¹ Eisenberg, T. and LoPucki, L., “Shopping for Judges: An Empirical Analysis of Venue Choice in Large Chapter 11 Reorganizations” (1999) 84 Cornell Law Review 967 at 975Google Scholar.

² See generally the series of articles in “Colloquy: International Bankruptcy” (2000) 98 Michigan Law Review 2177. See also Bebchuk, L. and Guzman, A., “An Economic Analysis of Transnational Bankruptcies” (1999) 42 Journal of Law & Economics 775CrossRefGoogle Scholar; H. Buxbaum, “Rethinking International Insolvency: The Neglected Role of Choice-of-Law Rules and Theory “(2000) 36 Stanford Journal of International Law 23; L. Perkins, “A Defense of Pure Universalism in Cross-Border Corporate Insolvencies” (2000) 32 NYU Journal of International Law & Politics; Franken, S., “Three Principles of Transnational Corporate Bankruptcy Law: A Review” (2005) 11 European Law Journal 232CrossRefGoogle Scholar.

³ See Westbrook, J.L., “Multinational Enterprises in General Default: Chapter 15, The ALI Principles and The EU Insolvency Regulation” (2002) 76 American Bankruptcy Law Journal 1 at 10–12Google Scholar.

⁴ [1997] Ch. 213, 239–240.

⁵ See the comments of Wynn-Parry J. in Re Azoff-Don Commercial Bank [1954] Ch. 315, 333 and Browne-Wilkinson V.C. in Re Bank of Credit and Commerce International SA (No. 2) [1992] B.C.L.C. 570, 577.

⁶ See Banco Nacional de Cuba v. Cosmos Trading Corp [2000] B.C.C. 910, 915. But see now Cross-Border Insolvency Regulations 2006, S.I. 2006/1030 Sch. 1, Art. 28.

⁷ [2007] 1 A.C. 508.

⁸ [2007] 1 A.C. 508 at [16].

⁹ [2007] 1 A.C. 508 at [17].

¹⁰ [2008] 1 W.L.R. 852; on appeal from [2007] 1 All E.R. 177.

¹¹ Lords Scott and Neuberger rejected Lord Hoffmann's view on the scope of the common law and while Lord Walker agreed with Lord Hoffmann, Lord Phillips declined to go beyond the common ground in the case. English courts now have discretionary power to order the transfer of assets to a foreign insolvency representative power under Art 21(2) of the UNCITRAL Model Law on Cross-Border Insolvency, which has been implemented in the UK by the Cross-Border Insolvency Regulations 2006, S.I. 2006/1030.

¹² Certain countries and territories have been designated by the Co-Operation of Insolvency Courts (Designation of Relevant Countries and Territories) Order 1986, S.I. 1986/2123, as amended by S.I. 1996/253 and S.I. 1998/2766. These consist of Commonwealth countries and territories with the addition of the Republic of Ireland and Hong Kong but excluding the United States.

¹³ Under Australian law insurance creditors were treated better and non-insurance creditors worse than under English law. As Lord Hoffmann pointed out at para. [32] English law has now adopted a regime for the winding-up of insurance companies which gives preference to insurance creditors – reg. 21(2) of the Insurers (Reorganisation and Winding Up) Regulations 2004, S.I. 2004/353 giving effect to Directive 2001/17/EC on the reorganisation and winding up of insurance companies.

¹⁴ See generally LoPucki, L., “Cooperation in International Bankruptcy: A Post-Universalist Approach” (1999) 84 Cornell Law Review 696Google Scholar and see also Westbrook, J.L., “Theory and Pragmatism in Global Insolvencies: Choice of Law and Choice of Forum” (1991) 65 American Bankruptcy Law Journal 457Google Scholar.

¹⁵ See Tung, F., “Is International Bankruptcy Possible?” (2001) 23 Michigan Journal of International Law 31Google Scholar.

¹⁶ See Franken, S., “Three Principles of Transnational Corporate Bankruptcy Law: A Review” (2005) 11 European Law Journal 232 at 236CrossRefGoogle Scholar.

