Evaluating Legal Certainty under Insolvency Regulations of the European Union

##plugins.themes.bootstrap3.article.main##

Bader Al Maskari

Abstract

This article examines the insolvency rules of the European Union, specifically, the Recast European Insolvency Regulation (EIR Recast 2015), in order to determine whether such rules help enhance legal certainty in cross-border insolvency cases involving corporate groups with the objective of reducing abusive forum shopping. The problem of cross-border insolvency with corporate groups is a very timely one, especially in light of the global growth of international trade, the movement towards the economic integration of various regions around the world, such as the European Union, the greater flow of capital, and the ease of global communications.  Forum shopping refers to the practice of such a company seeking the most favourable jurisdiction for its insolvency proceedings. This practice is known as ‘abusive’ when it reaches the point when a particular interest group, in so doing, seeks to appropriate wealth that belongs to others. The outline of this article is as follows: Section 1 of this article starts by providing an overview of cross-border insolvency of corporate groups. Then Section 2 explores in depth the main provisions of the EIR Recast 2015 that are relevant to enhancing legal certainty in a way beneficial to reducing abusive forum shopping, Section 3 proposes some recommendations to improve the EIR Recast 2015 in regard to enhancing legal certainty with the objective of reducing abusive forum shopping, and Section 4 concludes.

##plugins.themes.bootstrap3.article.details##

Keywords

Insolvency
Corporate groups
Company law
Forum Shopping
Legal certainty

Section
Articles in English
References
Bibliography
American Cases
Global Telesystems Inc v KPNQwest NV 151 F.Supp.2d 478 (SDNY 2001)
English Cases
Collins & Aikman Europe SA, Re [2005] EWHC 1754 (Ch), [2006] BCC 861
Daisytek-ISA Ltd and Others, Re [2003] All ER (D) 312
MG Rover Espana and other Subsidiaries [2005] BPIR 1162, [2006] BCC579.

Stanford International Bank Limited, Re [2009] EWHC 1441 (Ch), [2009] BPIR 1157
CJEU Cases
Case C-341/04 Eurofood IFSC Ltd [2006] ECR 1-3813
Case C-396/09 Interedil SrI (In liquidation) v Fallimento Interedil SrI and another [2011] WLR 334
List of Legal Instruments
Insolvency Proceedings [2000] OJ L160/1
Insolvency Proceedings (recast) [2015] OJ L141/19
A
Aasaru E, ‘The Desirability of Centre of Main Interests as a Mechanism for Allocating Jurisdiction and Applicable Law in Cross-Border Insolvency Law’ (2011) 22 European Business Law Review 349
B
Bell A, Forum Shopping and Venue in Transnational Litigation (Oxford University Press 2003)
Bewick S, ‘First do no Harm -Changes to the EU Insolvency Regulation’ (2012) 5 Corporate Rescue and Insolvency 207
— — ‘The EU Insolvency Regulation Revisited’ (2015) 24 International Insolvency Review 172
Bork R and Managano R, European Cross-Border Insolvency Law (Oxford University Press 2016)
Braithwaite J, ‘Rules and Principles: A Theory of Legal Certainty’ (2002) 27 Australian Journal of Legal Philosophy 47
C
van Calster G, ‘COMIng, and here to Stay. The Review of the European Insolvency Regulation’ [Unpublished] (SSRN 2016)
E
Esser P, ‘Reform of the EU Regulation New Framework for Insolvent Company Groups: Part 1’ (2015) 34 American Bankruptcy Institute Journal 38
F
Fletcher I, Insolvency Law in Private International Law (2nd, Oxford University Press 2005)
H
Hannigan B, Company Law (4th edn, Oxford University Press 2016)
Hess B, Oberhammer P and Pfeiffer T, European Insolvency Regulation Heidelberg-Luxembourg-Vienna Report (Hart Publishing 2014)
M
McCormack G, ‘Jurisdiction Competition and Forum Shopping in Insolvency Proceedings’ (2009) 68 The Cambridge Law Journal 169
— — ‘COMI and Comity in UK and US Insolvency Law’ (2012) 128 Law Quarterly Review 140
— — ‘Reconciling European Conflict and Insolvency Law’ (2014) 15 European Business Organization Law Review 309
— — ‘Bankruptcy Forum Shopping: the UK and US as Venues of Choice for Foreign Companies’ (2014) 63 International and Comparative Law Quarterly 815;
— — ‘Reforming the European Insolvency Regulation: A Legal and Policy Perspective’ (2014) 10 Journal of Private International Law 49
— — ‘Something Old, Something New: Recasting the European Insolvency Regulation’ (2016) 79 The Modern Law Review 121
Mevorach I, Insolvency within Multinational Enterprise Groups (Oxford University Press 2009)
— — ‘The Home Country’ of a Multinational Enterprise Group Facing Insolvency’ (2008) 57 The International and Comparative Law Quarterly 427
— — ‘Beyond the Search for Certainty: Addressing the Cross-Border Resolution Gap’ (2015) 10 Brooklyn Journal of Corporate, Financial and Commercial Law 183
Mucciarelli F, ‘Private International Law Rules in the Insolvency Regulation Recast: A Reform or a Restatement of the Status Quo’ [Unpublished] (SSRN, 25 August 2015) accessed 26 April 2016

P
Popelier P, ‘Legal Certainty and Principle of Proper Law Making’ (2000) 2 European Journal of Law Reform 321
S
Sarra J, ‘Oversight and Financing of Cross-Border Business Enterprise Group Insolvency Proceedings’ (2009) 44 Texas International Law Journal 547
T
Thole C and Duenas M, ‘Some Observations on the New Group Coordination Procedure of the Reformed European Insolvency Regulation’ (2015) 24 International Insolvency Review 214
Tirado I, , ‘An Evaluation of COMI in the European Insolvency Regulation: From
‘Insolvenzimperialismus’ to the Recast’ (2015) Annal Review of Insolvency Law 691.
Tollenaar N, ‘Dealing with the Insolvency of Multi-National Groups under the European Insolvency Regulation’ (2010) 23 Insolvency Intelligence 65
V
Vette E, ‘Multinational Enterprise Groups in Insolvency: How Should the European Union Act?’ (2011) 7 Utrecht Law Review 216
W
Wade J, ‘The Centre of Main Interests Connecting Factor Affords Creditors no Certainty under the Model Law Regime’ (2011) 22 International Company and Commercial Law Review 102
Weijs R and Breeman M, ‘Comi-Migration: Use or Abuse of European Insolvency Law’ (2015) 11 European Company and Financial Law Review 495
Weiss M, ‘Bridge over Troubled Water: The Revised Insolvency Regulation’ (2015) 24 International Insolvency Review 192
Wessels B and Miguel Virgos, ‘European Communication and Cooperation Guidelines for Cross-Border Insolvency’ (INSOL Europe, July 2007) accessed 30 April 2016
— — ‘The Ongoing Struggle of Multinational Groups of Companies under the EC Insolvency Regulation’ (2009) 4 European Company Law 169
— — International Insolvency Law (Kluwer 2012)
Wood P, Principle of International Insolvency (Sweet &Maxwell 2007)