Australian Year Book of International Law
It is an obvious problem. People and organisations are interacting internationally, yet each country has its own unique laws. The real and potential conflict between these two facts is particularly apparent in the pragmatic world of private commercial actors. The chief proposition for addressing this situation is equally simple. If there was only one law – say a world law – then there would be no conflict and all cross-border transactions would flow that much more smoothly. The problem is as old as the nation-state system and this standard answer is of the same vintage.
The more difficult practical question, however, is how to achieve standard law in a global system that is based on state sovereignty and still celebrates differences. Harmonisers have thought up an infinite number of ways to achieve this standard law, but generally these ideas fall into one of five approaches. First is the ‘Global Hard Law Approach’ taken by much of public international law, which generally requires a multilateral convention or an international regulator such as the World Trade Organization (WTO). Second is the ‘Limited Hard Law Approach’ used by regionalists and uniformers that seeks to achieve the same things as global hard law but among a smaller, limited group of states whose similarities make their differences easier to overcome, for example the European Union (EU). Third is the ‘Conflicts Hard/Soft Law Approach’ whereby each country maintains its unique domestic substantive law but adopts a uniform conflict of laws standard that allows problems to be consistently resolved among states. This is what the Hague Conference is currently attempting with its draft Convention on International Jurisdiction and Foreign Judgments in Civil and Commercial Matters and the EU has achieved for civil law with its Brussels Regulation. Fourth is the ‘Principles Soft Law Approach’ which seeks to achieve uniformity by using restatements or principles to point out where conformity already exists and, where it does not, to suggest the best alternative. This approach relies on the intrinsic value of its project and is exemplified by the International Chamber of Commerce’s (ICC) Incoterms.
Finally, the ‘Model Soft Law Approach’ has developed as an alternative whereby a country may adopt a standard law drafted by international experts but may also incorporate minor differences to address unique domestic concerns. The Model Soft Law Approach is particularly attractive in substantive areas where domestic public policy concerns often defeat hard law uniformity and in countries that lack modern legislation covering the substantive topics. As a result, it is the preferred method for many commercial law advisers to new and developing economies such as in Eastern Europe and South East Asia and the Pacific.
One of the most recent examples of the Model Soft Law Approach is the UNCITRAL Model Law on Cross-Border Insolvency (Model Law). Adopted in 1997 by the United Nations Commission on International Trade Law (UNCITRAL), the Model Law promised harmony in the area of international insolvency law. Cross-border insolvency was an ideal subject for the Model Soft Law Approach. This is because due to the domestic public policy concerns directly and indirectly raised by economic failure, all other approaches had proven fruitless in 700 years of attempts. Further, the timing for the Model Law was right as the Eastern European countries were seeking to create new market-oriented commercial laws, and many Asian and Pacific countries were having to update their commercial rules in light of the Asian Crisis. Six years after the Model Law’s completion, however, only four countries (Eritrea, Mexico, Montenegro and South Africa) have adopted the Model and not one of them is an economic powerhouse or even from Eastern Europe or the Asia-Pacific. On the other hand, some of the world’s largest trading nations are seriously considering the Model Law or have adopted rules consistent with it. Thus, whether the Model Law can be judged a success or failure is still undetermined.
Considering the experience to date of the UNCITRAL Model Law on Cross-Border Insolvency as a case study, this article seeks to critically assess the Model Soft Law Approach to harmonisation. While the various approaches to harmonisation also pertain, this article is specifically limited to testing empirically the attributes claimed by the Model Soft Law Approach’s proponents and limitations foreseen by its detractors. In writing this critique, I largely, but not completely, set aside the normative question of whether a harmonised law, in and of itself, is a good thing and whether the contents of this Model Law are desirable. Further, I do not go deeply into the question of uniform application of model laws after adoption. Instead, I focus on the procedural question of the form and manner in which harmonised law is adopted in specific countries and how that process impacts on the normative value of the law. Stated differently, I am not focusing on the first or drafting stage of the Model Soft Law Approach, which largely concerns the content of the law. Nor am I focusing on the last or application stage of the approach, which largely concerns consistent interpretation and amendment. Rather, this article focuses on the intermediate or adoption stage, which is largely about how the process of domestic incorporation of a model law can impact and alter both normative content and consistent application.
The article is organised as follows: Section II briefly considers the Model Soft Law Approach to harmonisation and systematically delineates the advantages and disadvantages claimed by supporters and detractors. Section III then reviews the background of the UNCITRAL Model Law. In Section IV, I examine a variety of countries’ experiences with the Model Law, particularly considering Japan and Australia. Based on these various experiences, I argue in Section V that the Model Soft Law Approach has not achieved its promised harmonisation due to a failure in achieving extensive adoption and divergences in content. I further assert, however, that the experience with the UNCITRAL Model Law suggests that the Model Soft Law Approach is nonetheless viable, because it may be on the threshold of widespread adoption and because model laws may still provide legal assistance and comparative law benefits. I close in Section VI by positing that for the Model Soft Law Approach to achieve its full potential – that is, for it to deliver harmonisation benefits – it is incumbent upon the sponsoring international non-governmental organisations (NGOs) to commit as much, if not more, effort, time, and resources into domestic adoption as they do drafting.
The process of the Model Soft Law Approach is very straightforward. Usually an international NGO such as UNCITRAL, the International Institute for the Unification of Private Law (Unidroit), or the Hague Conference will identify an area of commercial law where harmonisation would benefit private actors. Next, a working group of international experts in the identified area draft a model law reflecting their various traditions and experiences while trying to create an optimal solution to typical problems. After approval by the sponsoring NGO, it is left for foreign states’ domestic legislatures to either adopt or reject the model law for incorporation into their municipal statutes. One of the key characteristics of the Model Soft Law Approach, however, is that a state is free to adopt the model with slight modification or even adopt a law that is informed by, though not necessarily moulded after the model. Thus, substantively, the approach is characterised by the fact that the law is adopted unilaterally as domestic legislation and by the fact that the Model Soft Law Approach allows for divergences from the original text.
The flexibility in content and simplicity through unilateral adoption, in turn, have made the Model Soft Law Approach very popular in the past decade. UNCITRAL, the United Nations’ (UN) commercial law branch, in particular has endorsed the approach and has sponsored six model laws, five since 1992. Most successful among them is the UNCITRAL Model Law on International Commercial Arbitration (1985), which has been adopted by 37 countries including Australia, New Zealand, the United Kingdom, many of the more populous states in the United States, and in Asia: Hong Kong, Korea, and Singapore. UNCITRAL’s other model laws, however, have only been adopted by a handful of states.
Advocates have provided laundry lists of the apparent advantages and disadvantages to the harmonisation movement in general and each of the specific approaches. However, few have tried to systemise these claims or test the assertions against actual experience. This article does both. First, the claimed advantages of harmonisation generally may be categorised by purpose into three distinct but overlapping groups. These groups of benefits include: (1) Harmonisation Benefits, which relate to the advantages achieved when a group of states use the same law; (2) Legal Assistance Benefits, which relate to the advantages of gap filling realised by countries without a developed history in the area; and (3) Comparative Law Benefits, which relate to the advantages of comparative experience extracted by countries with a developed history in the area. Further, there are advantages and disadvantages to the Model Soft Law Approach in comparison to the other approaches to harmonisation. Thus, categorising the specific advantages that proponents have asserted within these classifications results in the following itemised lists.
(1) Harmonisation Benefits include:
• facilitating a common market;
• simplifying legal compliance and planning;
• simplifying cross-border litigation and dispute resolution;
• simplifying, in practice, conflict of laws questions;
• making applicable laws readily accessible in a variety of languages; and
• providing a neutral and objective law.
