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This part focuses on international jurisdiction, which is covered in Article 3 EIR. It defines the standard criteria for allocating international jurisdiction for the opening of insolvency proceedings falling within the scope of the EIR. It is also divided into rules for ‘main’ insolvency proceedings and ‘secondary’ insolvency proceedings. The commentary explores the significance, objectives, and general characteristics of international jurisdiction. It considers main insolvency proceedings as a universal scope that are preferred as a way of exercising international jurisdiction for pan-EU insolvency cases, while secondary proceedings that are opened in another jurisdiction only have territorial scope. It discusses the general understanding of the recast EIR as a reflection of a ‘universalist’ attitude to international insolvency.

This chapter provides a commentary on the ‘original’ Regulation on Insolvency Proceedings (OR) and the Recast Regulation (RR). It first highlights how the OR is not only intended to deal with the fact that insolvencies increasingly have cross-border aspects but is also intended to be one element in the progress towards a complete and free internal market between all the Member States. With its application to collective insolvency proceedings which entail the partial or total divestment of a debtor and the appointment of a liquidator, the OR encompasses four elements: the proceedings must be collective; the proceedings must be insolvency proceedings; the proceedings must entail the total or partial divestment of the debtor; and the proceedings must entail the appointment of a liquidator. The chapter then turns to the RR, where it analyses some of the changes, such as the newly-proposed three types of proceedings which fall under the RR.

This part includes Article 41 of the EU Regulation on Insolvency Proceedings (EIR), which focuses on cooperation and communication between insolvency practitioners. It cites the requirement of the insolvency practitioner in the main insolvency proceedings and the insolvency practitioner in secondary insolvency proceedings concerning the same debtor to cooperate with each other. It also explores cooperation and communication where there are multiple insolvency proceedings relating to a single debtor. The part recounts the process of recasting EIR in 2015 that resulted in further detailing the duty for insolvency practitioners in main and secondary proceedings to cooperate and to communicate. It describes the recitals to EIR that give a clearer indication of the legislative intention that underpin the expanded cooperation and communication provisions.

This chapter provides commentary on Article 1 of the European Insolvency Regulation, which determines which types of Member State proceedings are eligible to fall within the scope of the Regulation by inclusion in the list in Annex A to the Regulation. The chapter explains the respects in which Article 1 of the recast Regulation is wider than Article 1 of the EIR 2000, resulting in a wider range of Member State procedures being eligible for inclusion in Annex A. The chapter explains the effect of inclusion in Annex A, and explores the position in relation to procedures not listed in Annex A, with reference to the recast Brussels Ia Regulation with which the Regulation was intended to dovetail.

This chapter accompanies the detailed article-by-article commentary on the recast European Insolvency Regulation that follows, providing context for this commentary and anticipating the major themes that recur throughout. The chapter begins with an overview of the problems of cross-border insolvency that motivate the Regulation, before offering an account of the background to the Regulation’s enactment, which helps to explain some of its main features. The chapter explains how these features were refined in the recasting of the Regulation in 2015, and then turns to the relationship between the recast Regulation and the new EU Restructuring Directive. The chapter concludes with a discussion of some of the features of the Regulation that appear ripe for reform.

This part talks about costs of cooperation and communication, which is outlined in Article 44 of the EU Regulation on Insolvency Proceedings (EIR). It emphasises that courts should not charge each other for the costs of cooperation and communication, but costs and fees will be covered by the respective estates. It also analyses several instruments of best practice that are formulated in such a way as to accept that cost avoidance or reduction is an independent interest to take into account. The part points out that the cooperation and communication among insolvency practitioners, courts, and other courts will not result in courts charging costs to each other for cooperation and communication. It clarifies how Article 44 does not apply to the treatment of the costs of insolvency practitioners, such as costs of cross-border telephone conferences, assistance by translators, and translation of documents.

This part contains a commentary on Article 62 of the EU Regulation on Insolvency Proceedings (EIR). This provision establishes a first-in-time priority rule for cases in which multiple requests are made to open group coordination proceedings. However, this is explicitly made subject to Article 66; that is, it only applies if there is no valid choice of another court pursuant to the latter provision.

This part contains a commentary on Article 61 of the EU Regulation on Insolvency Proceedings (EIR). This provision regulates the request to open group coordination proceedings, in particular the persons entitled to make a request and the addressee (Art. 61(1)), the need to comply with any conditions provided by the ‘lex liquidatoris’ (Art. 61(2)), and the necessary accompanying documents (Art. 61(3)).

This part contains a commentary on Article 60 of the EU Regulation on Insolvency Proceedings (EIR). This provision grants the insolvency practitioners of the group members mutual rights of participation in the proceedings opened with respect to other members of the group.

This chapter considers the recognition of insolvency proceedings and the enforcement of the rights and powers of liquidators under the Regulation. In the UK, the position of foreign insolvency practitioners depends upon the degree of recognition or judicial assistance available. Recognition involves giving direct effect to a foreign law, to an order of a foreign court, or the foreign legal status of a foreign administrator or representative. The chapter also describes the recognition of insolvency proceedings and their enforcement, and powers of insolvency practitioners under the RR, who have substantially ‘amplified’ their rights and powers in two ways. First, more detailed provision has been made in relation to the duty of cooperation and coordination in cases where both main and secondary proceedings have been opened in different Member States. Secondly, a new set of rules has been implemented relating to cooperation and communication in proceedings concerning groups of companies.

