Continuation of book review; for the first part, see Bob Wessels’ blog 2026-10-02doc2.
Recognition of foreign insolvency proceedings
The dual treatment (EIR – UNCITRAL) continues with the category of the recognition of foreign insolvency proceedings, featuring excellent contributions by Kodek (pp. 399–406), Pieckenbrock (pp. 407–417), and Silvestri (effects on pending lawsuits, pp. 417–444), preceded by a comprehensive general report by Trunk and Silvestri, ‘Recognition of foreign insolvencies – general report’ (pp. 319–398). Various aspects are discussed in detail from the perspective of both regulatory frameworks, making this topic of particular interest to general specialists in private international law as well. I feel confident making this last recommendation, especially given that I have recently come across two new editions of private international law textbooks that completely ignore the subject of international insolvency law and their conflict rules. The reflections of the editors also offer insights into issues such as the significance of judicial discretion, considering that both the EIR and the MLCBI share the same objective and can function satisfactorily within a system. A notable overview in this regard is provided by Ngaundje Doris Leno in the regional report on the OHADA Uniform Insolvency Act (pp. 651–662).
The editors take a strikingly firm stance regarding ‘extraterritoriality’ in cases involving the recognition of foreign non-main (‘secondary’) proceedings, where the question may arise as to whether such proceedings can be given universal (extraterritorial) effect, for instance, by extending the scope of the non-main proceeding to include the debtor’s assets located ‘abroad’, provided the foreign ‘lex fori concursus’ so stipulates. The editors categorically reject this in principle. They provide several reasons, including (1) the state or country where such non-main proceedings have been opened typically lacks a substantial, close connection with the debtor. Given its generality, this is not the strongest argument. (2) Granting such extraterritorial recognition to non-main insolvency proceedings could destroy legal predictability and legal certainty i.e. expectations of the creditors (agree). (3) If a non-main proceeding with universal effect can be opened solely on the basis of debtor’s assets located in the state of opening, regardless e.g. of the existence of an establishment or the debtor’s COMI (e.g. just a small bank account present), then it is impossible to predict in advance in which countries insolvency proceedings may be initiated against the debtor and the law of which country will be applicable to the legal consequences of the opening of insolvency proceedings. I am inclined to agree, here. (4) The editors submit that it could be devastating especially for employees and other creditors with small claims, who generally will not have sufficient financial resources to effectively participate in foreign insolvency proceedings. Add to this hiring legal counsel due to unfamiliarity with the foreign language and legal system, and costs necessary for potentially contesting other creditors’ claims, and obviously, is the estate sufficiently large to cover these costs? Let alone that – rule of thumb – in 75% percent of the cases are (close to) assetless cases. They end this treatment with the remark that it might also be explicitly foreseen that Member States will have the right to recognize foreign non-main proceedings with universal effect on a discretionary basis, like Article 21 MLCBI.
Concurrent proceedings
The editors define two principal variants of concurrent (or parallel) proceedings: (i) proceedings in several countries concerning one single debtor, or (ii) concurrent proceedings concerning several debtors belonging to the same corporate group. The first variant has been recognized for over a quarter of a century, in both the EIR and the MLCBI. Concurrent proceedings involving members of corporate groups represent – in terms of legal treatment – a more recent phenomenon; they were incorporated into the EIR in 2015 with a specific set of rules (Articles 55–77 of EIR 2015) and regulated in 2019 under UNCITRAL’s MLEGI. The editors rightly observe that in European practice the EIR rules have barely been applied over the last decade or so and that the MLEGI has not yet been adopted by any country.
I get the impression that the editors are less familiar with the subject of group insolvencies. The contribution by Panzani and Van Galen, ‘Observations on cross-border group insolvencies’ (pp. 557–528), addresses the potential alignment of the EIR with the three UNCITRAL Model Laws, and specifically the piece by Miguens, ‘The UNCITRAL 2019 Model Law on (multinational) enterprise groups insolvency with Guide to Enactment: An example of legislative practicality, convenience and pragmatism’ (pp. 529–556). I particularly regret that none of the authors consulted the report on business rescue and insolvency that Professor Madaus and I prepared for the European Law Institute, which includes our 11 recommendations for improving the insolvency framework for members of corporate groups; see https://bobwessels.nl/blog/2017-09-doc3-eli-business-rescue-report-published/.
