The new EU Regulation on insolvency proceedings
By Dr Attila Kovács, Kovács Réti Szegheõ Attorneys at Law
The new Regulation (EU) No. 2015/848 on insolvency proceedings will enter into force in a few months. The new regulation is to replace Council Regulation (EC) No. 1346/2000, which is currently in force, in proceedings to be opened after 26 June 2017.
The new regulation amends and supplements several points of the existing legislation in force in terms of jurisdiction. The new EU Regulation contains the definition of the centre of main interests of the debtor, which is also used as the grounds on which the jurisdiction of the court is based in the regulation currently in force, where it is not specified. The centre of main interests is the place where the debtor conducts administration of its interests on a regular basis and which is ascertainable by third parties.
The new regulation also incorporates the presumption that “the place of the registered office shall be presumed to be the centre of its main interests in the absence of proof to the contrary”, which is familiar from the prevailing rules. However, in order to avoid “forum shopping”, a provision is added to the new regulation providing that the presumption of the registered office shall only apply if the registered office has not been moved to another Member State within the 3-month period prior to the request for the opening of insolvency proceedings.
The courts will have a new obligatory task to specify the grounds on which their jurisdiction is based in their decisions opening proceedings, and in particular whether their jurisdiction is based on the provisions of Article 3 Paragraph (1) or (2) of the regulation.
This provision is important because the new regulation provides an opportunity for the debtor or any creditors to challenge the decisions to instigate main insolvency proceedings before a court on grounds of international jurisdiction or on other grounds if allowed by national legislation.
Another change in relation to jurisdiction worth highlighting is that the courts of the Member State within the territory in which insolvency proceedings have been opened shall have jurisdiction for any action which derives directly from the insolvency proceedings and is closely linked with them, such as avoidance actions.
Dr. Attila KovácsKovács Réti Szegheõ Attorneys at Law, Budapest, Hungary
T: +361 275 27 85
Kovács Réti Szegheő Attorneys at Law, established in 1992, is one of the oldest independent Hungarian law firms. It is active in Hungarian, English, German and Italian and operates over a wide spectrum within the fields of civil and business law, for both domestic and international clients. Kovács Réti Szegheő Attorneys at Law has gained immersive experience in the fields of corporate law, mergers and acquisitions, construction law, real estate law, securities law, bankruptcy law, labour and employment, competition law and intellectual property law.
Attorney-at-law and senior lawyer, Dr. Attila Kovács graduated in 1996. After gaining professional experience in Hungarian and German law offices, he became a member of Kovács Réti Szegheő, and has been a Managing Partner since 2004. He speaks Hungarian, English and German and his primary areas of practice are bankruptcy law, real estate law and corporate law.
Published: Spring 2017 l Photo: Colourbox.de - Vlad Siaber