Mauritius Set To Adopt New Insolvency Legislation

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

10 May 2004

Speaking at a recent seminar on the Report on the Observance of Standards and Codes, Mauritian Industry, Financial Services and Corporate Affairs Minister, Sushil Khushiram revealed that the government is currently examining the creation of a new insolvency bill.

Curently, corporate and individual insolvency is dealt with under the 1984 Companies Act, the Bankruptcy Ordinance (for commercial enterprises), and the 1982 Insolvency Act (for non-commercial enterprises).

However, Mr Khushiram explained to delegates that:

"We need an effective insolvency system that is supported by a strong and comprehensive legislation, which not only defines the rights and obligations of creditors and debtors, but also sanctions those who abuse the system."

Speaking on the same topic, World Bank representative, Gordon Johnson stressed that:

"The challenge today is to develop effective credit and corporate recovery systems that enable stakeholders to take prompt corrective actions to mitigate the downside impact of corporate financial distress and insolvency. These systems are vital to creating strong credit cultures and investment climate and must evolve to meet the needs of modern business today."

In addition to the planned establishment of an Insolvency Office to issue licences and publish the relevant codes and directives, Mr Khushiram revealed that he will be raising the possibility of establishing a commercial court with Justice Minister Emmanuel Leung Shing.

Such an institution, according to the Industry Minister, "will have the added advantage of specializing in insolvency matters, while at the same time reconciling the specificities of the industry".

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