Miguens formulates 19 critical observations regarding the MLEG. The ideas expressed in these contributions will certainly play a role in the review of the EIR. If I see this correctly, the editors do not consider ‘parallel’ proceedings in international restructurings as have occurred the past years, in which the Dutch WHOA has played a significant role in the rise of this phenomenon of parallel restructuring proceedings. On the topic, see the inaugural address of Omar Salah in 2025, see https://repository.tilburguniversity.edu/server/api/core/bitstreams/5669187e-854e-41c8-8bc1-afce7e9b9021/content. Once again, it is striking that a strictly statutory approach predominates in most of the contributions. While this may be understandable in the context of traditional insolvency proceedings, there must surely be room for contractual solutions regarding the restructuring plans that have emerged in Europe over the last decade. And it is a pity that the editors express themselves only very sparingly on that matter. In my forthcoming book on Restructuring plans, I present as a recommendation that the EU and the Member States must ensure that courts in proceedings which run parallel in the court in a Member State and non-EU courts in relation to ‘insolvency proceedings’ as well as in ‘restructuring processes’ between the same parties on the same subject matter, should encourage the development of a set of guidelines to facilitate the coordination of such cases.
One of these issues is addressed in the excellent contribution by Nicoleta Mirela Năstasie, ‘Should issues of mutual exchange of information be addressed in future regulation on cross-border insolvency?’ Naturally, this topic extends beyond the group context. Given her experience as a judge, it is particularly insightful to read the improvements she proposes to make the standard rules on international communication (Articles 41–45 of the EIR; Article 25 of the MLCBI) more effective, and to see her advocate for the role of protocols – referred to as ‘insolvency agreements’ in UNCITRAL terminology – as one of the most important mechanisms in international insolvency. The editors tentatively endorse her suggestions. For instance, in concurrent proceedings, a limited scope for insolvency representatives to choose the applicable insolvency law should be introduced to facilitate the effective and fair regulation of the insolvency. The editors outline certain exceptions and allow for the possibility of court intervention. Recent academic research – specifically Walter Nijnens’ Erfurt PhD thesis, ‘Cooperation and Communication Obligations in European Insolvency Law’ (Deventer: Wolters Kluwer, 2023) – offered an opportunity to explore this topic in greater depth.
Overarching issues
The editors understand under the last segment of their publication, called overarching issues, certain matters which typically arise both in domestic proceedings, in recognition and in concurrent (parallel) proceedings and which deserve, from the editors’ view, an overall analysis looking at the topic in a consolidated manner both under the perspective of domestic proceedings and of recognition and in concurrent proceedings. Some of these overarching topics are addressed separately, but it turned out to be difficult to follow the structure of the book, because some topics were so closely related with each other across the different procedural constellations that the editors decided to deal with them in a general, overarching manner. They draw conclusions on three themes.
In the area of conflicts-of-law the editors propose, for the purposes of future EU provisions on cross-border insolvency relations with non-EU countries to keep in principle to the ‘bilateral’ approach of the EIR. They do, however, add the possibility of a mitigating (discretionary) clause for the effects of foreign (non-EU) insolvencies. This would align such EU rules with the already mentioned draft UNCITRAL Model Law on Applicable Law in Insolvency Proceedings and avoid contradictions between the effects given to the foreign insolvency proceedings by its own rules and the effects agreed to it by the recognizing court. They reject the method proposed by Fabriès-Lecea (pp. 59-74) to ‘universalize’ the EIR’s conflict-of-laws rules. She did also propose to admit renvoi when the conflicts rules lead to a non-EU country. I am in favour of her approach, be it that I still need to give further thought to the tricky ‘renvoi’ problem.
