauren Hartigan-Pritchard, Partner and Head of Restructuring and Insolvency at Higgs LLP, explains how foreign insolvencies are recognised in England and Wales.

Are cross-border insolvencies recognised in England and Wales?

Since Brexit, cross-border insolvencies have become a growing area of concern for creditors, debtors and insolvency practitioners.

Before Brexit, insolvency proceedings between EU member states were automatically recognised under Regulation (EU) 2015/848 (the Recast Insolvency Regulation). That ceased to apply after 31 December 2020, except for cases opened before that date.

Recognition is now determined by legal frameworks and common-law principles that allow English and Welsh courts to recognise insolvency proceedings from other countries. However, how these rules apply in practice is not always straightforward.

What does recognition mean?

Recognition of a foreign insolvency means that a court in England & Wales agrees to give effect to a foreign insolvency order as if it were valid under UK law. In short, it allows foreign insolvency officeholders to access the UK courts and deal with assets or claims here.

To make sure creditors are treated fairly, English courts try to cooperate with courts abroad. They do this through:

1. The Cross-Border Insolvency Regulations 2006 (CBIR) – implementing the UN Model Law on Cross-Border Insolvency.
2. Section 426 of the Insolvency Act 1986 – allowing assistance to certain designated countries and territories.
3. English common law – applying long-standing principles of fairness and cooperation.

CBIR

CBIR brings the UN Model Law into UK insolvency law. Its aim is to provide a consistent approach between countries, helping courts protect creditors and maximise returns on a debtor’s assets.

A foreign representative (such as a liquidator or trustee) must apply to the High Court for recognition. CBIR only covers collective proceedings (those brought for the benefit of all creditors). If granted, recognition allows that representative to start or take part in proceedings in England & Wales without going through diplomatic channels.

There are two types of recognised proceedings:

1. Foreign main proceedings – These take place in the debtor’s centre of main interests (COMI), usually its registered office or an individual’s home address. Recognition automatically stays creditor action and asset transfers, and the court can grant further relief to protect assets.
2. Foreign non-main proceeding – These take place where the debtor has an establishment carrying on economic activity. The court may grant discretionary relief if it protects creditors’ interests.

Section 426 of the Insolvency Act 1986

Section 426 allows courts in “relevant countries or territories” to ask the courts of England and Wales for assistance. These include, among others:

• Australia
• Canada
• Hong Kong
• Ireland
• South Africa
• Cayman Islands

The English courts may apply either UK insolvency law or that of the requesting country. It can make orders such as injunctions, declarations, or administration orders to support the foreign proceedings. However, Section 426 cannot be used to enforce a foreign judgment directly.

Common law

Even where no statute applies, English courts can still recognise and assist foreign insolvency proceedings under common-law principles of modified universalism and comity. 

Modified universalism means that, ideally, there should be one insolvency process for all creditors wherever they are located. However, in Rubin v Eurofinance SA; New Cap Reinsurance Corp v Grant [2012] UKSC 46 the Supreme Court ruled that this principle cannot override established UK law or be used to enforce foreign judgments made without jurisdiction.

Courts will still aim, under the principle of comity, to assist foreign office-holders “as far as possible”.

What are the limitations and challenges of cross-border insolvency?

The main limitations and challenges of cross-border insolvencies in England and Wales include:

1. CBIR does not allow enforcement of foreign judgments, making recognition difficult.
2. Section 426 only applies to a limited list of jurisdictions (not the USA, for example).
3. The differences in how courts interpret and apply CBIR can create uncertainty.
4. Recognition proceedings can be complex, time-consuming and expensive.

Summary

England and Wales continues to offer a strong and respected system for recognising foreign insolvencies. However, since Brexit, the framework relies more heavily on discretionary judicial cooperation through CBIR and common law. Practitioners must therefore balance the benefits of cross-border cooperation with the procedural limits and costs involved.

About the author

Lauren Hartigan-Pritchard is a Partner and Head of Restructuring and Insolvency at Higgs LLP. She advises on all aspects of corporate restructuring and corporate and personal insolvency work, and regularly deals with administrations, compulsory and voluntary liquidations, bankruptcy and voluntary arrangements.

See also

Place an insolvency notice

The meaning of 'creditor' in insolvency proceedings

Are appetites for members' voluntary liquidations changing?

Who is liable to contribute to a company's insolvency?

Find out more

The Cross-Border Insolvency Regulations 2006 (Legislation)

Insolvency Act 1986 (Legislation)

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Publication date

3 November 2025

Any opinion expressed in this article is that of the author and the author alone, and does not necessarily represent that of The Gazette.