The guide was designed for policymakers as well as businesses and their advisors
The Asian Business Law Institute (ABLI) and the International Insolvency Institute (III) today released the Guide on the Treatment of Insolvent Micro and Small Enterprises (MSEs) in Asia.
The guide identifies five key principles for immediate adoption by jurisdictions as building blocks of a well-functioning MSE insolvency framework, and six aspirational principles that should ideally be considered and adopted by jurisdictions over the longer term to provide MSEs with a more comprehensive legal and institutional environment to deal with financial distress.
“MSEs lie at the heart of a healthy economy, and are key drivers of employment, economic growth and development,” said John Martin, President of the III. “The health of the sector contributes to both the economic and social wellbeing of a nation’s population. But, as the pandemic has demonstrated, good leadership and management of a small or micro business may not be sufficient to insulate it from the many and varied challenges of modern commercial life. It is essential that there is a framework to deal with financial distress in the MSE sector. I am delighted that III has again partnered with the Asian Business Law Institute to prepare and now publish a set of principles for designing and embedding a robust and effective legal and institutional framework that will benefit all jurisdictions in Asia.”
Designed for policymakers as well as businesses and their advisors, the guide is drafted by assistant professor of law Aurelio Gurrea-Martinez of the Singapore Management University with input from academics, policymakers and practitioners across the Asia-Pacific, including those from Australia, Brunei, Cambodia, China, Hong Kong Special Administrative Region of China, India, Indonesia, Japan, Malaysia, Singapore, South Korea, Thailand and Vietnam.
The guide also benefits from III's global reach of internationally renowned experts from countries such as Canada, Germany, Italy, the Netherlands, United Kingdom and United States who shared their insights and expertise.
International organisations like INSOL International, the United Nations Commission on International Trade Law and the World Bank were also consulted during the almost year-long drafting process.
“ABLI continues its partnership with the III on the critical task of detailing principles to promote convergence of the rules on corporate restructuring and insolvency in Asia,” said Rama Tiwari, chief executive of the Singapore Academy of Law, ABLI's parent organisation. “Given the indispensable role played by MSEs in promoting economic development and creating employment opportunities in Asia, it is timely for the guide to zero in on MSE insolvency and with principles that will hopefully contribute to more effective treatment of insolvent MSEs in Asia.”