This item is provided by the institution :

Repository :
IHU Repository
see the original item page
in the repository's web site and access all digital files if the item*

2015 (EN)
Set–off and Insolvency Proceedings

Theocharopoulos, Thomas

The impact of the credit crunch, particularly after the collapse of Lehman Bros and the subsequent shortage of liquidity, makes set-off particularly relevant, for it can be used as a mechanism to evade all unwanted implications during an insolvency outburst. Hence, this dissertation has been designed with a view to giving the reader a brief overview of the theoretical approaches as well as the operation of set–off during insolvency proceedings. Besides its introduction, this dissertation has been divided into three main parts. First of all, Part I provides the reader with a proper “pairing”. On the one hand, it presents a basic outline of the various set–off classes across jurisdictions while, on the other hand, separates legal jurisdictions in “camps” that often do not agree on basic policies, so that a proper matching between the two is reached, ultimately giving the reader a chance to understand the pattern that arises throughout the world. At Part II, insolvency considerations kick in. It deals with the issue of set–off against insolvent parties placing a lot of importance on set–off requirements, while at the same time sheds light on parameters that seemed to have triggered the aforementioned different legislative choices. In this way, the reader is better oriented. Not only is he able to understand the various implications across jurisdictions but he is also better prepared in taking all necessary precautions so as to mitigate international legal surprises and legal risks. Finally, Part III addresses probably the most fundamental question: the applicable law. It is subdivided into two sections; it illustrates the way set–off has been dealt with by Courts, on the one hand, and Arbitration Institutions and Tribunals, on the other hand. Intricacies around this last topic are enormous. To keep this paper within practical limits, emphasis is given to the EU Insolvency Regulation and the UNCITRAL Model Law on Cross–Border Insolvency. In this perspective, the reader is offered an indicative demonstration concerning the various legal issues that arise in the context of judicial as well as arbitral proceedings on the occasion of a set-off plea. The relevant citation is selective: UNCITRAL Model Law on Cross–Border Insolvency barely touches set–off, making it difficult for an international lawyer to predict set–off effectiveness whereas EU Insolvency Regulation, while trying to take a Dissertation Page 5 more solid view, eventually adopts a comprehensive approach i.e. a dualistic criterion where set–off is governed by both the lex concursus and the lex causae which does not really dispel all relevant doubts. Having encountered these issues, it is perceived that the reader can easily adjust to whatever the applicable statute may be. An otherwise exhaustive citation of relevant applicable statutes would have not been similarly successful, as it would only “bombard” the reader with unnecessary information and would not bestow upon him/her the necessary method of critical thinking. It is the author’s fondest hope that the reader finds this paper as a meaningful comparative law approach; an essential introduction to the very basics of set–off, paving the way for further academic reading and writing since nowadays, set–off, as well as netting, have a tremendous impact on insolvency, on derivatives transactions as well as payment and securities clearing systems. This dissertation would not have been possible without Professor Kaissis guidance and expertise whom I especially wish to thank for giving me the opportunity to commend on this important subject matter. His valuable remarks work as a catalyst throughout the text of this dissertation.




School of Economic and Business Administration,LL.M in Transnational and European Commercial Law and Alternative Dispute resolutions

*Institutions are responsible for keeping their URLs functional (digital file, item page in repository site)