In January, the District Court of Rotterdam ruled on a request from X (from Manchester) and Y (from London), both acting as administrators appointed by the English High Court in an administration, an English insolvency proceeding concerning company Z. The administrators were appointed to wind up Z, a company incorporated under the laws of England and Wales that, in addition to its activities in the UK, also had an establishment in the Netherlands, close to Rotterdam. Approximately 25 employees were employed at this Dutch establishment based on employment contracts to which Dutch law applied.
Following the opening of the administration proceedings, the administrators wished to terminate the Dutch employment contracts in accordance with the rules of Dutch insolvency law. Under the Netherlands Bankruptcy Act (NBA), an insolvency practitioner (curator) may terminate employment contracts only with the permission of a supervisory judge but no insolvency proceedings had been opened in the Netherlands. Therefore, the administrators asked the Rotterdam District Court to appoint a supervisory judge who would be able to grant the required authorisation for dismissal pursuant to Article 68(4) of the NBA.
A degree of contextual explanation is required to explain the meaning of Article 68(4). In cross-border insolvency situations within the European Union, the principle is that the law of the member state in which the main insolvency proceedings are opened governs the proceedings (lex fori concursus). However, Article 13 of the Insolvency Regulation (EIR 2015) establishes an exception to this principal rule. It provides that the effects of insolvency proceedings on employment contracts and relationships are governed solely by the law applicable to the employment contract (lex contractus). Its rationale is the protection of employees and the preservation of jobs. Employees should not be exposed to uncertainty arising from the application of a foreign insolvency law unfamiliar to their contractual framework. Accordingly, and in line with the Article 8 of the Rome I Regulation, the continuation or termination of employment relationships, as well as the respective rights and obligations of both parties, are governed by the law applicable to the employment contract under the ordinary conflict-of-laws rules.
If it is established that there is indeed an employment contract, Article 13(2) EIR 2015 adds a layer of flexibility to bridge differences between the law governing the insolvency proceedings and the law governing the employment contract. In some member states, termination or modification of employment contracts during insolvency requires judicial or administrative authorisation. Where the law of the main proceedings does not provide such a mechanism but the lex contractus does, Article 13(2) retains jurisdiction for the local courts or authorities of the member state where the debtor has its establishment, even if no secondary proceedings are opened. This avoids procedural deadlocks and respects national labour protections. Local courts are typically deemed to be better placed to apply their own employment laws, assess the economic circumstances of collective redundancies, and safeguard access to justice for employees working in that member state.
Article 68(4) of the NBA relates to the actual operation of Article 13(2) EIR 2015 in the Netherlands. In the event that no secondary insolvency proceedings have been opened in the Netherlands, the authorisation to terminate employment contracts referred to in Article 13 EIR 2015 shall be granted, at the request of the (non-Dutch) insolvency officer in the main insolvency proceedings, by the supervisory judge of the court designated as the competent court. This court shall appoint a supervisory judge within five working days of receipt of the request for authorisation.
Returning to the case. The administrators argued, first, that the Dutch court has jurisdiction, considering that the company had an active Dutch establishment, holds stock and inventory there, has entered employment contracts under Dutch law and has contractual relations with Dutch parties. As the establishment was in the territorial jurisdiction of the District Court of Rotterdam, that court was competent to hear the request. The court accepted the argument and considered itself competent to hear the Article 68(4) request.
I would like to pause here briefly, because the court, without further explanation, recognised the authority of the English administrators, and thereby essentially recognised the administration as a procedure. This deviates from the doctrine still prevailing in the Netherlands that insolvency proceedings from outside the EU (such as English insolvency proceedings after Brexit) are not recognised. In the Netherlands, however, under the application of specific case law, it has been recognised since a Dutch Supreme Court ruling in 2008 that a foreign (non-EU, in this case Russian) trustee may exercise his powers, albeit the powers may not extend beyond those of a Dutch trustee. It is unclear why the court did not pursue this route. Be that as it may, the Rotterdam court heard the administrators’ argument.
Substantively, the administrators argued that the English administration is materially comparable to a Dutch insolvency. Their position largely corresponds to that of a Dutch insolvency practitioner (curator). Based on that reasoning, the English administrators argued they should also be able to make use of the Dutch provision that allows for the termination of employment contracts with the permission of a supervisory judge, pointing to Article 68(4) of the NBA, which – they said – is specifically intended to provide a solution when foreign principal insolvency proceedings exist but no secondary proceedings have been opened in the Netherlands.