(2) Legal Assistance Benefits include:
• filling a domestic legal vacuum or undeveloped area of law, particularly in new market economies and developing states that have not had significant international trade;
• creating a legal regime attuned to international transactions and thereby promoting foreign investment and trade; and
• providing foreigners with confidence in the sophistication and objectivity of the domestic legal regime or rule of law.
(3) Comparative Law Benefits include:
• simplifying domestic legislation in the relevant area by consolidating the often disparate law;
• providing a normatively better law than any domestic legislation given that it was drafted by international experts with the benefit of wide comparative experience; and
• regardless of adoption, providing a well-reasoned comparative example to inform the domestic drafting process.
(4) The Model Soft Law Approach’s Comparative Benefits include:
• easier realisation than the Global or Limited Hard Law Approaches because only domestic agreement is necessary; 
• better ability to reflect a nation’s unique national interests and systems because divergence from the model is possible;
• quicker and more effectiveness for building international harmony than the Principles Soft Law Approach because it carries the weight of state sanction; and
• better normative law because it allows for limited competition among states for the ‘best’ law.
Critics of the Model Soft Law Approach have provided a variety of perceived problems that might also be systemised and tested against actual experience. Categorised the speculated short-comings include: (1) Substantive Content Argument, that is, a belief in the superiority of the content of local laws; (2) Familiarity Arguments, that is, fears of legal reform in general – whether domestically or globally generated; and (3) Parochial Arguments, that is, fears or prejudices against any foreign influence. In addition, there are claimed comparative disadvantages of the Model Soft Law Approach when contrasted with the other harmonising approaches. The specific limits identified by the critics may be subsumed within these classifications as follows.
(1) Substantive Content Arguments include:
• the political process and local expertise invoked in drafting a domestic law make it normatively better than any law drafted by technocrats based on foreign or comparative experience;
• uniform law prevents competition among states, which eventually produces better laws;
• many uniform laws are internally inconsistent as they result from compromise among advocates of incompatible and largely incongruous legal systems; and
• many uniform laws are too narrow in scope.
(2) Familiarity Arguments include:
• domestic law, where a pre-existing regime exists, is known and tested, and thus, easier to apply and more predictable.
(3) Parochial Arguments include:
• adopting a law drafted elsewhere impinges on domestic pride and the natural development of the law; and
• an internationally drafted text may be perceived as favouring developed countries’ interests, from where most experts come, rather than protecting developing countries’ interests.
(4) The Model Soft Law Approach’s Comparative Disadvantages include:
• risk that domestic amendment in the adoption process will deprive the model of its meaning or destroy any uniformity;
• inability to achieve any widespread harmonisation because adoption is left to individual countries, rather than global, regional, or even bilateral agreements.
Because the practical problems and inefficiencies inherent in international economic failures are so obvious and recurring; states, experts, and practitioners have been trying to harmonise insolvency law for centuries. With certain notable exceptions, it has proven all but impossible. The chief problem is the fact that insolvency implicates a number of very sensitive public policy issues that states differ on considerably. For example, modern insolvency law generally involves the redistribution of property contrary to private agreements and necessarily implicates controversial issues such as tax and employee liabilities. Furthermore, in contrast to other areas of transnational commercial law that have achieved harmonisation, no country recognises a freedom of choice that allows private parties to circumvent applicable domestic insolvency law.
Given this history, UNCITRAL’s identification of the Model Soft Law Approach for its attempted harmonisation in 1995 was logical. First, the use of a model law would allow divergence among different systems and national laws. Second, international and limited hard law efforts up to this point had failed, leaving optimism only for the soft law approaches. Third, the UNCITRAL Working Group limited its efforts to the discrete issue of the procedural aspects of cross-border cases. In doing so, they avoided the more controversial and diverging areas of substantive insolvency law and covered an area in which many domestic systems had a vacuum or only a minimal regime.
An UNCITRAL Working Group on insolvency was formed in 1995, comprising all UNCITRAL members including Australia, Japan, the United Kingdom, and the United States. The Working Group had four drafting sessions over two years, which were largely assisted by INSOL International, the professional association for international insolvency practitioners, and Committee J (Insolvency) of the International Bar Association. The Working Group completed its draft in early 1997 and presented its results to UNCITRAL. UNCITRAL subsequently adopted the Model Law and passed it on to the full UN, which gave final approval in December 1997. In the six years since its adoption, UNCITRAL claims that five states have adopted the Model Law. Further, it has been included in legislation or is being seriously considered in a number of other countries including Australia, New Zealand, the United Kingdom, and the United States.
The contents of the Model Law, as noted above, only cover the procedural issues involved in cross-border cases. First, the law guarantees standing for foreign proceedings and their representatives in domestic cases. Second, the Model Law provides rules for recognition of foreign proceedings in local courts. Third, the law explicitly gives specified parties such as insolvency trustees, administrators, and judges authority to cooperate and communicate with corresponding foreign insolvency officers. Finally and most importantly, the Model Law provides rules for priority and cooperation among domestic and foreign cases covering the same debtor. Normatively the law has been both praised and discredited, with the majority of reviews being favourable.
Amidst the flurry of publicity following the finalisation of the Model Law by UNCITRAL and the UN, it appeared that a tsunami of states were lining up to adopt the model. Unfortunately, that dream has not been realised in the ensuing years. This is despite the International Monetary Fund’s (IMF) and World Bank’s mandated regime improvement programs following the Asian Crisis and its impact on Eastern Europe. Furthermore, any momentum the Model Law had has been undermined by the EU’s 2002 implementation of its limited hard law solution to insolvency, the global post-dot.com economic slowdown, and the international political instability following 11 September 2001. Despite these setbacks, the Model Law has been adopted in a few countries and a few key states may be on the point of incorporating it into domestic law. Thus, examining these countries’ experience in adopting and considering the Model allows us to test empirically the asserted benefits and limitations of the Model Soft Law Approach to harmonisation.
Four countries have adopted the Model Law with little or no revision. The first to adopt it was the tiny, new country of Eritrea in 1999. On the one hand, this was exactly the type of enacting state for which the Model Law was envisioned, that is, the country had a legal vacuum in the area and little legislative drafting or practical cross-border insolvency experience. Thus, the Model Law provided a quick, easy, and neutral option, and all of the Legal Assistance Benefits of the Model Soft Law Approach were achieved. On the other hand, Eritrea’s small population, globally inconsequential economy, and minimal amount of foreign investment and trade make it unlikely that the law will get much, if any, use.
Another adopter is the state of Montenegro in the former Yugoslavia. However, as with Eritrea, though it is a prototypical state for incorporation and achieving the Legal Assistance Benefits of the Model Soft Law Approach, Montenegro’s small population, economy, and international trade presence makes the impact of Montenegro’s adoption on the harmonisation trend minimal.
The other two adopters of the Model Law – Mexico and South Africa – are more significant both in impact and symbolically. While neither country is an economic super-power, both Mexico and South Africa are important medium-sized global and crucial regional economic players. That is, Mexico and South Africa both have domestic economic weight. Further, both are closely woven into the global economy having domestic companies doing significant business abroad and foreign companies enjoying considerable local penetration. In short, the likelihood of a transnational corporation’s insolvency being partially played out in either of these countries is very high. Furthermore, these countries’ adoption is symbolically important as they are both arguably part of the Civil Law tradition, the legal family that has voiced the most difficulty with the Model Law’s innovations. Finally, both countries are the regional leaders for their respective geographical areas, Southern Africa and Central America; thus, their adoption creates a strong regional precedent.
Taken as a group, however, the adopters present a weak case in support of the Model Law as an international harmoniser. Together the countries represent an extremely small portion of the world’s economy or trade. Further, there appears to be no regional or historical synergy or cohesion among these countries that can produce a snowball effect in which surrounding states might be engulfed. Thus, while the Model Law has hopefully served its Legal Assistance purpose by filling a vacuum or providing a neutral or well-drafted law for these states, it has failed to achieve any of the Harmonising Benefits that are at the core of the unification movement.
