The international insolvency law is based on two main principles – the principle of universality and the principle of territoriality. Under the principle of territoriality, the insolvency proceedings shall be limited to the assets located in the state in which the proceedings were opened. In light of the principle of universality, there is one single insolvency proceeding which shall affect all assets of the debtor and shall be governed by one national law. The universalism ensures efficiency and economy of the insolvency proceedings. On the other hand, due to widely differing national insolvency laws the application of universality without exception may cause difficulties. Therefore, European insolvency law is based on the modified universality which is a compromise between these two main principles. The article aims to outline the theoretical basis of these principles and analyze their concrete manifestations within cross-border insolvency proceedings.