The latest issue (2022/2) of the Dutch/English journal  Nederlands Internationaal Privaatrecht is dedicated to cross-border involvency.

Editorial: P.M. Veder, De Wet internationaal insolventierecht / p. 203-207

Articles

Welling-Steffens, Hoofdlijnen voor een wettelijke regeling van het commune internationaal insolventierecht. Bevoegdheid inzake, toepasselijk recht op, en erkenning van ‘derde-lands’ insolventieprocedures en aanverwante vorderingen / p. 208-226

Abstract

This article outlines a proposal on principles for future Dutch legislation on international insolvency law in relation to foreign insolvency proceedings held in so-called third countries (i.e. non-EU states). Itcommences with an overview of the current status of the Dutch national private international law rulesin respect of jurisdiction in, the applicable law to and the recognition of foreign insolvency proceedings and related actions held in third countries. Other than three scant provisions in the Dutch Bankruptcy Act, there is no legislation in relation to international insolvency law regarding foreign non-EU insolvency proceedings and the current rules are all based on case law, culminating in the Yukos case decided by the Dutch Supreme Court. Subsequently, the author, inspired by such Dutch case law, previous proposals on international insolvency law in the Netherlands like the 2007 legislative pre-proposal of the Kortmann Committee on insolvency, the UNCITRAL Model Laws and the various proposals put forward in Dutch legal literature, outlines a proposal on principles for legislative rules on (indirect) jurisdiction in, the applicable law to and the recognition of foreign (non-EU) insolvency proceedings.

Madaus, The German law on the recognition of foreign insolvency and restructuring proceedings / p. 227-240

Abstract

The recognition of third country insolvency proceedings in Germany does not follow the mechanisms of the EIR but falls within the scope of the respective national frameworks of international insolvency law. While Germany did not adopt the UNCITRAL Model Law on Cross-Border Insolvency, §§ 335-359 InsO provide rules that in many respects even resemble those of the EIR 2000. The framework is more recognition-friendly than the Model Law and is accompanied by rules for the recognition of foreign judgments in civil and commercial matters as well as Private International Law rules on the recognition of any modification of substantive rights by foreign law. Non-EU main restructuring and insolvency proceedings including their plans – in particular US Chapter 11 plans – are thereby routinely recognized in Germany without any need for court involvement. The recognition of scheme-type procedures would be available under these frameworks, but probably not under the cross-border insolvency framework.

Garcimartín & N. Bermejo, Spanish national rules on cross-border insolvency proceedings: a symmetrical approach / p. 241-251

Abstract

This paper examines the Spanish national rules on cross-border insolvency proceedings applicable vis-à-vis non-EU countries (including Denmark) laid down in Book III of the Spanish Insolvency Act. These rules aim to extend unilaterally the model of mitigated universalism enshrined in the EU Regulation outside its scope of application. According to those rules, the main insolvency proceedings will be opened in Spain if the debtor has its centre of main interests (COMI) here in Spain and, as a result, their opening, as well as their effects, conduct and closure, will be regulated by the Spanish Insolvency Act (lex fori concursus), with certain exceptions. Likewise, territorial proceedings may be opened in Spain if the debtor’s COMI is located in a third country, but it has an establishment here. Likewise, the paper studies the specific rules for the recognition in Spain of insolvency proceedings opened in foreign (non-EU) countries (including Denmark) and the rules on coordination and cooperation between proceedings. In addition, it describes the rules on the publicity of insolvency proceedings, information for foreign creditors and the submission of their claims. Finally, it analyses the rule of negative reciprocity, which constitutes a general safeguard in the event of a lack of reciprocal cooperation by the corresponding third country.

T.H.D. Struycken, Grensoverschrijdende insolventieprocedures en rechten op goederen in andere landen / p. 251-276

Abstract

Article 8 of the EU Insolvency Regulation (2015 recast) dominates the current thinking on insolvency proceedings in relation to rights in rem in assets situated in other jurisdictions. Implicit in the rule is the assumption that recognition of foreign security interests is too complicated. Hence, rights in assets in other EU Member States are de facto excluded from the insolvency proceedings. This article analyses the justification for the rule in Article 8, and rejects it. Recognition of foreign rights in rem is, and should be, the basic principle in the Netherlands, both outside and inside cross-border insolvency proceedings. The author proposes not to mirror Article 8 when codifying the PIL rules for cross-border insolvency proceedings outside the scope of the EU Insolvency Regulation, and formulates a first draft for a possible statutory rule.