UNCITRAL has also listed Japan as an adopter of the Model Law. Indeed, Japan has adopted a new cross-border insolvency law after studying the Model Law. Further, Japanese drafters, academics, and practitioners have said, ‘We can conclude in the final analysis that [the new Japanese] legislation on cross-border insolvency adopts in principle the rule of the model law on cross-border insolvency.’ Unfortunately, what has been lost in the translation and hype over the adoption of the new Japanese law is that while consistent with or in principle based on the Model Law, Japan’s new cross-border insolvency is not modelled on the Model Law.
This subtle linguistic difference is substantively important. The greater the divergence between an adopted national law and its soft law model, the more difficult it becomes to realise any of the Model Soft Law Approach’s Harmonisation Benefits. Japan’s law was drafted with an eye towards the Model Law. Further, many of its provisions and indeed some of the Japanese law’s structure is consistent with the Model Law. But, only the most cloying grandmother looking for resemblances in second-cousins or the most abstract English professor looking for borrowed imagery would consider these two laws materially similar
The split between the Japanese law and the Model Law is most obvious in how each law handles the two most important issues in cross-border insolvency legislation: recognition for a foreign case and coordination among concurrent cases. The Model Law’s rule on recognition is straightforward. First, article 17 provides a foreign insolvency ‘shall be recognised’ if it is a legitimate insolvency abroad and all of the procedural requirements are satisfied. Second, once a foreign insolvency is recognised, stays automatically go into effect and the local court ‘may’ grant any other necessary stays or turnover of debtors assets, ‘providing that the court is satisfied that the interests of the creditors in this State are adequately protected’. In contrast, under the Japanese law, article 22 provides that the court ‘will’ recognise the foreign proceeding as long as it is a legitimate insolvency abroad and all the procedural requirements are satisfied. What is not clear is whether the Japanese ‘will’ is like the Model Law’s ‘shall’ or ‘may’, both of which are used in other parts of the Japanese law, that is whether it is mandatory or discretionary. Second, after recognition pursuant to this standard, the Japanese law does not provide for any automatic stays and only allows a turnover where ‘there is no likelihood of the interests of creditors in Japan being unreasonably prejudiced’. Thus, not only do the powers granted by the acts differ, the acts apply different standards where they seek to provide the same relief. One of the world’s leading experts on cross-border insolvency, Professor Jay Westbrook, has pointed out specifically that the language used in the Japanese statute to safeguard creditors’ interests in a turnover was purposefully avoided in the Model Law. This was because it was feared that courts might interpret the Japanese standard to mean that no order should be granted where, despite being treated equitably in the foreign insolvency, Japanese creditors would do better in a local proceeding.
Dissimilarity is the rule when comparing how the Japanese and Model Laws treat concurrent cases as well. The Model Law provides for concurrent handling of recognised foreign insolvencies and local insolvencies. In contrast, the Japanese law mandates dismissal of the foreign insolvency whenever a local case is filed, even if the local case is filed after the foreign case has been recognised. The Japanese law does provide an exception to this rule for foreign ‘main’ proceedings, but even in this case it requires that the court avoid a concurrent situation by dismissing the local proceeding.
Beyond these substantive differences in the most significant provisions of the respective acts, the two laws are formalistically and structurally different throughout. While this may not produce substantively different outcomes, it does preclude any bilingual fluency by users of the two statutes. In short, knowledge of what is required for recognition or coordination under the Model Law will not in any way prepare or inform a lawyer as to what is procedurally necessary and what the substantive standards are under the Japanese law.
The failure of the Japanese law and the Model Law to overlap, however, is not necessarily an indefensible result. Japan’s new law, while not as forward reaching as the Model Law, is significantly more progressive, detailed, and internationally oriented than its prior law, both in the books and in action. Further, the Model Law did provide some important inspiration and guidance for the Japanese act, most notably the cross-filing provisions. Finally, it is hoped that though no concrete reasons have been given by its drafters or in the literature, Japan’s failure simply to adopt the Model Law or a close proximity of it reflect important public policy concerns and the political pragmatics that were necessary to take any step forward. Others have cynically shown how reform organs such as those used in Japan harbour an incentive to produce unique draft legislation regardless of available models, and the most commonly cited reason in Japan for the non-adoption of the Model Law (that it was inconsistent with civil law notions of judicial capacity) seems insincere in the face of other civil law countries’ adoption of the act, the majority of civil law drafters in UNCITRAL, and mostly the fact that regardless of academic drafters’ theoretical concerns Japanese judges have in practice been proactively managing cross-border insolvency cases for decades. Thus, though Japan chose for its own reasons not to take advantage of the Harmonisation Benefits, it was still able to reap the Comparative Law Benefits.
By diverging to the extent it did, however, Japan forwent any of the Harmonisation Benefits associated with the Model Law. This is disappointing for Japan, but it is also disappointing for the entire global community. First, the fewer participants in the harmonisation community, the lesser the benefits. Second and much more disturbingly, the promotion of the new law by both its Japanese supporters and UNCITRAL as part of the harmonised community under the Model Law will increase confusion and actually negatively impact the harmonisation movement. This is because any assumption that what they are doing in Japan is based on the Model Law will be erroneous. In practical terms, a foreign lawyer today has no more insight into Japanese cross-border insolvency than she did before the law change, but based on the publicity she might very well have the mistaken belief that because she understands the Model Law she understands Japan’s system. This in turn will produce one of two negative consequences either: (1) the foreign lawyer will incorrectly advise clients that Japanese law performs like the Model Law, or (2) she will discover the divergence and distrust all countries’ laws that are in fact based on the Model Law. The inverse case is true for Japanese lawyers advising foreign operating clients as well.
In summary, Japan has indeed adopted a new cross-border insolvency law that was drafted considering the Model Law. The Japanese law, however, while not inconsistent with the principles contained in the Model Law, is not modelled on the Model Law. This does not prevent Japan from achieving many of the Comparative Law Benefits of the Model Soft Law Approach, and in fact Japan and the drafters of its new law should be proud of the progression they have made from the previous status quo. Nonetheless, the divergence between the Japanese law as enacted and the Model Law does preclude Japan from realising any of the Harmonisation Benefits of the Model Soft Law Approach. Furthermore, the promotion of the Japanese law as an example of adoption of the Model Law in fact harms the harmonisation movement by deceiving practitioners into either complacency or unnecessary scepticism.
The Model Law’s present lack of widespread adoption may not, however, be indicative of its actual current status. The law is being seriously considered in a number of important countries and may be on the eve of the kind of global endorsement it needs for across-the-board success.
The most serious studies of the UNCITRAL project are being conducted in the Common Law world. Even beating the Model Law itself to adoption, Canada enacted cross-border insolvency provisions to its Bankruptcy and Insolvency Act in 1997 that were influenced by the draft Model Law. In fact, in many respects the rules adopted in Canada are as consistent with the Model Law as the Japanese law, which claimed to be based on the Model. More relevantly, Canada is said to be presently exploring full adoption of the final version of the Model Law. Following Canada, New Zealand was one of the first countries to study seriously the Model Law, and its Law Commission recommended its adoption in 1999. Subsequently, however, New Zealand has undertaken an all-embracing examination of its insolvency law, which has delayed the discrete adoption of the Model Law, but only strengthens the likelihood of its approval as part of a comprehensive bill. Recently, New Zealand has announced that a bill to enact the Model Law will be introduced to Parliament in 2004. A step ahead of New Zealand is the United Kingdom. In November 2000, Parliament empowered the government to introduce the Model Law at any time as an internal regulation. The government, however, has still not exercised this power, and it remains unclear when it will.