The English administrators argued the provisions of the EIR 2015 and therefore Article 68(4) NBA should be applied by analogy. In addition, they pointed to the doctrine of assimilation, whereby foreign legal concepts are incorporated into Dutch law as much as possible when they are functionally comparable to Dutch legal concepts. According to them, there was therefore scope to apply Article 68(4) NBA by analogy.
The court saw no room for the latter argument. It ruled that the issue was not whether and how the Dutch court must incorporate a foreign legal concept into Dutch law, but whether the Dutch court can appoint a supervisory judge based on Article 68(4) of the NBA for authorisations of dismissal in proceedings to which the EIR 2015 applies. The court answered the latter question in the negative.
In the court’s opinion, the fact the dismissal procedure would be facilitated if authorisation could be granted by a Dutch supervisory judge did not create a basis for the power to appoint a supervisory judge. Moreover, the court found the administrators did not show that the employees could not be dismissed without authorisation or could not rely on the wage guarantee scheme.
The court therefore concluded that, although there were jurisdiction and competence to hear the request, a statutory basis for the appointment of a supervisory judge was lacking. The specific provisions of Article 68(4) of the NBA are limited to situations to which the European Insolvency Regulation applies. Since the EIR no longer applies in the UK following Brexit, the request could not be granted. The administrators’ request was therefore rejected.
The ruling proves once again that the EIR 2015 is a difficult instrument. The latest developments have prompted the Netherlands Association of Comparative and International Insolvency Law (NACIIL) to act as a guide and support the users of the EIR navigating the turbulent waters of the concepts and rules determining cross-border insolvency and restructuring in the EU.
The NACIL has produced an eight-part video series on the European Insolvency Regulation 2015, explaining the key issues in EU cross-border insolvency and restructuring law, including the scope of application of the European Insolvency Regulation 2015, international jurisdiction, applicable law (including Article 13 mentioned above), recognition and enforcement of judgments, cooperation between courts and insolvency practitioners, and possible future reforms. The video series was published in June and July 2026.
The video presenters are Defne Taşman (Ph.D. Researcher, University of Antwerp, Belgium) and myself. Regarding those possible future reforms in the eighth video, we highlight ten topics that we believe warrant clarification, refinement, or further policy initiatives. In the EU, it is recognised that about five years following the transposition of the Preventive Restructuring Directive 2019/1023 that preventive restructuring frameworks, as a procedure, are difficult to integrate into the EIR 2015. The regulation also contains several provisions that may generally be at odds with preventive restructuring procedures.
And does the territorially limited region (only EU member states excluding Denmark) of the EIR 2015 still fit into current restructuring practice? Apart from quasi-covert desires regarding a “Brentry” (a return of the UK in some form within the EU and its market), the time has perhaps come for the EU to develop a regulation, binding all EU member states, concerning inbound judgments from non-EU member states, offering predictability and certainty regarding a system of recognition, applicable law, coordination, confluence of parallel proceedings and enforcement within the EU. Such a regulation should be clearly defined and should cover proceedings based on insolvency law as well as processes known as (public and private) preventive restructuring frameworks, arrangement schemes, restructuring plans, and similar rescue tools. In the autumn of 2026, the expert group that advises on the EIR will resume its work to provide its opinion on proposals from the European Commission.
In any case, it is certainly time for you (or through you, your colleagues, clients, or lecturers from universities around the world) to be fully up to date and to know what is happening within Europe, now and possibly in the future.
References
District Court of Rotterdam 26 January 2026, ECLI:NL:RBROT:2016:1655
Netherlands Supreme Court 19 December 2008, ECLI:NL:HR:2008:BG37573 (Yukos Oil Company I)
Netherlands Association for Comparative and International Insolvency Law (NACIIL), at https://naciil.org/online-course/.
This is a slightly adapted version of a regular column Bob Wessels is writing for Global Restructuring Review (GRR) on the topic of cross-border restructuring and insolvency in a European context. GRR is a subscription-only publication and the column appeared in GRR on July 29, 2026. See www.globalrestructuringreview.com.