P.M. Veder, Verrekening in de Wet internationaal insolventierecht / p. 277-287

Abstract

The Dutch government has announced that it will prepare draft legislation to address the cross-border aspects of insolvency proceedings that fall outside the scope of the EU Insolvency Regulation. This article examines which rules should be included in such draft legislation concerning set-off. It critically analyzes the approach to set-off in the European Insolvency Regulation and looks at the current state of play at UNCITRAL. The conclusion is that, even though the approach to set-off in Article 9(1) EIR is not convincing – there is no sound justification for offering protection to a creditor on the basis of the law applicable to the insolvent debtor’s claim – the Dutch legislator would nevertheless be well advised to follow the rules in the EIR concerning the applicable law, including Article 9(1) EIR, as much as possible. By following the rules in the EIR on the applicable law, insolvency proceedings and their effects are governed by the same law, regardless of whether the EU Insolvency Regulation applies or not. This promotes legal certainty and the practical applicability of a statutory regulation of cross-border insolvency proceedings in Dutch customary private international law.

C.G. van der Plas, Informatievergaring door buitenlandse curatoren in Nederland – heden en toekomst / p. 288-302

Abstract

It is not uncommon for foreign bankruptcy trustees to encounter Dutch entities or Dutch bank accounts when settling the bankruptcy. Think, for example, of a foreign bankruptcy in which the bankrupt entity has siphoned off assets through a web of entities in various jurisdictions. In order to be able to follow the bankrupt’s trail across the border, the bankruptcy trustee needs information about those entities. This article examines the means of discovery available to a bankruptcy trustee in a foreign (non-EU) bankruptcy in the Netherlands. After identifying the problems that a foreign bankruptcy trustee may be confronted with under the current Dutch system, the possibilities offered by the UNCITRAL Model Law on Cross-Border Insolvency will be examined. The article concludes with a recommendation for a future amendment to the Dutch Bankruptcy Act.

Pepels, Het Nederlandse internationaal groepsinsolventierecht – cause for concern? / p. 303-318

Abstract

Following the drafting of the Dutch Bankruptcy Act in the 1890s, the manner in which large enterprises are legally organized has undergone significant changes. Multinational groups of companies have become an important driving force behind the Dutch and the European economies. Dutch domestic international insolvency law, however, does not address the issues that are specific to cross-border group insolvencies. In this article, the author sets out to analyze whether there is any need for a Dutch domestic law on cross-border group insolvencies and, if so, what the contours thereof should be. In doing so, the article discusses the provisions on cross-border group insolvency as introduced by the 2017 EU Insolvency Regulation (recast) and UNCITRAL’s 2019 Model Law on Enterprise Group Insolvency. As the Dutch legislator is currently evaluating the options to revise the Dutch Bankruptcy Act on the topic of domestic cross-border insolvency law, the article concludes with various recommendations on group insolvencies that could align the legal treatment of insolvent multinational groups of companies more with the economic reality.

A comprehensive and detailed volume by Dr. Lenka Válková was just released providing a dedicated analysis of the private international law framework as it applies to jurisdiction agreements in the framework of the EU Regulations in family and succession matters.

The blurb reads:

Party autonomy has been traditionally considered as one of the leading principles used in cross-border trade law. In fact, choice-of-court agreements have been embedded into the majority of EU Regulations governing civil and commercial matters. On the other hand, mandatory approach to family and succession law slowed down the progress of recognition of party autonomy in these fields. Only in recent years, the trend towards acknowledging choice-of-court agreements has spread into almost all areas of international family and succession law. This publication follows this development: firstly, it analyses the reasons and concerns of the recognition of choice-of-court agreements in civil and commercial matters, whereby it is questioned whether the considerations established in relation to commercial contracts may apply also for personal relationships. Consequently, different treatment of choice-of-court agreements family and succession law, where the freedom to choose the competent court is far from being unlimited, is examined. Accordingly, the attention must be paid to functions of choice-of-court agreements in family law. The second chapter subsequently investigates the position of parties in personal law relations and their protection. In particular, partial and full exclusion of party autonomy, formal and substantive validity, time limits, substantive review and public policy and overriding mandatory rules are considered as tools for protection of vulnerable parties in family and succession law relations when entering into choice-of-court agreements. Finally, last chapter provides for in-depth analysis of rules on choice-of-court agreements under different EU Regulations (the Brussels IIa and Brussels IIter Regulations, Maintenance Regulation, Regulations on Property Regimes and Succession Regulation), where the strengths and gaps of the rules are highlighted. This analysis includes also an attempt to clarify the problem of derogation from jurisdiction in favour of Third States in presence of choice-of-court agreements. Lastly, effectiveness of the rule on lis pendens in stress-tested.

