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Welcome /  Blog /  2018-01-doc7 COMI of NIKI Luftfahrt Act 3

2018-01-doc7 COMI of NIKI Luftfahrt Act 3

The NIKI Luftfahrt saga unfolds itself rapidly. The Landesgericht of Korneuburg (in Austria) has announced on 12 January 2018 that it has opened main insolvency proceedings ('Hauptverfahren') for Austria's incorporated NIKI Luftfahrt GmbH. The decision is the third episode in this airline insolvency drama in Germany/Austria, after the 8 January 2018 decision of the Landgericht Berlin. In this decision a judgment of the District Court in Charlottenburg on 4 January 2018 (see http://www.bobwessels.nl/blog/nikis-comi, which decision confirmed the courts earlier decision of 13 December 2017) was overruled (see http://www.bobwessels.nl/blog/2018-01-doc3-nikis-comi-continued/). The Berlin court said, in my words (following the press release): that international jurisdiction is not in Germany, rather in Austria. Indeed, the Korneuburg court decides: 'The case concerns main proceedings ... The international jurisdiction is based on Article 3(1) EIR 2015'.
I make, in this phase, 2 short remarks:
1  It is still possible that the Berlin decision is overruled by the German Federal Court of Justice, therefore - the Berlin court said - the District Court Charlottenburg's decision still applies. As the Korneuburg court indicates, it is still possible to appeal its decision via the Austrian appeal system. If I see it correctly, now 2 main proceedings are pending, which will be particularly thrilling when both in Germany and in Austry the outcome is: COMI is in our jurisdiction so there are 2 main proceedings! As I explained in Wessels International Insolvency Law Part I 2017/10585 in Germany Article 102 § 3 InsO ('To prevent conflict of jurisdiction') applies. Article 102 § 3(1) provides that if a court in another Member State has opened main insolvency proceedings, a request to open such main proceedings in a German court must be disallowed for as long as the main proceedings in the other Member State are pending. The German legislator stresses that German courts must respect the judgment opening insolvency proceedings without materially testing such a judgment. However, in this case the German have been opened already. Two caveats here: (a) are the German proceeding opened, as I understand it is still a provisional one (vorläufig); it will depend on the interpretation of 'opening' in Article 2(7) EIR 2015, and (b) German rules to realise the smooth operation of the EIR 2015 (so also said Article 102) have been changed, see Madaus NZI 6/2017, 203, and another internal conflict rule may be applicable.
2 It makes me sad too read how courts operate regarding COMI of NIKI. The Berlin court says: as COMI is not in Berlin (wrong: COMI can only be in a Member State) or Germany respectively, international jurisdiction is rather (vielmehr) for the courts in Austria. The court goes beyond its authority or discretion, as only and solely Austrian courts can exclusively decide whether NIKI's COMI is in Austria. Or does the court hangs it head to its big brother in Berlin?

The court in Korneuburg dissappoints with its very short statement re COMI. Article 4 EIR 2015 ('Examination as to jurisdiction) says in paragraph 1: 'A court seised of a request to open insolvency proceedings shall of its own motion examine whether it has jurisdiction pursuant to Article 3. The judgment opening insolvency proceedings shall specify the grounds on which the jurisdiction of the court is based, and, in particular, whether jurisdiction is based on Article 3(1) or (2).' The court does not specify these grounds. Is Austrian insolvency law organised thus, that a specification to be expected later? Could, evidently within the short timeframe for rendering a decision, the court not have specified (remember the violent reactions in Germany after the court of Leeds' decision regarding 3 German Daisytek companies, having their COMI in the UK) that the place of the registered office shall be presumed COMI, having received no or at first sight unsufficient other indications? In view of the renewed system of the Insolvency Regulation, which can include certain out-of-court insolvency proceedings, it was necessary to introduce a careful examination of the COMI. In this respect, the court leaves the EIR 2015 in the cold.