¹⁷ Council Regulation (EC) 1346/2000, OJ 2000 L160/1. See generally on the Regulation and the Convention, G. Moss, I. Fletcher and S. Isaacs, The EC Regulation on Insolvency Proceedings (Oxford 2002); Balz, M., (1996) 70 American Bankruptcy Law Journal 485Google Scholar; Fletcher, I., (1997) 23 Brooklyn Journal of International Law 25Google Scholar; Fletcher, I., (1998) 33 Texas International Law Journal 119Google Scholar; Rajak, H., [2000] Company Financial and Insolvency Law Review 180Google Scholar; F. Dahan, ‘The European Union Convention on Insolvency Proceedings – Good News for Lawyers’, in B. Rider and M. Andenas (eds.), Developments in European Company Law (London 1996).

¹⁸ See L. LoPucki, “Universalism Unravels” (2005) 79 American Bankruptcy Law Journal 143 at 166: “Universalists are trying to bring their system in through the back door. The UNCITRAL Model law was negotiated by a delegation led by universalist Jay L. Westbrook, and then sold to Congress as not really universalist.”

¹⁹ Art. 3(1) of the Regulation. The Regulation applies in all the EU Member States, except Denmark which exercised an opt-out: see Re Arena Corporation Ltd [2004] B.P.I.R. 375 where it was held that in accordance with recital (33) of the Regulation, Denmark was not to be considered a “Member State” for the purposes of the Regulation. This meant that an English court could wind up a company whose centre of main interests was in Denmark, provided the company had sufficient connection with England. Jurisdiction was not ousted by the Regulation.

²⁰ See Westbrook, J.L., “Theory and Pragmatism in Global Insolvencies: Choice of Law and Choice of Forum” (1991) 65 American Bankruptcy Law Journal 457 at 465Google Scholar: “a universalist rule would so increase values available for all local claimants in all general defaults as to offset by far the losses that particular local claimants might suffer in some cases. That assertion is persuasive because the preservation of going concern values and the maximising of liquidation values by integrated sales will likely increase returns to creditors greatly.”

²¹ See the comment by Rajak, H. [2000] Company Financial and Insolvency Law Review 180 at 193Google Scholar.

²² Article 31.

²³ See Westbrook, J.L. “A Global Solution to Multinational Default” (2000) 98 Michigan Law Review 2276 at 1284 on “market symmetry”CrossRefGoogle Scholar.

²⁴ See generally on the Model Law Ian Fletcher, Insolvency in Private International Law, 2nd ed. (Oxford 2005), chapter 8; Roy Goode, Principles of Corporate Insolvency Law 2nd ed. (London 2005), chapter 14; Bob Wessels, Current Topics of International Insolvency Law (Amsterdam 2004), chapter 2; Paul Torremans, Cross Border Insolvencies in EU, English and Belgian Law (London 2002), chapter 5; A. Berends, “UNCITRAL Model Law on Cross-Border Insolvency: A Comprehensive Overview” (1998) 6 Tulane Journal of International and Comparative Law 309; J. Clift, “The UNCITRAL Model Law on Cross-Border Insolvency – A Legislative Framework to Facilitate Coordination and Cooperation in Cross-Border Insolvency” (2004) 12 Tulane Journal of International and Comparative Law 307.

²⁵ Fletcher, Insolvency in Private International Law, 453.

²⁶ Article 2(b). Cross-Border Insolvency Regulations 2006, S.I. 2006/1030 Sch 1, Art 2(h).

²⁷ Article 2(f). Cross-Border Insolvency Regulations 2006, S.I. 2006/1030 Sch. 1, Art. 2(e) defines “establishment” slightly differently as meaning “any place of operations where the debtor carries out a non-transitory economic activity with human means and assets or services”. The Insolvency Service state that it was felt appropriate to substitute “assets” for “goods” as this was not a change of substance and also it could help to avoid some of the concerns that had arisen in the equivalent definition under the EIR: see Implementation of UNCITRAL Model Law on Cross-Border Insolvency in Great Britain: Response to Consultation (2006), para 43

²⁸ Torremans, Cross Border Insolvencies in EU, English and Belgian Law, 206 suggests that the addition of services is of little importance in that it is hard to imagine a case where there would be services but no goods.

²⁹ Article 28 of the Model Law.