Along with the Commonwealth countries, the United States is poised to adopt the Model Law. Both houses of the United States Congress twice passed bills containing the Model Law, but on both occasions the bills failed to be enacted because of political manoeuvring unrelated to the Model Law. American supporters vow to try again after clearing away the obstacles of past efforts. Interestingly, and in contrast to Japan, the proposed American version of the Model Law would be almost unadulterated from the Model Law. This is despite the fact that the United States currently has probably the most developed history of, and progressive and detailed provisions on cross-border insolvency in the world. What the United States has done to avoid regressing for the sake of international conformity and the Harmonisation Benefits of the Model Soft Law Approach, however, is to include one important supplement to the Model Law. The United States has taken advantage of the Model Law drafters’ intentional lacuna in article 7 to incorporate its current standard for recognition of a foreign proceeding. By doing so, the United States is able to join the harmonisation efforts while retaining its developed case law and more progressive approach. Thus, the United States might be seen as a model itself of how a state can maturely and sophisticatedly incorporate the Model Law, capturing its Harmonisation Benefits while preserving its own unique public policy concerns and significant experience.
Australia may also be added to the list of countries seriously considering adoption of the Model Law. The government introduced a proposal to adopt the law in late 2002. No opposition has surfaced, and it appears a bill to adopt the Model Law will be introduced in 2004. The Australian case, though, should be contrasted with the American one. While the United States openly used the intentional lacuna to incorporate its existing standard directly into the Model Law, Australia has not been as clear with regard to its existing law and use of the lacuna. Instead, Australia’s proposal merely provides that Model Law article 7 will allow for any additional assistance allowed by law and the non-revocation of the old standard. The problem with this approach is that, incorporating by reference rather than explicit inclusion, creates confusion regarding the existence of the other standard, discourages use of the alternative standard, and renders the other standard more susceptible to amendment by displacement. Furthermore, the ambiguity raised by the indirect incorporation creates the possibility of following an unconsidered bandwagon rationale for adoption, that is, adoption for the sake of adoption rather than any considered substantive reason. Australia is one of the few countries that can boast of a more progressive approach to recognition of cross-border insolvencies than the United States, though limited to a number of designated countries and lacking significant case law development. The Australian proposal to adopt the Model Law has not fully considered this unique position and simply advocates an uncritical wholesale adoption of the UNCITRAL rules. Thus, if the proposal is adopted Australia may gain the benefits of harmonisation, but it might regress regarding its overall cross-border regime. By doing so, not only does Australia lose from a domestic standpoint, but the global community loses in the sense that the harmonisation effort will have created a lowest common-denominator effect that pre-empts any race among states to have the most efficient or progressive legislation.
One of the strangest aspects over the short history of the Model Law has been the silence of those states that were thought to be the most obvious beneficiaries of the effort. As noted above, one of the chief benefits of the Model Soft Law Approach is intended for those countries that could derive legal assistance from it, as they might otherwise lack legal or practical experience in the area. Proposals such as the Model Law are suppose to be prime alternatives for such countries, as they neatly fill a vacuum with a neutrally and expertly drafted law while allowing a country to maintain its dignity by not simply receiving another state’s law.
This promise has not materialised for the Model Law. The newly emerging economies in Eastern Europe have not adopted it, nor have those countries affected by the Asian Crisis. As far as can be discovered in the literature and country reports, there does not appear to have been a significant debate or disagreement about the benefits or limits of the Model Law substantively: it simply is not on the agenda in places such as Indonesia, Thailand, or Korea. Only India seems to have even superficially considered the Model Law, and with its developed legal tradition and significant economy India probably cannot be considered a country in need of such legal assistance. The silence is even more astounding when one considers that the UN Development Programme, the IMF, the World Bank, and the Asian Development Bank have all sponsored legal assistance and development programs in the region.
The question is, does empirically testing the Model Soft Law Approach against actual experience support the promise of the supporters or confirm the warnings of the pessimists? Most fundamentally, it is important first to acknowledge that the Model Law has failed so far to achieve any global harmonisation in this area. Thus, most of the lessons from the UNCITRAL Model Law experience are negative ones. The Model Law’s failure to achieve harmonisation is two-fold. First, the Model Law has not been adopted by a sufficient number of countries representing the requisite global economic weight. Second, some of the countries that have arguably adopted the law have diverged from the Model Law to the extent that no Harmonisation Benefits are possible. Nevertheless, even with these present failings, the Model Law experience suggests that some benefits may still be realised by pursuing the Model Soft Law Approach to harmonisation.
As with any of the identified approaches to harmonisation, before they may be considered a success or even effective, a sufficient number of states must agree to the standard. What exactly constitutes a sufficient number of conforming states under the soft law approaches is undetermined, but from a practical standpoint it is likely to be similar to the levels required under the hard law approaches. Success under the hard law approaches may come prior to global conformity, though historically this requires either a dominant economic supporter such as the United States with the Convention on Contracts for the International Sale of Goods (CISG) or a community of medium- and small-sized economic participants as with the Kyoto Protocol. In the case of the Model Law, only four states have adopted it, and these states alone do not represent global conformity or even the limited synergy necessary to achieve some of the harmonisation goals of the Model Soft Law Approach. Further, these states have no natural connections, regional or otherwise, that might be developed to capture limited harmonisation gains. In short, for whatever reasons, the UNCITRAL Model Law has failed to achieve the necessary weight to realise harmonisation and, therefore, must cast doubt on the general or comparative allure of the Model Soft Law Approach.
Furthermore, some of those countries that have ostensibly adopted the Model Law have altered its content so far as to preclude any harmonisation. It is worth repeating here that I am not addressing the relative normative value of the Model Law’s content versus the quality of any one state’s amendments. Instead, I am concerned with how modifications – both normatively good ones and bad ones – during the process of local incorporation might substantively rather than formalistically alter the contents and subsequently preclude uniform application of the law. This in turn prevents materialisation of many of the promised benefits of the Model Soft Law Approach.
For example, Japan and Canada both adopted cross-border insolvency laws that were ‘consistent with’ but not ‘modelled on’ the Model Law. The resulting divergences between the local laws and the Model Law are great enough that familiarity with one provides no assistance in understanding the other. That is, significant content differences preclude any common understanding and thus realisation of the Harmonisation Benefits claimed by a soft law approach. It is not known whether Canada and Japan’s divergence from the Model Law resulted from true differences with the public policy represented in the Model Law, reflected local political manoeuvring necessary to enact a new law, was the result of a skewed legal reform infrastructure, or simply grew out of a misunderstanding by both legislators and drafters of the Model Soft Law Approach. Whatever the reasons for these differences in content, non-uniform application is virtually assured. Uniform application of identical model laws by different states’ courts is a notoriously difficult area, but no one could expect consistent application of different rules and standards. Furthermore, considering the difficulty in coordinating the uniform application over a variety of states and legal systems, even relatively minor and arguably formalistic modifications of the Model Law might produce disparate results in application. Thus, the UNCITRAL Model Law experience tends to indicate that the amount of divergence tolerable under the Model Soft Law Approach is in fact less than promised.
Australia’s proposal to follow the Model Law strictly would even seem to suggest that no deviations from a model law may be tolerated under the Model Soft Law Approach. Over the years, Australia has refined and developed a very sophisticated approach to cross-border insolvencies, yet it appears prepared to forgo much of that experience to ensure compliance with the Model Law sufficient to capture the promised Harmonisation Benefits. In doing so, Australia is effectively sacrificing many of the Comparative Law Benefits of the Model Soft Law Approach. Specifically, strict adoption of the Model Law would result in Australia indirectly forsaking its hard-earned experience by obfuscating its present progressive standard. Moreover, it would deprive the international community of the vision and competition among states created by Australia’s otherwise cutting-edge approach. Viewed from this perspective, the Australian experience might suggest that the Model Soft Law Approach to harmonisation may arguably be a force pulling the most advanced and progressive states down to a lowest common denominator standard.
