The Insolvency Regulation is an
EU Regulation concerning the rules of jurisdiction for opening insolvency proceedings in the
European Union. It determines which member states' courts have jurisdiction.
History
EU member states concluded the Convention on Insolvency Proceedings in 1995, however it never entered into force as ratification by all member states was required and the
United Kingdom did not sign within the timelines specified in the Convention.
Content
The
EC Regulation
A regulation is a legal act of the European Union that becomes immediately enforceable as law in all member states simultaneously. Regulations can be distinguished from directives which, at least in principle, need to be transposed into nation ...
on Insolvency Proceedings 2000 was passed on 29 May 2000 and came into effect on 31 May 2002.
It replaced the substance of the 1995 Convention. The Regulation applies between all member states of the
European Union, with the exception of
Denmark which has an
opt-out from the EU's
Area of freedom, security and justice, and focuses upon creating a framework for the commencement of proceedings and for the automatic recognition and co-operation between the different member states. Unusually for a European regulation, the EC Insolvency Regulation does not seek to harmonise insolvency laws between the different member states.
Like the
UNCITRAL Model Law on Cross-Border Insolvency
The UNCITRAL Model Law on Cross-Border Insolvency was a model law issued by the secretariat of UNCITRAL on 30 May 1997 to assist states in relation to the regulation of corporate insolvency and financial distress involving companies which have ...
, the EC Regulation also employs the concept of a centre of main interest (or "COMI"). The definition of the COMI is left to member states in their implementation of the Regulation, but paragraph (13) of the preamble states: 'The "centre of main interests" should correspond to the place where the debtor conducts the administration of his interests on a regular basis and is therefore ascertainable by third parties.' If the COMI of an entity is outside of the European Union then the insolvency proceedings are not subject to the Regulation. In relation to
companies there is a
presumption that the registered office will be the COMI of the company, but this presumption can be (and often is)
rebutted.
The EC Regulation does not define insolvency, but it does define insolvency proceedings as being 'collective insolvency proceedings which entail the partial or total divestment of a debtor and the appointment of a liquidator'. Article 3 divides proceedings into main proceedings and territorial proceedings. The main proceedings are accorded extraterritorial effect throughout the European Union. One of the concerns which has been expressed in relation to the EC Regulation is that (other than a reference to the
European Court of Justice
The European Court of Justice (ECJ, french: Cour de Justice européenne), formally just the Court of Justice, is the supreme court of the European Union in matters of European Union law. As a part of the Court of Justice of the European Un ...
) there is no mechanism for determining which set of proceedings are to be regarded as the main proceedings if two or more jurisdictions claims that their own proceedings are the main proceedings.
An amendment to the regulation was approved in 2015, which again applied to all EU member states except Denmark.
See also
*
Cross-border insolvency
*
UK insolvency law
*Directive 2001/24/EC, reorganisation and winding up of credit institutions
*Directive 2001/17/EC, reorganisation and winding up of insurance undertakings
Notes
External links
Text of Insolvency Regulation (EC) 1346/2000
References
*I Fletcher, ''Insolvency in Private International Law'' (2006) ch 7
*CG Paulus, ''Europäische Insolvenzverordnung Kommentar'' (3rd edn 2011)
{{DEFAULTSORT:Insolvency Regulation (EC) 1346 2000
Cross-border insolvency
European Union regulations
1346/2000