³⁰ Cross-Border Insolvency Regulations 2006, S.I. 2006/1030 Sch 1, Art 28. In limiting the effects of local insolvency proceedings to assets within the jurisdiction, the Regulations overturn the long-established common law principle that an English winding-up order has universal effect – see the comments of Scott V.C. in Banco Nacional de Cuba v. Cosmos Trading Corp [2000] B.C.C. 910, 915 about “a weakness in our winding up law” that is it not possible to have a winding up of a foreign company that is exclusively territorial in its application.

³¹ Rasmussen, R., “Debtor's Choice: A Menu Approach to Corporate Bankruptcy” (1992) 71 Texas Law Review 51Google Scholar.

³² Schwartz, A., “Bankruptcy Workouts and Debt Contracts” (1993) 36 Journal of Law and Economics 595CrossRefGoogle Scholar.

³³ See Skeel, David A., “Markets, Courts and the Brave New World of Bankruptcy Theory” [1993] Wisconsin Law Review 465 at 482Google Scholar.

³⁴ See generally Ogus, A., “Competition Between National Legal Systems: A Contribution of Economic Analysis to Comparative Law” (1999) 48 I.C.L.Q. 405CrossRefGoogle Scholar; and see also Mattei, U., “A Transaction Costs Approach to the European Civil Code” [1997] European Review of Private Law 537Google Scholar.

³⁵ See Roger Van den Bergh “Forced Harmonisation of Contract Law in Europe: Not to be Continued in S. Grundmann and J. Stuyck (eds.), An Academic Green Paper on European Contract Law (The Hague 2002), 249 at p. 267: “The advantages of competition between legal rules must not be underestimated: if rules differ, more preferences can be satisfied and learning processes remain possible.”

³⁶ See Easterbrook, F., “Federalism and European Business Law” (1994) 14 International Review of Law and Economics 125 at 127–128CrossRefGoogle Scholar.

³⁷ For a reference to separate jurisdictions as legal laboratories see Brandeis J. in New State Ice Corp v. Liebmann (1932) 285 U.S. 262 at 311.

³⁸ J. Armour, “Who Should Make Corporate Law? EC Legislation versus Regulatory Competition” ECGI – Law Working Paper No54/2005, available at www.ssrn.com argues that corporate rescue procedures are a “prime candidate for a stance of regulatory competition at the EU level, and for the forces of regulatory competition to be harnessed so as to permit a learning process as to the most appropriate legal regime.” He argues that it is desirable to permit companies to select a company law regime so as to achieve a better “fit” with their corporate governance requirements and it is also desirable for them to be able to select the associated corporate insolvency law.

³⁹ Enriques, L. and Gelter, M., “Regulatory Competition in European Company Law and Creditor Protection” (2006) 7 European Business Organisation Law Review 417 at 449CrossRefGoogle Scholar: “we can reasonably predict that States will not actively compete to attract bankruptcies”; but see McCahery, J., “Creditor Protection in a Cross-Border Context” (2006) 7 European Business Organisation Law Review 455 at 459CrossRefGoogle Scholar.

⁴⁰ See Armour “Who Should Make Corporate Law?” ECGI – Law Working Paper No54/2005 at p. 34.

⁴¹ Only Hans Brochier has given rise to a reported decision, [2007] B.C.C. 127, but the other cases have been extensively reported in the professional press. See e.g. Legal Week 22 February 2007, where it is commented that “forum shopping never quite went out of fashion. One thing has changed though – the language. ‘Migration’ has become the new forum shopping”. But see Global Turnaround (July 2007) “German law reform could halt migration”.

⁴² See Eidenmuller, H., “Free Choice in International Company Insolvency Law in Europe” (2005) 6 European Business Organisation Law Review 423CrossRefGoogle Scholar; Enriques, L. and Gelter, M., “Regulatory Competition in European Company Law and Creditor Protection” (2006) 7 European Business Organisation Law Review 417CrossRefGoogle Scholar.

⁴³ Armour, “Who Should Make Corporate Law?” ECGI – Law Working Paper No54/2005 at p. 53.

⁴⁴ It seems that over 60% of large company bankruptcies are filed away from the company's headquarters: see LoPucki Bankruptcy Research Database available at http://lopucki.law.ucla.edu/; and see LoPucki, L., “Universalism Unravels” (2005) 79 American Bankruptcy Law Journal 143 at 166 n.100Google Scholar.

