In 2022, the Insolvency Service commenced a consultation with regard to the adoption of Article X of the UNCITRAL Model Law on Recognition and Enforcement of Insolvency-Related Judgments. Article X provides that, notwithstanding any prior interpretation to the contrary, the relief available under Article 21 of the UNCITRAL Model Law on Cross-Border Insolvency includes the recognition and enforcement of a foreign insolvency-related judgment. The FMLC responded to the Consultation, stating that the suggested implementation of Article X could create material uncertainty in the wholesale financial markets in particular in relation to its effect on the rule in Gibbs (the “Rule in Gibbs”). In 2023, the Insolvency Service published the outcome of the Consultation, stating that, following the arguments made by respondents about the need for greater clarity, before implementing the MLIJ, it would undertake further work to determine how legal certainty can be maintained and to settle the UK’s stance on the Rule in Gibbs.
This paper considers the Rule in Gibbs, emphasising its value and its practical use in the financial markets as a guarantor of legal predictability. It also discusses the alternatives to Rule in Gibbs, including Article X and how these differ to the current position under English law.