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Prevention of Forum Shopping in European Insolvency Law

Published online by Cambridge University Press:  28 July 2010

Marek Szydło
Affiliation:
PhD, Dr Habil., Professor at the University of Wrocław.
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Abstract

The Union legislator and the ECJ are trying to prevent forum shopping in cross-border insolvency cases through recourse to the following legal instruments: (1) guiding the process of interpreting the notion of COMI and determining that COMI in practice so as to avoid forum shopping; (2) determining the moment relevant for establishing the debtor's COMI, which should be relatively early; (3) introducing the perpetuatio fori principle that can frustrate debtors' attempts to transfer their COMI to another Member State; and (4) making it impossible to change international jurisdiction in cross-border insolvency matters after insolvency proceedings have been opened. However, there is no need to exclude the possibility of a transfer of the debtor's COMI that leads to the effective change of international jurisdiction before the request for the opening of insolvency proceedings is lodged, as it would be contrary to the freedom of establishment. It is thus submitted that in order to facilitate the exercise of fundamental freedoms, international jurisdiction in cross-border insolvency cases should be (de lege ferenda) determined not so much by the COMI as by the location of the registered office (statutory seat) of the debtor.

Type
Articles
Copyright
Copyright © T.M.C. Asser Press and the Authors 2010

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