⁴⁵ Zywicki, T., “Is Forum Shopping Corrupting America's Bankruptcy Courts?” (2006) 94 Georgetown Law Journal 1141 at 1145Google Scholar.

⁴⁶ Skeel, David A., “Bankruptcy Judges and Bankruptcy Venue: Some Thoughts on Delaware” (1998) 1 Delaware Law Review 1Google Scholar; “What's So Bad About Delaware” (2001) 54 Vanderbilt Law Review 309; R. Rasmussen and R. Thomas, “Chapter 11 Reorganization Cases and the Delaware Myth” (2002) 55 Vanderbilt Law Review 1987. See also T. Chang and A. Schoar, “The Effect of Judicial Bias in Chapter 11 Reorganisation” (October 2006) available on www.ssrn.com/.

⁴⁷ See generally Lynn M. LoPucki, Courting Failure: How Competition For Big Cases is Corrupting the Bankruptcy Courts (Ann Arbor 2005) for a full blooded critique. For just a taste see p. 23: “The process by which pressure to compete is brought to bear on the judges is brutal and intimidating. The lawyers who place cases are among the most powerful and prestigious of the bankruptcy bar. They publicly laud the judges who give them what they want and harshly criticize those who do not. Some of the latter become pariahs of the national bankruptcy bar – judges considered so bad they drive the cases away. Lawyers – and other judges – malign them as ‘toxic judges’”.

⁴⁸ See LoPucki, Courting Failure, at p. 17.

⁴⁹ See Re Kmart (2004) 359 F. 3d. 866 at 871 where Judge Easterbrook said “A doctrine of necessity is just a fancy name for a power to depart from the Code.”

⁵⁰ LoPucki, Courting Failure, 249.

⁵¹ Eisenberg, T. and LoPucki, L., “Shopping for Judges: An Empirical Analysis of Venue Choice in Large Chapter 11 Reorganizations” (1999) 84 Cornell L Rev 967 at 971Google Scholar and LoPucki, L. and Kalin, S., “The Failure of Public Company Bankruptcies in Delaware and New York: Empirical Evidence of a ‘Race to the Bottom’” (2001) 54 Vanderbilt Law Review 231 at 264Google Scholar.

⁵² Eisenberg and LoPucki “Shopping for Judges” (1999) 84 Cornell Law Review 967 at 1002. See also their comments at 971: “Observers seem to agree that judge shopping breeds disrespect for and threatens the integrity of our judicial system and undermines the aphorism that ‘ours is a government of laws, not men’.”

⁵³ Section 1104. In Re Marvel Entertainment Group (1998) 140 F. 3d. 463 at 471 it was stressed that the appointment of an outside trustee should be the exception rather than the rule.

⁵⁴ LoPucki, Courting Failure, 14.

⁵⁵ For rebuttals of the LoPucki thesis see Jacoby, M., “Fast, Cheap and Creditor-Controlled: Is Corporate Reorganization Failing” (2006) 54 Buffalo Law Review 401Google Scholar; Zywicki, T., “Is Forum Shopping Corrupting America's Bankruptcy Courts?” (2006) 94 Georgetown Law Journal 1141 at 1145Google Scholar.

⁵⁶ “Universalism Unravels” (2005) 79 American Bankruptcy Law Journal 143.

⁵⁷ See McCahery, J., “Creditor Protection in a Cross-Border Context” (2006) 7 European Business Organisation Law Review 455 at 458CrossRefGoogle Scholar.

⁵⁸ [2007] B.C.C. 127.

⁵⁹ See the statement by the government minister in Hansard, Standing Committee B, Enterprise Bill, 15^th Sitting, 9^th May 2002 at col. 602, and the discussion in Stephen Davies (ed.), Insolvency and the Enterprise Act 2002 (Bristol 2003), at pp. 13–14. See generally on the flavour of the times John Cassidy dot.con (New York 2002); note his comment at p. 26: “In Britain … Tony Blair's New Labor government was consumed with trying to replicate the freewheeling culture of Silicon Valley.”

