Malaysia Adopts Uncitral Model Law To Strengthen Insolvency Framework - Azalina

KUALA LUMPUR, Feb 25 (Bernama) – Malaysia has adopted the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency, marking a significant step towards aligning the nation’s insolvency framework with global best practices.

Minister in the Prime Minister’s Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said said the initiative will provide a clear, predictable, and fair process for handling insolvency cases involving multiple jurisdictions.

She said the adoption of the UNCITRAL Model Law also demonstrates Malaysia’s commitment to legal innovation and economic governance, shaping the country’s economic and legal landscape for years to come.

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“The Model Law will improve legal certainty, enhance global cooperation, and protect creditor rights. It will also boost investor confidence, showing that Malaysia is committed to fair, transparent, and efficient insolvency resolutions,” she said in her keynote address at the Malaysia Cross-Border Insolvency Conference 2025 here today.

Azalina stressed that a strong, transparent, and predictable insolvency system benefits businesses, creditors, investors, and the economy as a whole. However, she noted that legal reform alone is insufficient without effective collaboration among key stakeholders.

“We need collaboration between the government, legal experts, financial institutions, and industry players to ensure this system works,” she remarked.

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To ensure smooth and effective implementation, Azalina also announced the establishment of two key committees.

The committees are the Cross-Border Insolvency Reform Main Committee which will be responsible for setting policies and ensuring that Malaysia’s legal framework supports business and economic priorities; and the Cross-Border Insolvency Reform Working Committee will be led by the Legal Affairs Division (BHEUU) of the Prime Minister’s Department, comprising 20 key agencies and focusing on developing practical policies to integrate the Model Law into Malaysia’s legal system.

“With the guidance of these committees, Malaysia’s insolvency framework will become stronger, more efficient, and internationally respected.

“Moreover, by adopting this Model Law, we will not only ensure the protection of creditors and stakeholders but also foster an environment that inspires confidence, facilitates seamless international trade, and attracts global investment,” she said.

Azalina highlighted that in conjunction with Malaysia’s ASEAN Chairmanship, the government is taking a leadership role in promoting regional legal cooperation to strengthen the ASEAN economic ecosystem.

She said the upcoming ASEAN Law Forum 2025 will serve as a platform for legal experts, policymakers, and industry leaders from ASEAN member states and dialogue partners to discuss the harmonisation of insolvency laws across the region.

“A unified approach will make cross-border business easier, attract investors, and create a more stable financial environment,” she added.

The inaugural Malaysia Cross-Border Insolvency Conference 2025, themed ‘Navigating Cross-Border Insolvency: Challenges and Prospects for Malaysia’, was organised by the Malaysian Department of Insolvency (MDI) in collaboration with Insolvency Practitioners of Malaysia (IPAM), the Companies Commission of Malaysia (SSM), and the Malaysian Institute of Accountants (MIA).

The conference drew nearly 500 participants, including legal practitioners, economists, financial experts, academics, university students, and representatives from the public sector.

-- BERNAMA