On the latter conflicts-of-law rule in the EU, the editors strongly support the competence of the Member States. Each country should decide which of its proceedings should have universal or territorial scope, if it is not based on COMI, and what this would mean in concrete circumstances. The EU should grant foreign non-main proceedings only territorial effect but might give Member States the right to recognize also universal effects of non-main proceedings, e.g. on a discretionary basis, such as provided by the MLCBI. They recognize that this may lead to differentiated solutions. They give the example that the EU might decide to exempt third parties rights in objects located in the EU from any effects of non-EU insolvencies (as is the case with Article 8 EIR 2015 (rights in rem) for inner-EU cases) but may apply general rules of insolvency law to such objects located outside the EU. They note that such an approach is not uncommon in autonomous laws. But rightly, they signal that a way of regulating may be regarded as discriminatory from an external perspective. The editors would generally recommend avoiding such substantive carve-outs according to the location of object and apply instead a conflict-of-laws approach.
I will agree with the editors on another topic. The EIR has specific rules for ‘foreign’ creditors but defines them in a limited way: foreign creditors are only creditors resident or domiciled in the EU, see Article 2(12) EIR. With them I would like to emphasize that in modern cross-border insolvency law (where these laws are not fully an equivalent of ‘public’ law), foreign creditors usually get equal treatment with domestic creditors. Such an approach expresses a fundamental tenet of the modern era in terms of the application of remedies and standards of treatment on a basis of equality before the law. In the field of international insolvency this principle bears a special significance in relation to the concept of pari passu distribution of the assets among creditors, and likewise in relation their eligibility to participate fully and effectively in the relevant proceeding, whether its purpose is liquidation or restructuring of the debtor’s estate. In terms of substantive rights of participation, the provisions of a state’s insolvency law should be applicable on a non-discriminatory basis to all persons occupying the status of creditor by virtue of their having some kind of claim against the debtor. This rule is recognized as principle 11 (‘Non-discriminatory Treatment’) of the Global Principles for Cooperation in International Insolvency Cases, Report to the American Law Institute (2012), published by ALI, available at: http://www.iiiglobal.org/component/jdownloads/viewdownload/36/5897.html, drafted by Ian Fletcher and me, and promulgated by ALI and III (International Insolvency Institute).
The editors recommend including also creditors resident or domiciled outside the EU into the Article 2 EIR-definition. The right to lodge claims in insolvency proceedings against the debtor, as provided for in Article 53 EIR, should in fact cover all foreign creditors, regardless of whether they have their habitual residence, domicile, or registered office in a Member State or in some third country. Without the duty of the court or the insolvency practitioner to notify all creditors of the opening of insolvency proceedings, creditors may not be able to exercise their right to participate in the insolvency proceedings. Therefore, the more appropriate solution is contained in Article 14 of the MLCBI, which requires that notice of the opening of insolvency proceedings be given not only to creditors in the State where the proceedings are opened, but also to known creditors who do not have an address in that State. See also the rich contribution by Jasnica Garašić, ‘Informing foreign creditors of the opening of insolvency proceedings’ (pp. 293-317). And how to deal with the definite possibility that certain creditors are granted a privileged status in the insolvency proceeding, e.g. as secured creditors, employees, tax creditors or other creditors with public claims? The editors would recommend leaving this to applicable insolvency law provided that the basic EU freedoms or the European Charter of Fundamental Rights are not violated.
Finally, under the heading of ‘Particular subject areas’, the editors address three topics, which I briefly outline here:
- Insolvency-related court proceedings. The editors propose using the provisions of the EIR as a starting point for relations with non-EU countries as well and aligning them with the MLIJ. This entails distinguishing between – and clearly defining – ‘core’ insolvency decisions or sub-proceedings, proceedings that are ‘closely insolvency-related’, and proceedings that are ‘distantly (or loosely) insolvency-related’ (compare the framework of Articles 6 and 32 of the EIR 2015). Numerous specific details are proposed within this framework. For much more on this, see Alexander Trunk, ‘Insolvency-related proceedings in cross-border cases – with specific regard to relations between the EU and third countries’ (pp. 557–582). For many academics, these insolvency-related proceedings represent a true paradise – and a major challenge – when it comes to working out legal classifications in minute detail. I regret that CERIL Statement 2021-1 on identifying annex actions under Article 6(1) of the EIR 2015 was not consulted here; see https://www.ceril.eu/news/ceril-statement-2021-1-on-identifying-annex-actions-under-articl.
