EIR 2000. Nearly 25 years ago, it was a breakthrough in the rather terra incognita field of international insolvency law in Europe. Indeed, there was a draft treaty that had been worked on for more than 30 years – with ups and downs. For political reasons that draft faded into the background, however, large parts of its contents could be introduced 5 years later, now in the form of a directly and automatically effective Regulation. And there it was: the first major instrument dealing with cross-border insolvencies in the European Community (EC, as it was called then), the European Insolvency Regulation (EIR 2000). It was adopted in 2000, entering into force on 31 May 2002 and directly – without the need for national implementation – applicable in all Member States, except for Denmark.
Its system. The Regulation contained uniform rules on international jurisdiction, recognition of insolvency judgments and applicable law in insolvency matters. Most importantly, it established that (main) insolvency proceedings can be initiated at the place of the debtor’s centre of main interest, or COMI. Such proceedings have universal scope and encompass the debtor’s assets throughout the EU. The EIR 2000 also prescribed that the law of the state of the opening of insolvency proceedings (‘lex concursus’) shall determine the effects of such proceedings. The system of the EIR 2000 was not purely universal, as it provided for the possibility of opening secondary (territorial) proceedings in the Member State where the debtor had an ‘establishment’ and the coordination between main and secondary proceedings. However, unlike main insolvency proceedings, secondary proceedings could cover only assets falling under their limited geographical scope. Note the odd situation, one insolvent debtor, and two (or more) proceedings to deal with the administration of this one debtor’s assets. The link between the two proceedings is the mandatory duty at the time (Article 31 EIR 2000) that the appointed ‘liquidators’ in both types of proceedings were duty bound to cooperate and to coordinate the administration of the insolvent estate.
The model of the EIR 2000, therefore, does not reflect ‘mitigated’ universalism, rather ‘coordinated’ universalism.
EIR Recast. Some 15 years later, the EIR 2000 was generally regarded as an effective tool in dealing with cross-border insolvencies within the European Union (the EU, as it was renamed). A leading role has been played by the European Court of Justice (ECJ), since the Lisbon Treaty of 2006 called Court of Justice of the EU (CJEU). The Court has ensured the Regulation’s efficiency by clarifying many of its concepts, including ‘COMI’ and ‘establishment’. Then, so 15 years later and with the addition of 10 other EU Member States, it had been found necessary that further improvements should be included to better suit evolving business and technological trends. As of 26 June 2017, a renewed European Insolvency Regulation (EIR Recast) entered into legal force. It is strongly vested on the EIR 2000’s building blocks (COMI, lex concursus, main and secondary proceedings).
Novelties. The EIR Recast also included new rules. For instance, the EIR Recast expanded in scope to cover various hybrid and pre-insolvency proceedings that entail the restructuring of the debts of a company, rather than the company’s liquidation. It also enhanced the application of the COMI presumptions for the purpose of battling abusive insolvency forum shopping. The EIR 2000 provisions on communication and cooperation were extended to bind courts and insolvency practitioners dealing with them. Among the major changes, brought by the EIR Recast, is a whole new chapter related to groups of companies, which can now fall under the special ‘group coordination proceedings’ regime. And, the EIR Recast should make the life of creditors easier in several respects. First, it mandates the creation of a central electronic access point to the information contained in national insolvency registers (whose establishment is now obligatory). This will allow creditors to monitor their debtors by searching in a single search engine at the European e-Justice Portal. Second, it sanctions the use of standard forms, such as standard notice and standard claims forms. These developments should make insolvency proceedings more open and transparent, as well as reduce costs of participating in them.
Commentaries. When the Recast came alive, some seven years ago, a gulf of commentaries appeared. I reviewed some of them, see e.g. https://bobwessels.nl/blog/2020-12-doc4-new-books-on-european-insolvency-regulation-recas, t-2015-848/, https://bobwessels.nl/blog/2022-11-doc2-second-ed-of-bork-mangano-european-cross-border-insolvency-law/; https://bobwessels.nl/blog/2022-01-doc5-twenty-years-eu-determined-cross-border-insolvency-law/. The 4th edition of my own book (‘International Insolvency Law’) appeared in 2017, and five years later, with German colleague Stephan Madaus as co-author, I wrote in 2022 the 5th edition of this book, see https://shop.wolterskluwer.nl/International-Insolvency-Law-Part-II-sNPINTINSL/. I even compared some of these commentaries with each other https://bobwessels.nl/blog/2020-12-doc4-new-books-on-european-insolvency-regulation-recast-2015-848/
Cuniberti-Leadro Commentary. In June 2024 a new article-by-article commentary edited by professors Gilles Cuniberti (University of Luxembourg) and Antonio Leandro (University of Bari Aldo Moro) was published. I am uncertain why it was published in this period of this year, as there is no preface. CJEU courts cases have produced just a meagre harvest in the last three or four years. The revision of the Recast itself is not scheduled until 2027. The Commission will have its hands full to deliver a tangible result coming from its harmonisation of national insolvency laws-initiative, launched in December 2022, see https://bobwessels.nl/blog/2022-12-doc3-harmonisation-of-corporate-insolvency-law-in-the-eu-some-background/. All this does not alter the fact that the book is certainly welcome. There are several aspects that makes reading of this publication valuable.