The experiences to date of the various countries adopting and considering the UNCITRAL Model Law reveal some serious limits in the claimed benefits of the Model Soft Law Approach to harmonisation. Basically, only four countries have adopted laws closely modelled on the Model Law. It is unclear whether this lack of endorsement reflects a problem with the content of the Model Law itself, the Model Soft Law Approach in general, simply insufficient passage of time, or even inexplicable happenstance. Whatever the reason, it may be said that in the Model Law’s first six years the experiment has failed to achieve its primary purpose of harmonisation. Furthermore, some of the few adopters of cross-border insolvency laws drafted considering the Model Law have failed to enact statutes sufficiently similar to the model. In other words, the sceptical prognoses that the approach’s inherent flexibility would in fact defeat any harmonisation and its associated benefits have partially proven true. Similarly, concerns that unconsidered adoptions of model law standards would derail any positive competition among states for the most advanced law while spurring them to regress to a lowest common denominator as a standard also have arguably materialised. In short, the UNCITRAL Model Law experience thus far suggests both practical and substantive limits to the Model Soft Law Approach to harmonisation.
The UNCITRAL Model Law’s failure to realise any Harmonisation Benefits to date does not necessarily mean, however, that the Model Soft Law Approach to harmonisation is fatally flawed in general or in comparison to the other approaches. Instead, I submit that despite the limitations exposed above, the experience under the Model Law also demonstrates: (1) how close the Model is to achieving the requisite acceptance necessary for harmonisation; (2) how content divergences in fact might be accommodated to preserve harmonisation goals, local experience, and inter-state competition; and (3) the importance of the Model Soft Law Approach’s alternative benefits regardless of harmonisation.
First and most obviously, despite only four states adopting the model in the half decade since its completion, a sufficient weight of approval may be around the corner. The United Kingdom has already approved the measure, and the United States remains poised to enact it in the future. If the Model Law was to come into effect in these two states, then that alone would assure the economic heft necessary to achieve the promised Harmonisation Benefits. As with the United States’ adoption of the CISG, a United States endorsement and domestic application of the Model Law to the thousands of American cross-border insolvencies already taking place there would force uncommitted states to consider seriously the model as well as inadvertently facilitating their experience under it every time one of its cases intersected with the United States. In short, though through at least 2003 all United States efforts for adoption appear stalled, if the United States, or the United Kingdom for that matter, does eventually implement the Model Law this might indeed ensure its success, which in turn would be a firm endorsement of the Model Soft Law Approach.
Adoption by states such as Australia and New Zealand alone would not likely result in harmonisation. Yet, like South Africa and Mexico, these states’ ascension would contribute to even more global mass and regional leadership. Furthermore, if both Australia and New Zealand adopted the model, the bilateral experience achieved in the frequent trans-Tasman cases would provide relevant history to better educate other states about the law’s potential as well as possibly initiating a regional snowball effect.
Second, the American case in incorporating the Model Law into domestic law suggests that not all deviations from the content of the Model Law must be avoided. The United States’ draft cross-border legislation diverges from the Model Law, but it is still able to realise both the Harmonisation and Comparative Law Benefits of the Model Soft Law Approach. The United States drafters achieved this by using the Model Law’s intentional lacunae to preserve and build upon its own significant history in the area. By incorporating changes in this way, the American law passes the test for Harmonisation Benefits; that is, a person familiar with the Model Law would be immediately conversant with the United States version, following a quick glance to the section specifically set aside to address any local rules. Furthermore, in contrast to an unconsidered bandwagon-style adoption, the United States approach allows a state to maintain the best of its historical experience in the subject matter as well as maintaining a more progressive stance than the Model Law’s default rules. This in turn suggests that the critics’ concern regarding diminished competition among states for the most efficient or optimal local standard might be overcome.
Third, it is important to remember that, in contrast to the hard law approaches, even the complete failure of the Model Law to achieve any Harmonisation Benefits does not transmute into the futility of the Model Soft Law Approach. The Comparative Law and Legal Assistance Benefits of the approach can be realised irrespective of whether the global weight for harmonisation is attained. Thus, via the Model Law, countries without the historical experience or present law commission infrastructures may benefit from some of the most sophisticated legal reform research available. At the same time, those countries with either historical experience or present reform infrastructure may also take advantage of the Model Law by considering it as a developed and sophisticated comparative example. Hopefully, any serious domestic consideration will result in the Model Law being incorporated in a manner like the United States, but even if it results in substantively different content such as in Japan, the Model Soft Law Approach will have achieved its purpose in a comparative law sense.
In summary, the present experience under the UNCITRAL Model Law supports the nay-sayers and paints a bleak prognosis for the viability and desirability of the Model Soft Law Approach to harmonisation. However, to focus merely on this might be too short-sighted. Indeed, only a handful of countries have adopted the Model Law in the half decade since its completion and some of the states that have considered it have eventually diverged significantly from the model. Nevertheless, there are signs that a groundswell of support may be developing, that divergences may be made without precluding harmonisation, and that the Model Soft Law Approach might produce other benefits regardless of harmonisation. Thus, while experience with the Model Law suggests no reason to abandon the other approaches for a renewed commitment to the Model Soft Law Approach, it also does not warrant relegating the model mode to fanciful theoretics.
Accepting this mixed message regarding the utility of the Model Soft Law Approach considering the evidence under the UNCITRAL Model Law, some provisional pragmatic suggestions might be made. In particular, any domestic legislature considering the Model Law or any international NGOs advocating harmonisation might study the cases available. For domestic legislatures and drafters, the point that needs to be reiterated is that ineloquently incorporating even relatively minor divergences from model laws will prevent realising any Harmonisation Benefits. On the other hand, it is important that adoption is not undertaken simply by unreflectively jumping on an international bandwagon without considering past domestic experience. Counter-intuitively, the balance that needs to be struck might be more difficult for advanced nations with developed legal reform infrastructures. As others have documented, domestic reform bodies need to justify their existence and simply endorsing a model law with only a single or no changes does little to promote their own interests. In contrast, states without a history in the area or a complex legal reform structure are better situated to claim the harmonisation and other benefits of the Model Soft Law Approach, though their typically smaller economies and international trade presence limit the impact of their joining the harmonisation community.
The more important question is how to deliver this message to domestic drafters and legislators. The international NGOs sponsoring the model laws themselves are probably the best answer. They have a reputational interest in wide adoption of their projects, the organisational and funding support to sell uniform adoption of the laws, and the international network to remain connected to the relevant domestic actors. The NGOs in fact are aware of and undertake this responsibility. I submit, however, that the international NGOs’ commitment to and support for the domestic adoption process needs to be prioritised to a greater extent than the initial drafting process. This may be a departure from present practice. For example, the UNCITRAL Insolvency Law Working Group rather than circling the world to ensure that more than four countries have endorsed its last effort is setting off on a new drafting project. The pull of making new international law is understandable: it is exciting and glamorous to be jetting to different international locales to create new global norms with foreign colleagues. The drafting process, however, is expensive, and these are expenses that may be better used to ensure that previous efforts are in fact employed. In short, I argue for fewer projects more thoroughly undertaken.
The paradigmatic problem of transnational operators confronting multiple national laws and its solution of a single uniform law is ageless. Yet, the various trends for achieving that end have varied over the years. Currently the Model Soft Law Approach is very much in vogue among scholars, NGOs, and international drafters. Given this popularity, it is important to test how the actual process of incorporating these models into domestic law is serving or hindering harmonisation. The experience under the UNCITRAL Model Law suggests that the promised advantages of the Model Soft Law Approach are harder to achieve than claimed but that prophesied shortcomings are not necessarily inevitable. This in turn translates into a very simple pragmatic message: those involved in the conceptualisation, sponsoring, and creation of model laws need to commit as much energy to the pedestrian exercise of domestic incorporation as they do to the more alluring task of drafting new international models.