- Alternative dispute resolution (arbitration and mediation) in cross-border insolvency law.
The editors naturally signal that neither the EIR nor the UNCITRAL model laws mention mediation; they only address arbitration, and just only in the conflicts-of-law context (the effects of recognition upon pending proceedings abroad, in that of the law governing the proceedings (lex fori concursus) should not apply to arbitration proceedings. They are right in noting that both instruments neglect highly significant issues, such as the law governing arbitrability and the effects of insolvency upon arbitration agreements, as well as the recognition of arbitral awards made in insolvency related disputes. If I see this correctly, they wish to await developments within UNCITRAL Working Group V on the issue of applicable law and think it is too premature to address the relationship between ADR and third-countries insolvencies in much detail. Nevertheless, they provide direction for the EIR review process, advising setting out consistent rules on arbitration and/or mediation, regardless of their inner- or outer-EU dimension. They acknowledge that in practice, parties resort to mediation and arbitration to handle insolvency-related disputes due to their numerous advantages (confidentiality, speed, cost-efficiency, flexibility etc.), and legislators (including the EU) in recent times have included elements of mediation into restructuring frameworks. Contributions providing additional detail in the report are provided by authors much involved in the subjects, Vesna Lazić, ‘Arbitration and insolvency: is there a ‘conflict’ and if so, how should it be resolved?’ (pp. 583-608), and Defne Taşman, ‘Mediation in cross-border insolvencies’ (pp. 609-641). After the copy submission deadline, the latter defended in August 2026 at the University of Antwerp her PhD titled ‘Mediation within the European Union Preventive Restructuring Framework: A Comparative Analysis of the Frameworks of the European Union, Belgium, France, Italy, and the Netherlands. It contains welcome pieces of typically comparative law, hardly on cross-border matters.
- Information technologies in cross-border insolvency law. This topic contains a short piece of Alexander Trunk, ‘Information and communication technologies in cross-border insolvency – A brief look’ (pp. 643-647), who notes that for the purposes of cross-border insolvency law specific rules on the use of ICT in cross-border insolvencies are difficult to design. Already in a national context it is bothersome, see the Insolvency Rules 2016 (England and Wales) and these Rules from 2018 (Scholand), under review, https://www.gov.uk/government/consultations/second-review-of-the-insolvency-england-and-wales-rules-2016-and-the-insolvency-scotland-company-voluntary-arrangements-and-administration-rules-2018-/second-review-of-the-insolvency-england-and-wales-rules-2016-and-the-insolvency-scotland-company-voluntary-arrangements-and-administration-rules#section-3-future-proofing. The latter section consults on technological resilience (including cloud-based records).
Presently, Trunk submits, that the starting point should be the existing provisions of the EIR and other EU insolvency legislation as well as EU international civil procedure legislation. The EU should provide in a future instrument on relations with non-EU insolvencies the possibility of cooperating also with non-EU countries on a non-discriminatory and proactive basis. The editors suggest that this should include the authorization of the European Commission to pass secondary legislation to this effect.
Summary
The editors (pp. 938–939) arrive at a summary of their findings. When systematized, these boil down to two core ideas.