Article 6 EIR refers to the jurisdiction for actions that derive directly from the insolvency proceedings and are closely linked with them. It establishes international jurisdiction for actions that are closely connected to insolvency proceedings, which are subject to several requirements and brought in the same Member State where the insolvency proceedings have been opened. It also provides the insolvency practitioner the additional option to take an action based on general civil or commercial law in the jurisdiction where the defendant is normally resident. The rule aims to end a long dispute over the correct venue for actions that are closely connected to insolvency proceedings. The commentary points out that the controversy over jurisdiction between ‘related actions’ concerns the relationship between the EIR and the Brussels I Regulation.

This chapter examines the impact of insolvency proceedings recognized by the Regulation on the rights of secured creditors, particularly the rights of such creditors to enforce their security and participate in the relevant insolvency proceedings. It also considers the impact of the Regulation on banks which hold security/quasi-security, addressing in particular the cross-frontier security rights of banks which hold security over the assets of companies or persons who enter into insolvency proceedings regulated by the Regulation, and the effect of those insolvency proceedings on the banks’ security interests. The chapter identifies those Articles of the Regulation which are particularly relevant to the position of a bank as a secured creditor, addresses the interpretation of those provisions (including the identification of difficult points of construction), and considers the practical aspects and the issues which are likely to face banks seeking to enforce security following the Regulation coming into force.

This part explores Article 43 of the EU Regulation on Insolvency Proceedings (EIR), which deals with cooperation and communication between insolvency practitioners and courts. It discusses the requirement of an insolvency practitioner in main insolvency proceedings to cooperate and communicate with a court before which a request to open secondary insolvency proceedings is pending. It also states that insolvency practitioners and the court are designed to facilitate the coordination of main, territorial, and secondary insolvency proceedings opened in respect of the same debtor. The part discusses cooperation and communication duties that are imposed on the insolvency practitioner in the main proceedings and on insolvency practitioners in territorial or secondary proceedings. It describes the prevention of any conflict of interest as a novel element in cross-border insolvency practitioner–court cooperation and communication.

This part discusses Article 34 of the EU Regulation on Insolvency Proceedings (EIR), which sets out the conditions for the opening of secondary insolvency proceedings and the functions of these proceedings. It examines how the universality of main proceedings may be mitigated by providing for the opening of secondary proceedings in Member States which are different from the State where the main proceedings have been opened. It also analyses the rules on jurisdiction and the connecting factor of establishment that determine where secondary proceedings can be opened. It also highlights winding-up proceedings and reorganisation or pre-insolvency proceedings that may be opened as secondary proceedings. This part also deals with the empowerment of an insolvency practitioner of the main proceedings to exercise various rights in the secondary proceedings and to discourage the opening of secondary insolvency proceedings.

This chapter provides commentary on the definitions of key terms contained in Article 2 of the recast European Insolvency Regulation. The commentary explains the principles that govern the interpretation of the Regulation, and then deals with each definition in turn.

This part covers Article 19 of the EU Regulation on Insolvency Proceedings (EIR), which sets out the fundamental principle of the immediate and automatic recognition of judgments opening insolvency proceedings. It describes the recognition of the judgment opening insolvency proceedings handed down by a court in all other Member States from the moment that it becomes effective in the State of the opening of proceedings. It also explains provisions of the EIR regarding immediate and automatic recognition of judgments on the opening, conduct, and closure of insolvency proceedings that fall within its scope. The part ensures the effectiveness of the insolvency proceedings and saves costs and prevents the delays associated with a procedure of formal recognition. It emphasises that the immediate and automatic recognition of judgments is based on the principle of mutual trust.

This part analyses the powers of the insolvency practitioner, which is stipulated in Article 21 of the EU Regulation on Insolvency Proceedings (EIR). It deals with a key effect of the recognition of the effects of insolvency proceedings and exercise of the insolvency practitioner’s powers in other Member States. It also distinguishes between insolvency practitioners appointed in main proceedings and insolvency practitioners appointed in territorial proceedings. The part explains how Article 21 addresses the exercise of the powers of the insolvency practitioner, if one is appointed. It demonstrates how lex concursus determines the procedures for appointment and dismissal of insolvency practitioners and the requirements regarding qualifications or licences, which is related to conflicts of interests, supervision, and the insolvency practitioner’s remuneration.

This part deals with cooperation and communication between courts, which is stipulated in Article 42 of the EU Regulation on Insolvency Proceedings (EIR). It discusses the coordination of main, territorial, and secondary insolvency proceedings concerning the same debtor that requires the cooperation of a court with any other courts and the possibility of the appointment of an independent person or body that acts on their instructions. It also introduces a duty for courts to communicate and cooperate in cross-border insolvency cases concerning the same debtor that fall within the scope of the EIR. The part recounts the process of recasting EIR that led to the introduction of specific provisions relating to the duties of courts and judges in different Member States in relation to insolvency proceedings. It emphasises the principle of mutual trust that supports the principle of automatic recognition of judgments in opening main insolvency proceedings under EIR.