[∗] Senior Lecturer, The Australian National University, Faculty of Law and Co-Director, the Australian Network for Japanese Law. I would like to thank Tanya Spisbah for her excellent research assistance. I would also like to thank those who helped me directly and indirectly including Roy Goode, David Levy (UNCITRAL), Takashi Kubota, Jay Westbrook, and participants at presentations to Osaka School of International and Public Policy, Nagoya University Law School, the Australian New Zealand Society of International Law, and the Australian National University. It goes without saying that all errors are mine alone.
 Professor Sir Roy Goode begins his influential essay on this subject stating: ‘Truly there is nothing new under the sun. Nearly two thousand years have elapsed since Cicero proclaimed the virtues of legal harmonisation.’ Roy Goode, ‘Reflections on the Harmonisation of Commercial Law’ in Ross Cranston and Roy Goode (eds), Commercial Law and Consumer Law (1993).
 Goode has categorised nine methods, ibid 57, however, David identifies only three. See René David, ‘Ch 5: The International Unification of Private Law’, in René David (ed), Legal Systems of the World: Their Comparisons and Unification, II International Encyclopedia of Comparative Law (1975) 3.
 Most notably exemplifying this approach in transnational commercial law are: United Nations Convention on Contracts for the International Sale of Goods 1980 (CISG) and (2) The World Trade Agreement 1994 (WTO).
 Most notably exemplifying this approach in transnational commercial law is: Maastricht Treaty on European Union and Final Act, 3 February 1992, 31 ILM 247 (establishing the European Union). The Limited Hard Law Approach may either be pursuant to bi- or multi-lateral agreements with a limited number of parties that rely on supranational agreement or it may be pursuant to unilateral domestic legislation of a inflexible uniform law.
 Hague Conference on Private International Law, Future Hague Convention on International Jurisdiction and Foreign Judgments in Civil and Commercial Matters, <http://www.hcch.net/e/workprog/jdgm.html> Brussels Council Regulation 44/2001, formerly 1968 Brussels and 1988 Lugano Conventions on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters.
 Incoterms 2000 (ICC publication No 560). Other examples include: Unidroit Principles of International Commercial Contracts 1994; Principles of Cooperation in Transnational Insolvency Cases Among the Members of the North American Free Trade Agreement (2000); ICC’s Rules of Conduct to Combat Extortion and Bribery in International Business Transactions of 1977, revised 1996. See also Roy Goode, ‘International Restatements of Contract and English Contract Law’ (1997) 2 Uniform Law Review 231.
 UNCITRAL, ‘Guide to Enactment of the UNCITRAL Model Law on Cross-Border Insolvency’ (1997) - <http://www.uncitral.org/english/texts/insolven/insolvency.htm> (hereinafter Guide to Enactment).
 United Nations Commission on International Trade Law (UNCITRAL), UNCITRAL Model Law on Cross-Border Insolvency, Report of UNCITRAL on the Work of Its Thirtieth Session, UN GAOR (52nd Sess) Annex I, 68-78, UN Doc A/52/17 (1997) <http://www.uncitral.org/english/texts/insolven/insolvency.htm> .
 Kurt H Nadelmann, Conflict of Laws: International and Interstate (1972) 299-300, 303, originally published as ‘Bankruptcy Treaties’ (1944) 93 University of Pennsylvania Law Review 58; Philip R Wood, Principles of International Insolvency (1995) 291.
 Arguing against the normative value of harmonised law as currently drafted see, Paul B Stephan, ‘The Futility of Unification and Harmonization in International Commercial Law’ (1999) 39 Virginia Journal of International Law 743. Arguing against the contents of this Model Law see, Lynn M LoPucki, ‘The Trojan Horse in UNCITRAL’ 33 BCD News and Comment (30 March 1999), available on LEXIS, bankruptcy/Legal News database.
 Michael J Bonnell, ‘International Uniform Law in Practice: Or Where the Real Trouble Begins’ (1990) 38 American Journal of Comparative Law 865.
 Regarding each of these international NGOs and their purpose in relation to harmonisation see, UNCITRAL <http://www.uncitral.org> International Institute for the Unification of Private Law (Unidroit) <http://www.unidroit.org> Hague Conference on Private International Law <http://www.hcch.net> .
 UNCITRAL Model Law on International Commercial Arbitration (1985); UNCITRAL Model Law on International Credit Transfers (1992); UNCITRAL Model Law on Procurement of Goods, Construction and Services (1994); UNCITRAL Model Law on Electronic Commerce (1996); UNCITRAL Model Law on Electronic Signatures (2001).
 See UNCITRAL, Status of Conventions and Model Laws (last updated 8 July 2003) <http://www.uncitral.org/english/status/status-e.htm> (hereinafter UNCITRAL Status Page).
 Most of the following specific rationales provided come from Goode. See Goode, above n 1, 72-73.
 David, above n 2, 81.
 J S Hobhouse, ‘International Conventions and Commercial Law: The Pursuit of Uniformity’ (1990) 106 Law Quarterly Review 530.
 Stephan, above n 10.
 Goode, above n 1, 73-74.
 David, above n 2, 81.
 A significant exception was realised following adoption of the Model Law when the EU finally enacted its insolvency rules. Council Regulation (EC) on Insolvency Proceedings No 1346/2000 of 29 May 2000 (2000) OJ L160/1. Otherwise, prior to this perhaps the most notable exception was the treaty among the Scandinavian countries. 1933 Nordic Convention on Bankruptcy, 7 November 1933, 155 LNTS [League of Nations Treaty Series] 115, as amended 11 October, 1977 and 11 October, 1982.
 Cf, Robert K Rasmussen, ‘A New Approach to Transnational Insolvencies’ (1997) 19 Michigan Journal of International Law 1 (advocating a cross-border insolvency regime based on freedom of choice of insolvency law). Of course, debtors and creditors in all countries may circumvent formal insolvency proceedings by privately agreeing to bilateral debtor-creditor debt restructuring or collective workouts. However, no country known allows for a selection of substantive insolvency law beyond the options given by domestic law, once formal insolvency becomes necessary or is engaged.
 Guide to Enactment, above n 7, -; UNCITRAL Working Group V, 1996-99, <http://www.uncitral.org/en-index.htm> .
 See Harold S Burman, ‘Harmonization of International Bankruptcy Law: A United States Perspective’ (1994) 64 Fordham Law Review 2543.
 Guide to Enactment, above n 7, .
 Working Group V, above n 23.
 Guide to Enactment, above n 7, .
 United Nations, Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade, GA Res 52/158, UN Doc A/52/649, 15 December 1997.
 See eg, Sara Isham, ‘UNCITRAL’s Model Law on Cross-Border Insolvency: A Workable Protection for Transnational Investment at Law’ (2001) 26 Brooklyn Journal of International Law 1177; M Cameron Gilreath, ‘Overview and Analysis of How the United Nations Model Law on Insolvency Would Affect United States Corporations Doing Business Abroad’ (2000) 16 Bankruptcy Development Journal 399; Ronald J Silverman, ‘Advances in Cross-Border Insolvency Cooperation: The UNCITRAL Model Law on Cross-Border Insolvency’ (2000) 6 ILSA Journal of International and Comparative Law 265; Andre J Berends, ‘The UNCITRAL Model Law on Cross-Border Insolvency: A Comprehensive Overview’ (1998) 6 Tulane Journal of International and Comparative Law 309. But see Stephans, above n 10; LoPucki, above n 10.
