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Welcome / Blog Archive / English / 2022-12-doc1 – Int’l jurisdiction under the EIR, ready for improvement

2022-12-doc1 – Int’l jurisdiction under the EIR, ready for improvement

Prior to 2017, courts in EU Member States (including UK pre-Brexit) have been rather lax and inattentive to verify a debtor’s international jurisdiction, giving room for especially individuals to manipulate COMI. Consequently, such judgments led to overstretching the public policy exception to refuse recognition.

Articles 4 and 5 of the EU Insolvency Regulation aim to resolve this with a careful examination of international jurisdiction. Both provisions have a solid ground in the principle of ‘mutual trust’ between the Member States. The Regulation does, however, not contain information duties. Article 4 leaves doubts whether the Regulation or national (procedural or insolvency law) of Member States should specify such duties, especially in relation to those insolvency proceedings that are or will be listed by a Member State in Annex A. A European regulation of information duties, including the sanction when these information duties are not followed should be the preferred course of action.

A five-step way to conduct examination by a court makes clear that Article 4 leaves doubts about the meaning of certain legal terms as well as the examination itself in relation to the presumptions in Article 3(1) as to where a debtor’s COMI is located.

A short analysis demonstrates that Article 5 is formulated too general, is poorly worded and leaves several questions unanswered.

This is the conclusion of my article ‘Judicial Test of International Jurisdiction under the European Insolvency Regulation’, in: International Corporate Rescue, Volume 19, Issue 6. 2022, pp. 301-307.