⁶⁰ See A. Tilley, “European Restructuring: Clarifying Trans-Atlantic Misconceptions” [2005] Journal of Private Equity 99 at 102: “European restructuring … , with the exception of the U.K. among the major economies, is still inflexible, bureaucratic, and value destructive. For this reason international practitioners favour the U.K. as a jurisdiction should a choice be available.” See also Pochet, C. “Institutional Complementarities within Corporate Governance Systems: A Comparative Study of Bankruptcy Rules” (2002) 6 Journal of Management and Governance 343CrossRefGoogle Scholar; Brouwer, M. “Reorganization in US and European Bankruptcy Law” (2006) 22 European Journal of Law and Economics 5CrossRefGoogle Scholar.

⁶¹ L. LoPucki in “The Case for Cooperative Territoriality in International Bankruptcy” (2000) 98 Michigan Law Review 2216 at 2217 has gone so far as to say that the standard is intentionally vague and practically meaningless.

⁶² Hans Brochier Holdings Ltd v. Exner [2007] B.C.C. 127.

⁶³ Re Eurofood IFSC Ltd [2006] E.C.R. 1-03813 at para. [43].

⁶⁴ [2004] B.P.I.R. 30.

⁶⁵ The decision of the English High Court opening insolvency proceedings in Daisytek was ultimately recognised by the Court of Appeal of Versailles and the final French Court of Appeal, the Court de Cassation; on this see Klempka v. ISA Daisytek SA [2003] B.C.C. 984 and France v. Klempka [2006] B.C.C. 841. For a general discussion see G. Moss and M. Haravon “‘Building Europe’ – The French Case Law on COMI” (2007) 20 Insolvency Intelligence 22.

⁶⁶ See Eidenmuller, H. “Free Choice in International Company Insolvency Law in Europe” (2005) 6 European Business Organisation Law Review 423 at 428CrossRefGoogle Scholar.

⁶⁷ [2006] B.C.C. 861.

⁶⁸ Case C-341/04 Re Eurofood IFSC Ltd [2006] E.C.R. 1-03813.

⁶⁹ Re Eurofood IFSC Ltd [2006] E.C.R. 1-03813 at para 37.

⁷⁰ Re Eurofood IFSC Ltd [2006] E.C.R. 1-03813 at para 35.

⁷¹ Eurotunnel Finance Ltd, Paris Commercial Court, 2 August 2006. For discussion see J. McEvoy and N. Peretz “Finding the COMIs in a Post-Cold War World: The Challenges of Multinational Corporate Group Insolvencies” available on American Bankruptcy Institute website, www.abiworld.org/.

⁷² Re Eurofood IFSC Ltd [2006] E.C.R. 1-03813 at para]. [111 of the opinion of the Advocate General.

⁷³ 4 July 2002 (unreported). The case is discussed in an article by Michael Crystal Q.C., “The Location of the Debtor's ‘Centre of Main Interests’” (2002) 23 Company Lawyer 359; see also Franken, S. “Three Principles of Transnational Corporate Bankruptcy Law: A Review” (2005) 11 European Law Journal 232 at 253CrossRefGoogle Scholar.

⁷⁴ [2006] B.C.C. 681.

⁷⁵ [2006] B.C.C. 681 at 687. It must be remembered however, that the connecting factor under the Regulation is “centre of main interests” and not “head office functions”. While the latter may supply useful guidance it should not be substituted for the former.

⁷⁶ “Global Venue Controls are Coming: A Reply to Professor LoPucki” (2005) American Bankruptcy Law Journal 105; see also Bufford, S. “International Insolvency Case Venue in the European Union” (2006) 12 Columbia Journal of European Law 429Google Scholar.

⁷⁷ See generally on this whole area I. Mevorach, “The ‘Home Country’ of a Multinational Enterprise Group Facing Insolvency” (2008) 57 I.C.L.Q. 427; “Centralising Insolvencies of Pan-European Corporate Groups: a Creditor's Dream or Nightmare? [2006] J.B.L. 468.

⁷⁸ [2006] E.C.R. I-701. But see the contradictory decision of the English Court of Appeal in Shierson v. Vlieland-Boddy [2005] B.C.C. 949 that COMI was to be determined when the court was required to decide whether to open insolvency proceedings.