1There is a serious need for the EU to develop common and consistent rules on cross-border insolvency law in cases related to non-EU countries. This general – and unsurprising – finding is reinforced by pointing to relations with the EU’s close economic partners, such as Switzerland, the UK, and the US; however, the need for an adequate legal framework is not limited to these countries. The editors refer to insolvencies in China, Türkiye, India, Canada, Brazil and offshore jurisdictions are also playing an increasingly significant role for the EU. This selection is somewhat unsatisfactory. The issue is certainly not just about this ‘growing role’; it is also – and decisively – about providing a predictable and coherent set of rules to the whole of the international business community, wherever it is geographically located. Mention must also be made of the EU’s own geopolitical interdependence and its recent pursuit of trade agreements with Latin America (Mercosur), CPTPP countries (including Australia), and – since September 2026 – Canada, and who knows in the very near future the UK. See the notices of intent to enter into a sort of economic relation appearing in this week’s papers. The familiar ‘Western’ business world is being reshaped, altering global trade engagement and increasing access to new markets. In a world where continental blocs are reshaping the landscape of trade and investment, these agreements need to be supplemented by the possibility of including a system to address also restructuring and insolvency. The editors argue that by establishing a balanced, high-quality legal foundation for such situations, the EU ‘… can improve its role in the cross-border insolvency world and also influence discussions within UNCITRAL with a view to further improving the global legislative framework.’ Does this approach not focus too heavily on the potential ‘political gain’ of regulation? Surely that is secondary to the need to minimize complications and obstacles within national regulatory systems, for the benefit of global business and cross-border trade and investment.
2 The editors propose to create a set of binding rules – if there is EU competence for such legislation – addressing relations with non-EU countries in cross-border insolvency matters. If such rules were to be passed, the editors would favour a solution to add to the EIR a new Chapter on relations with non-EU countries, which should be aligned as far as possible with all UNCITRAL model laws in this field.
However, as the UNCITRAL model law family is itself under continuous development, to point at the other side of the coin: the EIR can also give some further input into UNCITRAL’s work and there is also room for specific new approaches developed by the EU. In addition, room should be left for EU Member States to specify EU common rules in certain aspects or to be more cooperation-friendly under autonomous rules than the common standards may require. Even if the EU were not to pass a legislative act on this matter, they continue, it should at least prepare recommendations on minimum standards that the autonomous international insolvency law of each Member State in relation with non-EU countries should certainly include. It not al hard law that counts. They conclude that whatever common rules may be passed, they should not exclude developing cooperation-friendly practice further based on recommendations or other soft law instruments, taking into account also UNCITRAL’s continuous work.
Conclusion
I will conclude here. Little attention has been paid to the two proposals that where newly introduced in the EIR 2015, group insolvency and the instrument of the ‘undertaking’ within the meaning of Article 36. The uncooperative attitude of insolvency practitioners, combined with the costs and time associated with group coordination proceedings (and the limited powers of a group coordinator), has resulted in this piece of legislation simply not being used. The undertaking is mentioned in passing by Block-Lieb and Paulus (p. 129) as well as by Panzani and Van Galen (p. 520) – and contrasted with Article 30 of the MLEG; see also Miguens (p. 549) – but the excessively detailed regulation of the undertaking (starting in the original draft-version with two subparagraphs and ending with no less than eleven) demonstrates how a potentially useful practical tool was stifled by European policymakers. With more thorough consideration in this book, both aspects (again ‘new’ in 2015) could have assisted the EIR’s legislators, i.e. the tripartite of the Commission, the European Parliament and the Council, the latter being heavily influenced by national interests.
Since the late 18th and during the 19th century, the sovereign territorial nation-state – whose legitimacy rests on representing a specific nation – has become the dominant organizational model for international politics. It is interesting to read Doris Leno’s account of the OHADA treaty’s creation, which highlights a key lesson: states must be prepared to cede a portion of their sovereignty. No matter how you look at it, on these two topics EU policy has suffered a defeat here, to use the project’s own terminology. Regarding both issues, was the everyday reality misjudged, or did the political establishment overplay its hand? To ask the question is to answer it.
As I previously indicated, my overall view of the study is not entirely positive, I refer to the earlier comments regarding the dual-track EU-UNCITRAL treatment and the choice of ‘reflections’ rather than recommendations. Of course, one never knows what fell by the wayside during the years the project was underway, but I found the absence of contributions concerning Singapore (a growing hub in cross-border restructuring and insolvency in Asia) and Australia notable. I recently read that Malaysia with its new Cross-Border Insolvency Act 2026, was guided primarily – given its history rather obviously – by UK regulations, but also by those of Singapore, Australia, and New Zealand. These region could have provided inspirational power, for sure.
