2 . 1 . TE RR I T O R I A L I T Y - U N I V E RS A L I T Y A N D P L U R A L I T Y - U N I T Y

In addition to the principles of territoriality and universality, a second set of concepts

is often used in discussing cross-border insolvency: plurality and unity. Kssentially,

these concepts refer to two related but distinct issues. On the one hand, they can be

applied to the question of whether insolvency proceedings are (or ought to be) administered

by multiple fora or by a single forum (plurality/unity of proceedings). On

the other hand, they refer to the question of whether a single law governs (or ought

to govern) all questions of insolvency law arising in insolvency proceedings, or whether

different insolvency laws should be applied (plurality/unity of law).

Intersentia 27

i rrom Mruggie to (.o-operation

Often the principle of territoriality is associated with plurality and the principle of

universality with unity, both in respect of law and proceedings."" Thus, the principle

of territoriality is understood to mean that the insolvency of a single debtor may be

dealt with in several independent fora, each applying its own insolvency law (at least

regarding the assets and liabilities found within its jurisdiction)."" Conversely, the

principle of universality is taken to imply that there is only one forum with jurisdiction

overall insolvency matters, the fonmi coiicursus, and that this fonmi coiicursus will

apply only its own law, the lex fori coiicursus, to all questions of insolvency law.

The use of the principles of territoriality and universality in this sense has been

criticised tor a variety ol reasons."" For instance, it has been pointed out that neither

principle in its pure form is encountered in the actual cross-border insolvency laws

of states.'' Moreover, in recent years in particular it has been emphasised that 'universality'

does not necessarily require unity; it may be reconciled with plurality of law

or proceedings, or even both.""' T h e question of universality should be to what extent

the creditors are to be dealt with and the debtor's affairs administered on a world-wide

basis. It should not necessarily follow that this must be achieved through a single

central forum, nor by means of the application of a single insolvency law.1"

Nevertheless, in discussing the basic structure of the cross-border insolvency dilemma

below, the principles of territoriality and universality are used in their extreme form.

Firstly, because that way they provide the sharpest contrast of the basic issues and

interests involved. Secondly, because even though their shortcomings are recognised

nowadays, it remains the case that the principles in their extreme forms have been the

two paradigms by means of which the dilemma has traditionally been analysed, and

responses by states to cross-border insolvency have been formulated.