Some key features. Altogether, including the editors, 16 authors contributed to the Commentary. A majority comes from countries where the insolvency regulation is of course written and thought about, but where little English-language literature appears (or is difficult to find). Most discussions regarding the separate articles in the book include numerous footnotes that also refer to this literature (e.g. Belgium, the Netherlands, France, Italy, Germany, Poland) or discuss views expressed in this literature. What is also striking is that the element of private international law is receiving more emphasis. That, of course, is not strange for a book that appears in the series ‘Elgar Commentaries in Private International Law’, but not in all commentaries that I have viewed this element is more strongly present than in other commentaries. The PIL accent appears for example in the commentaries on several procedural-type articles, with the including of references to several Brussels regulations (Ibis, II Ter, Matrimonial Property) (Cuniberti).
The treatment of most articles is systematic, highlighting and discussing details, with – in footnotes – references to case law (CJEU, national case law), recitals, literature, cross-references to elsewhere in the book. And, still, a lot of attention to the historical genesis of the Regulation. Are the historical considerations from 25-30 years old still relevant where the European Community has grown into a European Union? And where the purpose of several provision should be seen in a slightly different light than over two decades ago, where policies with regard to thinking about businesses in financial distress have gradually changed from creditor-oriented hard-core liquidation to debtor-oriented restructuring in an aim to keep the business alive? The article-by-article treatment also took boundaries into account. For example, comparisons to UNCITRAL soft law documents have been limited. The eternal battle as to whether a particular national procedure is an insolvency procedure within the meaning of Article 1(1) or whether it falls under Annex A is becoming clearer for some procedures, due to the nationality of the authors (those from France and Italy). It would have helped to have all authors indicate which national proceedings are covered under Annex A. A fairly new phenomenon such as ‘bitcoin’ and ‘cryptoassets’ is briefly discussed in the commentary on the definitions of Article 2 and also in passing in the commentary on Article 12.
Treatment. In certain cases, the treatment (through references or discussion) is far-reaching, for example by processing the reports of the independent think tank Conference on European Restructuring and Insolvency Law (CERIL) in various places (for all reports, see www.ceril.com). I am also thinking of Article 2 on the localisation of assets, including a discussion with Laukemann’s deviating concept of allocation of assets (Struycken), the proposal for a new, balanced text for a replacement provision, for example for Article 8 (Rights in rem, Struycken again), the complex rules on return and imputation in Article 23 (Queirolo, Dominelli), and the detailed discussion of elements covered in the no less than 11 provisions of Article 36 regarding the ’undertaking’ (Requejo Isodoro). Topics that are treated in other commentaries in a stepmotherly way, are highlighted well, e.g. effects on rights subject to registration in Article 14 (Tuo) and Article 15 covering European patents (Reghizzi). Other articles, which are less spectacular, provide a sufficient level of a recent state of affairs, for example the provisions on insolvency registers, their mutual interconnectivity, publication in another Member State (Articles 24-28) (Hrycaj). They provide a good overview, as does the section (articles 41-44) relating to cross-border cooperation and communication. The treatment of group coordination proceedings (Articles 55-77, some 15% of the text of the EIR Recast) is very brief and disappointing, given the author’s practical knowledge in this area (Van Galen). The fact that these group provisions have now been in force for seven years and the fact that cases where they may apply can be counted on the fingers of one hand may have played a role here.
Annex. An Annex in the book contains the ‘national implementing legislations’ of some 10 Member States insofar as they relate to the Insolvency Regulation. It forms a somewhat strange appendage. The word ‘implementation’ is odd, because the Regulation works automatically and directly. Apparently, the intention is to better integrate the Regulation into national legislation. This could be called: realisation (of the Regulation). But even then, the Annex only contains lists of national provisions that refer in one way or another to the number of the relevant article of the Regulation. In my opinion, the article-by-article comments barely establish the relationship with these national provisions. So, I’m in doubt what it does add. The book concludes with a good bibliography and an index.
Level of editing. From the brief review above, the conclusion can also be drawn that the editors have given the authors a lot of freedom. Some authors are more detailed than others, and some give concrete instructions for adjusting the text of the Regulation. These texts are valuable. In many cases, the current state of affairs is displayed in the comments of many articles. These pieces are equally valuable. Not everyone draws from the same basic literature. I haven’t looked at it thoroughly, but my most recent book from 2022 (Wessels-Madaus) is sometimes not used (it can happen!), sometimes a previous edition (from 2017) is cited, sometimes even the second edition (2006).
Conclusion. This book is certainly valuable for practitioners specialising in (international) insolvency and restructuring. In the first and second decade of this century, this area of law grew in significance in the legal service market. Also, for scholars working in this field of law it presents a sound and solid treatment of several of the most central topics. This book contributes considerably to scholarship and enriches the debates on how (cross-border) debt restructuring is conducted in leading jurisdictions. In future editions, one would wish a more equal and uniform level of approach by the authors to strive for a more coherent treatment of all matters of the Insolvency Regulation. Two years ago, when reviewing one of his other publications (https://bobwessels.nl/blog/2022-06-doc2-cunibertis-2nd-ed-of-conflict-of-laws-a-comparative-approach/) I portrayed Cuniberti as a traditional PIL expert, with little regard for cross-border insolvency law. With this book, co-written and edited by him, he has certainly taken revenge.
Gilles Cuniberti and Antonio Leandro (eds.), The European Insolvency Regulation and Implementing Legislations: A Commentary, Edward Elgar Publishing, 2024. ISBN978-1-80220-520-6.
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.