The Battle Over Jurisdiction in European Insolvency Law
Posted: 23 Apr 2007
The judgment of the European Court of Justice in Eurofood (C-341/04) explores several key provisions of the European Insolvency Regulation (Council Regulation (EC) No. 1346/2000 of 29 May 2000 on insolvency proceedings). The Court interpreted Article 3(1) on the basis of Recital 13 and held that the presumption whereby the centre of main interests (COMI) of a company is situated in the Member State where its registered office is situated can be rebutted only if factors which are both objective and ascertainable by third parties enable it to be established that an actual situation exists which is different from that which locating at that registered office is deemed to reflect. In this context the Court reminded the national courts that it is inherent in the principle of mutual trust that the court of a Member State hearing an application for the opening of main insolvency proceedings checks that it has jurisdiction having regard to Article 3(1), i.e. examines whether the COMI is situated in that Member State. On Article 16(1) the Court gave an autonomous interpretation to the words "judgment opening insolvency proceedings" and held that the main insolvency proceedings opened by a court of a Member State must be recognised by the courts of the other Member States, without the latter being able to review the jurisdiction of the court of the opening State. Finally, the Court held that under Article 26 a Member State may refuse to recognise insolvency proceedings opened in another Member State where the decision to open the proceedings was taken in flagrant breach of the fundamental right to be heard, which a person concerned by such proceedings enjoys. The article gives a critical assessment of the decision, noting in particular the dangers of allowing Member States to open insolvency proceedings on the basis of ex parte applications for provisional measures.
Keywords: Insolvency, jurisdiction, mutual recognition, European legal harmonisation
JEL Classification: K2
Suggested Citation: Suggested Citation