Review of Regulation (EU) 848/2015 on insolvency proceedings

Abstract

One of the imperfections of EU Regulation on Insolvency Proceedings no. 1346/2000 as of 31st May 2000 was provisions relating to determining the jurisdiction of courts. These provisions were imprecise and led to numerous difficulties in practice. EU Regulation on Insolvency Proceedings no. 2015/848 as of 20th May 2015, in its provisions regulates this issue in more details and more precisely. In this respect, the new Regulation paid special attention to prevention of abusive forum shopping i.e. preventing the competent court and governing law to be based in a way that a litigant relocates their seat on purpose within a short period of time before the opening of the insolvency proceedings. Furthermore, the new Regulation more comprehensively determines the court jurisdiction when acting in the main insolvency proceedings. Thus, a court that is responsible for opening the main insolvency proceedings is the court of the member state on whose territory the centre of main debtor's interests is located, while the court responsible for opening the secondary insolvency proceedings is the court of the member state on whose territory the debtor performed their activities on the day of opening the insolvency proceedings i.e. within the period of 3 months before the opening of the insolvency proceedings. The new Regulation devotes special attention to defining the Centre of Main Interests or COMI, since the precise definition of this issue is important for determining the jurisdiction of the court in the main insolvency proceedings.