29 May 2000 the European Council enacted the (EC) No 1346/2000 on insolvency proceedings, published on 30 June 2000 in the Official Journal of the European Union L 160/1.
The EU Council enacted the Regulation (EC) No 1346/2000 on Insolvency Proceedings on 29 May 2000, but the regulation did not become law before 31 May 2002. The Regulations aim is to create a framework for the commencement of proceedings and for the automatic recognition and cooperation between the different member states of the European Union. The Insolvency Regulation does not seek to harmonise insolvency laws between the different member states though.
One of the most important principles of the Regulation is the concept of a centre of main interest (or “COMI”). Thereby the definition of the COMI is left to member states in their implementation of the Regulation. Paragraph (13) of the preamble states though: ‘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 the insolvency proceedings are not subject to the Regulation. For companies an legal persons the Regulation contain a presumption that the registered office will be the COMI of the company. But this presumption can be rebutted.
The Regulation does not contain a definition of insolvency. Though it defines 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. Where the centre of a debtor’s main interests is situated within the territory of a Member State, the courts of another Member State shall have jurisdiction to open insolvency proceedings against that debtor only if he possesses an establishment within the territory of that other Member State. The effects of those proceedings shall be restricted to the assets of the debtor situated in the territory of the latter Member State.
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) there is no mechanism for determining which set of proceedings are to be regarded as the main proceedings if two or more jurisdictions claim that their own proceedings are the main proceedings.
The official text can be found here.