 See eg, ‘Speakers in Legal Committee Welcome Adoption of UNCITRAL’s Model Law on Cross-Border Insolvency’, M2 Presswire (7 October 1997), 1997 WL 14465719 (noting support for passage of the Model Law by Germany, India, Paraguay [on behalf of the Rio Group], Finland [on behalf of the Nordic countries], Malaysia, Thailand, United Kingdom, Russian Federation, Italy, Slovak Republic, Hungary and France).
 See eg, Mary Hiscock, ‘Remodelling Asian Laws’ in Timothy Lindsey (ed), Indonesia: Bankruptcy Law Reform and the Commercial Court (2000) 28, 29 (collecting citations).
 UNCITRAL Status Page, above n 14.
 World Bank, 'Eritrea at a Glance', (2001) <http://www.worldbank.org/cgi-bin/sendoff.cgi?page=%2Fdata%2Fcountrydata%2Faag%2Feri_aag.pdf> (noting Ertrea’s population is 4.2 million, its GDP is $0.69 billion, its total exports are $20 million, and its total imports are $490 million).
 Law on Business Organisation Insolvency, Official Gazette of Montenegro, 8 February 2002.
 World Bank, 'Yugoslavia at a Glance', (2001) <http://www.worldbank.org/cgi-bin/sendoff.cgi?page=%2Fdata%2Fcountrydata%2Faag%2Fyug_aag.pdf> (Statistics for Montenegro, separate from it dominate sister-state of Serbia, are not available. Montenegro’s population is 680,000, Yugoslavia’s whole GDP is $10.9 billion, its total exports are $2,003 million, and its total imports are $4,838 million).
 Regarding Mexico see, Decreto por el que se aprueba la Ley de Concursos Mercantiles reforma el articulo ochenta y ocho de la Ley Organica del Poder Judicial de la Federacion [Commercial Insolvency Law], Diario Official, 12 May 2000; Eduardo Martinez, ‘The New Environment of Insolvency in Mexico’ (2001) 17 Connecticut Journal of International Law 75; Hale E Sheppard, ‘The New Mexican Insolvency Law: Policy Justifications for U.S. Assistance’ (2001) 6 UCLA Journal of International Law and Foreign Affairs 45; Josefina Fernandez McEvoy, ‘Mexico’s New Insolvency Act: Increasing Fairness and Efficiency in the Administration of Domestic and Cross-border Cases’ Part I, 19 American Bankruptcy Institute Journal 16 (August 2000), Part II, 19 American Bankruptcy Institute Journal 12 (September 2000). Regarding South Africa see, Cross-Border Insolvency Act 42 (2000); Alastair Smith and Andre Boraine, ‘Crossing Borders into South African Insolvency Law: From the Roman-Dutch Jurists to the UNCITRAL Model Law’ (2002) 10 American Bankruptcy Institute Law Review 135.
 World Bank, 'Mexico at a Glance', (2001) <http://www.worldbank.org/cgi-bin/sendoff.cgi?page=%2Fdata%2Fcountrydata%2Faag%2Fmex_aag.pdf> (noting Mexico’s population is 99 million, its GDP is $617 billion, its total exports are $158,443 million, and its total imports are $168,396 million). World Bank, ‘South Africa at a Glance', (2001) <http://www.worldbank.org/cgi-bin/sendoff.cgi?page=%2Fdata%2Fcountrydata%2Faag%2Fzaf_aag.pdf> (noting South Africa’s population is 43.2 million, its GDP is $113 billion, its total exports are $26,606 million, and its total imports are $27,324 million).
 One of the Japanese representatives to the UNCITRAL Working Group stated, ‘We think that the model law is so much influenced by the common law approach on several points that it is difficult for civil law countries like Japan to accept it to the letter.’ See Kazuhiko Yamamoto, ‘New Japanese Legislation on Cross-Border Insolvency – As Compared with the UNCITRAL Model Law’ (2000) 43 Japanese Annual of International Law 83, 85. This conclusion is even further circumspect when considering that majority of drafters of the Model Law were from Civil Law countries. See UNCITRAL <http://www.uncitral.org> (listing members of UNCITRAL who comprised the Working Group that drafted the Model Law).
 For comparison, the United States’ statistics alone are: population 284 million, GDP $10,171 billion, total exports $730,897 million, and total imports $1,180,497.
 Gaikoku tōsan shori tetsuzuki no shōnin enjo ni kan suru hōritsu [Law Regarding Recognition and Assistance to Foreign Insolvency Proceedings], Law No 129, 2000 (hereinafter LRAFI), translated at 43 Japanese Annual of International Law 331 (J Matsushita trans); <http://www.moj.go.jp/ENGLISH/CIAB/lrtr01-1.html> (J Matsushita and S Steele trans).
 Yamamoto, above n 38, 115. See also Shinichiro Abe, ‘Recent Developments of Insolvency Laws and Cross-border Practices in the United States and Japan’ (2002) 10 American Bankruptcy Institute Law Review 47, 83 ([The new Japanese law is] based mostly on the ‘UNCITRAL Model Law on Cross-Border Insolvency’); Mie Fujimoto and Shinjiro Takagi, ‘Japan’s New Law on Recognition of and Assistance in Foreign Insolvency Proceedings’ (2001) 20 American Bankruptcy Institute Journal 14 (August 2001) (‘Japan introduced new legislation to cope with cross-border insolvency issued based on the UNCITRAL Model Law on Cross-border Insolvency’).
 Foreign observers, most disappointingly including UNCITRAL itself, have unfortunately interpreted Japanese hyperbole and looseness in English language regarding the relationship between Japan’s new law and the Model Law to mean that Japan has ‘adopted’ the Model Law. See UNCITRAL, Status page, above n 14; E Bruce Leonard, ‘The International Year in Review’, 20 American Bankruptcy Institute Journal 34 (January 2002).
 Yamamoto, above n 38, 83-85.
 Model Law, art 21(2).
 In the original, ‘will’ is shō’nin no kettei wo suru while other section use ‘shall’ (shinakereba naranai, LRAFI, art 21) and ‘may’ (suru koto ga dekiru, LRAFI, art 5). One drafter asserts that the ‘will’ language is mandatory. Kazuhiko Yamamoto, ‘Gaikoku tōsan shori tetsuzuki enjo hō ni tsuite (1)’ [Concerning the law on recognition and assistance to foreign insolvency proceedings] (2001) 1194 Juristo 56, 60 (suggesting it is mandatory). However, informal conversations with Japanese practitioners suggest that they would challenge that understanding if necessary.
 LRAFI, art 31(2).
 Jay Westbrook, ‘Multinational Enterprises in General Default: Chapter 15, the ALI Principles, and the EU Insolvency Regulation’ (2002) 76 American Bankruptcy Law Journal 1, 24-26.
 Model Law, art 1(1)(c).
 LRAFI, arts 57, 59; Model Law, arts 28-30.
 LRAFI, art 57(1).
 Kent Anderson, ‘The Cross-Border Insolvency Paradigm: A Defense of the Modified Universal Approach Considering the Japanese Experience’ (2000) 21 University of Pennsylvania Journal of International Economic Law 679, 728-65.
 See eg, Minji saisei hō [Civil Rehabilitation Law], Law No 225, 1999, art 210.
 Stephan, above n 10, 758.
 Yamamoto, above n 38, 85.
 Anderson, above n 52 (discussing, in particular, Japanese court management of the Maruko cross-border insolvency in the early 1990s where the Japanese judge proposed and signed a jurisdiction sharing agreement with a Chapter 11 administering Bankruptcy Court judge in the United States).
 Ibid 728-65.
 Bankruptcy and Insolvency Act RSC 1985 pt XIII (Canada).
