Vol 3 (2006) - Issue 2

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EC Regulation on Insolvency Proceedings – Recent Decisions on Shifting and Changing the COMI

1. Introduction
Since EC Regulation No. 1346/2000 of 29 May 2000 on Insolvency Proceedings (the ‘Regulation’) has established a uniform standard for international jurisdiction
within the European Community, its article 3, in particular, has repeatedly been the key subject of court decisions. In fact, determination of international jurisdiction for insolvency proceedings is currently one of the most controversially discussed legal topics. For instance, a ruling of the English Court of Appeal1 was required to clarify the question as to what was the relevant date for determining the centre of main interests (‘COMI’) within the meaning of the Regulation. The underlying fact in the case was that prior to filing the insolvency application, the debtor had moved his domicile from England to Spain and now held that the English courts no longer had jurisdiction. The majority of the judges of the Court of Appeal considered the opening of the insolvency proceedings to be the relevant date. However, one judge took a differing view.
2. Current developments in legal practice
There are now two recent rulings that develop the criteria for interpreting article 3, paragraph 1 of the Regulation further. In the first, proceedings before the European Court of Justice were again concerned with the specific date for determining the COMI. In the second,
a German insolvency court ruled on what effect is produced by a cessation of business operations before the filing of the insolvency application. In both proceedings,the jurisdiction of German insolvency courts was in question.
2.1 European Court of Justice – Staubitz-Schreiber
On 17 January 2006,2 the European Court of Justice ruled on a case, in which the debtor had moved her domicile (and thus the COMI) from Germany to Spain after the filing of the application. The Wuppertal Local Court [Amtsgericht], the insolvency court properly having jurisdiction pursuant to German law, refused to open proceedings due to lack of assets. The appellate court rejected the appeal on the grounds that, pursuant to article 3, paragraph 1 of the Regulation, German courts no longer had international jurisdiction due to the change of domicile. During the appeal on points of law, the German Federal Court of Justice referred the matter to the European Court of Justice for a ruling on whether the courts of a member state still retain jurisdiction over the decision to open insolvency proceedings even if the debtor has transferred its domicile to the territory of another member state after the filing of the application.