Furthermore, it is undeniable that during the drafting phases of the Model Laws, and especially the MLCBI, the perspective of so-called developing countries was considered by only a few. Current theories and rules in the three Model Laws have been developed and addressed almost exclusively from the viewpoints of these economies. When considering less developed or least developed economies (e.g., in the sub-Saharan region), the Model Law’s policy objectives reflect almost solely the perspective of globalized companies and multinational corporations. They do not seem equally suited to economies with a different type of development – characterized by micro and small businesses – and a more limited degree of integration into the global economy. I am thinking of small businesses trading in border regions that expect a simple arrangement with just that specific neighbouring country. Moreover, UNCITRAL does not have a monopoly in the cross-border field. Fresh ideas – which the editors called for – have existed for some three decades, usually embodied in soft law documents. Kodek, ‘Recognition of third-country insolvencies in the EU’ (transcript of his contribution, pp. 399–406), explicitly draws attention to these ‘sources of inspiration’.
The selection of literature used is not fully ideal. I make no issue of the absence of literature in Spanish, Italian, or French literature (the latter with one exception, fortunately also translated in English). While those sources might well contain excellent ideas, that is simply a reality for anyone interested in ‘global’ law: there are many languages one does not master sufficiently, or at all. However, I do miss accessible recent literature offering new insights, such as the commentary on the EIR by Cuniberti and Leandro (eds.) (https://bobwessels.nl/blog/2024-07-doc5-cuniberti-and-leandro-eds-a-new-commentary-on-the-european-insolvency-regulation/), Leandro’s fine book on international jurisdiction in the EU (https://bobwessels.nl/blog/2025-08-doc5-jurisdiction-in-eu-cross-border-insolvency-law/), the work by Vatermoli et al. and Kokorin-Wessels on protocols (https://bobwessels.nl/blog/2021-06-doc5-to-protocol-or-not-to-protocol-insolvency-law/), or Boon’s PhD thesis on the rather recent phenomenon in Europe, debtors-in-possession (https://bobwessels.nl/blog/2025-08-doc1-is-the-dip-here-to-stay/). I will leave it at that.
I am reaching the conclusion of my review of the book, which has expanded into an essay simply because the contributions all demonstrate a desire to foster ongoing improvements (both general and, at times, detailed) to the international regulatory framework governing cross-border insolvency and restructuring law. As trade and investment increasingly encompass more countries, these nations, sometimes within a regional economic bloc (e.g., the EU), find themselves increasingly reliant on one another to uphold core values such as predictability and certainty, as well as to safeguard specific interests. It is impossible to do full justice to the multitude of contributions; the reader is presented with a wealth of information. It is right that the editors note that there are other numerous topics that could not be addressed (such as connections to other areas of law, including employment law and environmental law; p. 54).
In the ‘Reflections’ section, which I focused on particularly, many individual proposals receive scant attention. I am referring here to the ‘suggestions for further action’, for instance regarding domestic proceedings (Trunk, p. 248), parallel proceedings (Trunk, p. 477), and insolvency-related judgments (Trunk, p. 577). Users would therefore do well to pay attention to these proposals as well.
With these caveats in mind, there is much to be gained for legislators, academics, and insolvency practitioners alike who wish to incorporate multiple perspectives into their work. They could all benefit greatly from what the book offers: its expertise, experience, and fresh insights and ideas. The work offers a wealth of information, ranging from historical background to practical considerations regarding the application of the subject matter. A global perspective resonates throughout all the contributions. Anyone wishing to embark on a journey toward the improvement, deepening, and unlocking of existing rules and concepts will find an articulate guide in this book. As said, the book appears just in time for the EIR review; it certainly deserved a prompt review. May this project contribute to enriching the regulatory framework of what is so close to the hearts of all who are concerned, in the short term (EIR review) as well as the long term, with the growth and deepening of a well-balanced framework for cross-border restructuring and insolvency law.
Alexander Trunk, Jasnica Garašić, Kevin Silvestri, EU International Insolvency Law and Third Countries. Which Way(s) Forward? Baden-Baden: Nomos 2026, ISBN 978-3-7560-2159-8.
Note: this book I received free of charge from the publisher with the request to announce it or to review it on my blog at www.bobwessels.nl.