 Jacob S Ziegel, ‘Corporate Groups and Crossborder Insolvencies: A Canada – United States Perspective’ (2002) 7 Fordham Journal of Corporate and Financial Law 367; Jacob S Ziegel, The Modernization of Canada’s Bankruptcy Law in a Comparative Context’ (1998) 33 Texas International Law Journal 1; Jacob S Ziegel, ‘Corporate Groups and Canada-U.S. Crossborder Insolvencies: Contrasting Judicial Visions’ (2001) 35 Canadian Business Law Journal 459; Sean Dargan, ‘The Emergence of Mechanisms For Cross-Border Insolvencies In Canadian Law’ (2001) 17 Connecticut Journal of International Law 107; E Bruce Leonard and Melvin C Zwaig, ‘Developments and Trends in United States/Canada Cross-border Reorganisations’ (2000) 9 Journal of Bankruptcy Law and Practice 343; E Bruce Leonard, ‘Canada’s New Cross-Border Insolvency Legislation’ (1997) 16 American Bankruptcy Institute Journal 20.
 Ziegel, ‘Corporate Groups and Crossborder Insolvencies’ ibid 350; Leonard and Zwaig, ibid.
 New Zealand Law Commission, Cross-Border Insolvency: Should New Zealand Adopt the UNCITRAL Model Law on Cross-Border Insolvency? (1999) No 52.
 New Zealand Law Commission, Insolvency Law Reform: Promoting Trust and Confidence – an Advisory Report to the Ministry of Economic Development (2001) SP 11.
 Insolvency Act 2000 (UK) c 39, s 14.
 Consideration as to the effect of the Model Law provision (ibid s 14) is ongoing. Melanie Johnson MP, Speech to the Insolvency Lawyer’s Association 13 November 2002 <www.dti.gov.uk/ministers/speeches/MJohnson131102.html>.
 See Bankruptcy Reform Act of 2001, S 420, HR 333, 107th Cong, tit IV, subtit B; Bankruptcy Reform Act of 1999, S 625, HR 833, 104th Cong, tit IV, subtit B. The 1999 bill was vetoed by President Clinton on December 20, 2000. See ‘Legislation to Overhaul Laws on Bankruptcy Dies as President Fails to Sign It’ New York Times, 20 December 2000. The bill failed to emerge from joint conference committee in 2002. See Paul Wenske, ‘Congress Keeps Recycling Bankruptcy Reform Bill’, Kansas City Star, 8 December 2002, 2002 WL 101928616.
 Wenske, ibid.
 Compare Bankruptcy Reform Act of 2001, above n 65, with Model Law.
 See Stuart A Krause, Peter Janovsky and Marc A Lebowitz, ‘Relief Under Section 304 of the Bankruptcy Code: Clarifying the Principal Role of Comity in Transnational Insolvencies’ (1996) 64 Fordham Law Review 2591.
 See ‘Grassley Holds Hearing on UNCITRAL Model Law’ 31(21) BCD News and Comment (20 January 1998), available on LEXIS, Bankruptcy/Legal News database (quoting Westbrook as stating ‘[A] derivative of [current US cross-border legislation] should be fashioned to provide discretion to make leading edge decisions that go beyond the Model Law.’). LoPucki argues based on legislative history and intent, however, that section 1507(b)(4) will only be used when relief not provided by the standard Model Law provisions is sought. See LoPucki, above n 10.
 Draft Revised Bankruptcy Code, 11 USC s 1507(b)(4).
 See ‘Grassley’, above n 69.
 Commonwealth Treasury, Proposals for Reform – Cross-Border Insolvency, CLERP Paper No 8 (17 October 2002), <http://www.treasury.gov.au/contentitem.asp?pageId= & ContentID=448> .
 Ibid, Proposal 5C.
 Furthermore, the proposal’s express endorsement of Proposal 6B for adoption of the optional provision of art 13(2) which provides adoption does not affect the exclusion of revenue claims by a foreign state from insolvency proceedings indirectly undermines the progressive standard found in the current Corporations Act 2001 s 581 as interpreted by Ayers v Evans  FCA 213; (1997) 39 ALR 129.
 LoPucki has similarly characterised the American adoption of the Model Law: The Model Law is seemingly innocuous endorsement of international cooperation – what one Congressional staffer described as ‘feel-good legislation’ that would not really change anything. Perhaps because of that perception, the Model Law has escaped critical examination: adoption by UNCITRAL, recommendation by the National Bankruptcy Review Commission, and inclusion in the omnibus bankruptcy legislation. The House, for example, will hear from only a single witness regarding the UNCITRAL provisions. LoPucki, above n 10.
 Bankruptcy Act 1966 (Cth) s 29; Corporations Act 2001 (Cth) s 581; Ayers v Evans  FCA 213; (1997) 39 ALR 129. See also Kent Anderson, ‘Kokusai tosan ho-komon ro shokoku no keiken wo koryo shita teian’ [Cross-border insolvency-a proposal considering the experiences of various common law countries] (2001) 51 Hokkaido Law Review 1633, 1644-45, 1648-52 (discussing the Australian approach to cross-border cases and comparing with US, Japanese, and the Model Law’s approaches).
 Commonwealth Treasury, above n 72.
 Stephan, above n 10; LoPucki, above n 10.
 Asian Development Bank’s InsolvencyAsia, <http://www.insolvencyasia.com/insolvency_law_regimes/korea/section_p.html> , <http://www.insolvencyasia.com/insolvency_law_regimes/thailand/section_p.html> , <http://www.insolvencyasia.com/insolvency_law_regimes/indonesia/pdf/section_p.pdf> . Rumours of Korea’s consideration have floated. See Whon Il Park, ‘The Corporate Insolvency Scheme of Korea’ <http://onepark.netian.com/Engl/Insolregime.htm> .
 Sumant Batra, ‘Reforms in Indian Bankruptcy Laws’, INSOL World 8, 9 (January 2002) (‘At present, the Government is considering the adoption of the UNCITRAL Model Law on Cross-Border Insolvency to meet the demands of globalisation of economy and to deal with international insolvency’); Incorporating the UNCITRAL Model Law on Cross-Border Insolvency in India, in Reserve Bank of India, Standing Committee on International Financial Standards and Codes, Report of the Advisory Group on Bankruptcy Laws (vol 1, 2001) 54.
 See eg, Asian Development Bank, ‘Working Towards Bankruptcy Law Reform’ <http://www.adb.org/Media/Articles/2002/525_Bankruptcy_Law/default.asp> (2002).
 United Nations Convention on Contracts for the International Sale of Goods (New York, 1974) and as amended by the Protocol of 1980.
 Yamamoto suggests that Japan deviated in its law for procedural reasons such as the amount of discretion provided to judges under the Model Law compared to typical situations in Japan. Yamamoto, above n 38, 85.
 Bonnell, above n 11.
 Professor Westbrook states: ‘If [the United States] adopts the model law, it’s likely others will. If we don’t, it’s unlikely any other countries will. It’s crucial [the US] takes a leadership role.’ See ‘Will US Pass UNCITRAL’s Model Law?’ 31(16) BCD News and Comment (9 December 1997), available on LEXIS, Bankruptcy/Legal News database (quoting Westbrook, internal punctuation omitted). See also Peter J Murphy, ‘Why Won’t the Leaders Lead? The Need for National Governments to Replace Academics and Practitioners in the Effort to Reform the Muddled World of International Insolvency’ (2002) 34 University of Miami Inter-American Law Review 121.
 Stephan, above n 10, 758.
 See ‘Speakers in Legal Communities’, above n 30 (noting UNCITRAL Chairman requesting more funding for the promotion of the Model Law).
 UNCITRAL, Possible Future Work on Insolvency Law A/CN.9/WG.V/WP.50.