Overall, in her manuscript Dr. Válková successfully combines complex theoretical analysis with concrete propositions in a multifaceted and developing area of the law. Notably, Dr. Válková exemplifies the contribution of party autonomy in private international law in addressing the challenges arising in the context of family relations in the cross-border context: in doing so, she illustrates the complex status quo of party autonomy in this area of the law, its limitations, and how policies may be promoted via private international law. As such, her book is a highly recommended source for academics, notaries, and legal practitioners.

Lenka VÁLKOVÁ, Choice-of-Court Agreements under the EU Regulations in Family and Succession Matters (Wolters Kluwer / CEDAM, 2022), 548 pp., available for purchase here.

This volume is a welcome addition to Wolter Kluwer / CEDAM’s already thriving ‘Studi e pubblicazioni della Rivista di diritto internazionale privato e processuale’ series.

Greece still forms part of the EU Member States group not recognizing same-sex marriage. Same-sex couples do enjoy however some rights. The latest challenging issue concerned custody rights of a same-sex couple married abroad. The Thessaloniki Court of Appeal reversed the first instance ruling, and recognized an English custody order [Thessaloniki CoA, decision published on January 24, 2022, unreported].

FACTS: The appellant (Parent A) is a woman of Greek and American nationality. Her partner was a woman of American national (Parent B). They registered their partnership in the UK on 20 August 2013. Nearly a month later, Parent B gave birth to a child. The partners married in January 2015. Parent A. filed an application for child custody and parenting arrangements order in the UK. The court granted the application, and ordered that the child stays with the psychological (non-biological) mother on the basis of previous decisions concerning parental responsibility rights issued in the same country. In addition, the court ordered that the child reside with Parent A., and it issued an order to remove the child permanently to Greece. Finally, the same court arranged the contact rights of the biological mother. The UK order was issued by the High Court – Family Division in Chelmsford, and it was final. Parent A. filed an application for the recognition and enforcement of the UK order before the Court of First Instance in Thessaloniki.

The Court refused recognition. It entered into an analysis of the public policy defense, culminating in the conclusion, that the forum judge is obliged to defend national public policy, while at the same time demonstrating respect towards the state’s international obligations. To that end, a proportionality test of the domestic public policy with Article 8 ECHR standards is imperative. Following the above introduction, the court declared that same-sex marriage, and any subsequent relations emanating thereof are not allowed in Greece. A detailed presentation of the first instance court reasoning may be found here.

Parent A appealed.

THE DECISION: Unlike the lower instance court, the Thessaloniki CoA primarily underlined the European context of the dispute, citing Articles 21 et seq of the Brussels II bis Regulation. It then referred to a significant number of pertinent provisions, such as: Articles 8, 12 and 14 of the European Convention of Human Rights; articles 23 and 26 of the International Covenant on Civil and Political Rights (ICCPR); articles 7 and 9 of the Charter of Fundamental Rights; the Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation; Greek Civil Union law nr. 4356/2015; article 21 of the Greek Constitution, on the protection of family; directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States; and finally, articles 2 and 3 of the United Nations Convention on the Rights of the Child (UNCRC), ratified in Greece by law nr. 2101/1992.

On the grounds of the above references, the CoA found no violation of the Greek public policy, and reversed the ruling of the first instance court. In particular, the CoA emphasized two points:

• The diversity of views, i.e., the non-recognition of same sex marriage in Greece may not result to the infringement of the child’s best interests, reflected in the UK court findings.
• The ruling of the first instance court results to the discrimination of children on the grounds of their parents’ sexual orientation.

The battle for full equality is not yet won. A couple of days after the decision of the Thessaloniki CoA was published, the Athens CoA refused recognition to a South African adoption decree issued upon the application of a same-sex (male) couple. Yet again, public policy was the defense hindering recognition. To sum up: Same sex couples may not marry or adopt children in Greece; they may however be appointed as foster parents, and exercise custody rights. Hence, equality evolves in a piecemeal fashion. And last but not least, let us not forget: the Supreme Court has the final word.

(by Krzysztof Pacula and Thalia Kruger)

Starting from 1 August 2022, the Regulation (EU) 2019/1111 of 29 June 2019 on jurisdiction, the recognition and enforcement of decisions in matrimonial matters and the matters of parental responsibility, and on international child abduction (recast) became fully applicable, replacing the Brussels II Regulation. This Regulation is called Brussels IIter by some; Brussels IIb by others, Brussels IIbis (recast) by yet others, or simply Regulation 2019/1111 (thanks to its easy number). Brussels IIb will probably prevail, as this is the name that the Commission seems to be opting for.

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