Cross-border Insolvency Bill

by HIDAYATH HISHAM

THE Cross-border Insolvency Bill 2025 was tabled for its first reading in the Dewan Rakyat today, aimed at strengthening Malaysia’s legal framework for dealing with international bankruptcy cases.

Minister in the Prime Minister’s Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said (picture) said the bill’s second and third readings are scheduled to take place during the current parliamentary session.

The bill provides for access by foreign representatives and creditors to Malaysian courts in cross-border insolvency matters.

According to the tabled draft, the legislation also outlines mechanisms for recognising foreign insolvency proceedings, granting related relief, enabling cooperation between domestic courts and foreign representatives, and coordinating concurrent proceedings across jurisdictions.

“This bill is based on the principles of the Model Law on Cross-border Insolvency adopted by the United Nations Commission on International Trade Law (UNCITRAL),” the bill reads.

Its implementation is expected to incur additional financial costs, though the amount has yet to be determined.

Previously, the media reported that the legislation aims to help Malaysian companies recover overseas assets in efforts to restructure or rescue businesses facing insolvency.

To date, 60 countries have adopted the UNCITRAL Model Law on Cross-Border Insolvency (MLCBI), first introduced in 1997, including Australia, the UK, Saudi Arabia and New Zealand.

Malaysia will be the fourth ASEAN country to adopt such legislation, following Singapore, Myanmar and the Philippines.