⁷⁹ While this view seems eminently sensible, it depends more on a purposive than a literal interpretation of Art. 3 of the Regulation.

⁸⁰ Eidenmuller, H., “Free Choice in International Company Insolvency Law in Europe” (2005) 6 European Business Organisation Law Review 423 at 430CrossRefGoogle Scholar.

⁸¹ [2005] B.C.C. 949.

⁸² [2005] B.C.C. 277.

⁸³ Hans Brochier Holdings Ltd v. Exner [2007] B.C.C. 127.

⁸⁴ Schedule B1 Insolvency Act 1986 para 5.

⁸⁵ Art. 16 of the Regulation.

⁸⁶ Re Eurofood IFSC Ltd [2006] E.C.R. 1-03813.

⁸⁷ This matter has now been rectified in the light of earlier proceedings in the Eurofood case.

⁸⁸ Re Eurofood IFSC Ltd [2006] E.C.R. 1-03813 at para 52.

⁸⁹ See also Re Staubitz-Schreiber [2006] E.C.R. I-701.

⁹⁰ [2004] 1 W.L.R. 174.

⁹¹ For a different view see Gabriel Moss, ‘The Love of Three Annexes: Council Regulation (EC) 603/2005 amending Annexes A, B and C to Regulation 1346/2000 on Insolvency Proceedings’ [2005] Insolvency Intelligence 74. ‘The clarification of the meaning of ‘administrators’ in Annex A does not, however, deal with the potential difficulty that out of court-appointed administrators may not be recognized outside the United Kingdom pursuant to the terms of the Regulation because of the lack of a court order. The doubts on this score are well known … . It is suggested that the safe course remains to go for a court appointment where there is any potential foreign involvement in the administration.’

⁹² The Virgos-Schmit Report on the draft EU Convention on Insolvency Proceedings (which preceded and foreshadowed the provisions of the Regulation) is to be found in an appendix to Moss, Fletcher and Isaacs, The EC Regulation on Insolvency Proceedings and also in an appendix to Fletcher, Insolvency in Private International Law.

⁹³ Insolvency Act 1986, Schedule B1 para 5.

⁹⁴ Re Eurofood IFSC Ltd [2006] E.C.R. 1-03813 at para. [66].

⁹⁵ [2006] B.C.C.841.

⁹⁶ If main insolvency proceedings have been commenced in relation to a company in another Member State, even proceedings of a “rescue” nature, an English court is precluded by the Regulation from making an administration order but may open secondary liquidation proceedings. For criticism see Fletcher, Insolvency in Private International Law, 371.

⁹⁷ Article 31.

⁹⁸ Article 37 of the Regulation. The provision however, is ambiguously worded. The liquidator in the main proceedings may make the conversion request “if this proves to be in the interests of the creditors in the main proceedings”. But can the court second guess the liquidator's opinion on this point?

⁹⁹ Article 33.

¹⁰⁰ Westbrook, J.L. “A Global Solution to Multinational Default” (2000) 98 Michigan Law Review 2276 at 1284CrossRefGoogle Scholar.

¹⁰¹ See the comments of the ECJ in the Trummer case Case C-222/97, Trummer and Mayer [1999] E.C.R. 1-1661 at para 30: “It should be noted that a Member State is entitled to take the necessary measures to ensure that the mortgage system clearly and transparently prescribes the respective rights of mortgagees inter se, as well as the rights of mortgagees as a whole vis-à-vis other creditors. Since the mortgage system is governed by the law of the State in which the mortgaged property is located, it is the law of that State which determines the means by which the attainment of that objective is to be ensured.”

¹⁰² See Eidenmuller, H., “Free Choice in International Company Insolvency Law in Europe” (2005) 6 European Business Organisation Law Review 423 at 446CrossRefGoogle Scholar.

¹⁰³ According to the ECJ in Gebhard v. Consiglio di Milano Case C-55/94 [1995] E.C.R. 4165 any measures “liable to hinder or make less attractive the exercise” of the freedom of establishment “must be applied in a non-discriminatory manner; they must be justified by imperative requirements in the public interest; they must be suitable for securing the attainment of the objective which they pursue, and they must not go beyond what is necessary in order to attain it.”