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EU Case Study:
Euro food IFSC Ltd 2006 ECJ (C-341/04) Regulation (EC) No 1346/20003- Judicial
cooperation in civil matters Decision to open the Insolvency proceedings Centre of the
debtor’s main interests (COMI) On February 20, 2004, the Parma court at Italy opened a
main insolvency proceeding for Euro food. It found that Euro food's centre of main interests
COMI’ was located in Italy, because its management and centre of control came from its
Parmalat parent that was located there. 41910-228346000 The Irish liquidator appealed, but
the Italian appellate court affirmed. On March 23, 2004, the Dublin High Court found that
Euro food's COMI was located in Ireland, because its registered office was located there and
it appeared to the third party creditors’ that its COMI was located in Ireland.
1
https://www.uncitral.org/uncitral/eu/uncitral-texts/insolvency/1997Mdel.html visited 10-03-2019
2
ibid
3
https://www.iiiglobal.org/sites/default/files/cordination_of__insolvency_cases.pdf visited 10-03-2019
1
The court additional control that associate degree Irish main continuing had opened on
twenty seven Gregorian calendar month 2004, when it had appointed the temporary
liquidator.
The Italian administrator appealed this decision to the Irish Supreme Court, which referred
the matter to the ECJ.
Questions for the ECJ a people Supreme Court referred queries on the interpretation of
the Regulation to the ECJ: What implanted the gap of financial condition proceedings among
the that means of the Regulation and that national court had jurisdiction to open main
financial condition proceedings?
What area unit the governing factors for determinative centre of main interests once the
registered workplace of a parent company and its subsidiary area unit placed in several
member states?
Whether a member state had to relinquish recognition to a call of another member state
purporting to open financial condition proceedings in respect of a soul, when that debtor had
not been given the right to fair procedures and a fair hearing Facts and Analysis The
European Court of Justice (ECJ)5 gave opinion on referral by Supreme Court of Ireland
of five queries of EU financial condition Regulation whether or not to open a main financial
condition continuing for Euro food IFSC Ltd in competition with a parallel main financial
condition case for a similar entity in Parma, Italy.
4
https://www.ebf-fbe.eu/publication/visited 10-03-2019
5
ibid
2
In re Euro food IFSC Ltd., [2004) IESC 45 (lr.).
The two parallel main proceedings arose because each court decided that Euro food's centre
of main interests (COMI) was located in its own country Case 341/04, Euro food IFSC Ltd,
2006 E.C.R._. (Euro food-ECJ)6.
According to the language employed in country version of the EU Regulation, a "proceeding"
corresponds to a "case" under U.S.
bankruptcy law. See, e.g., 11 U.S.C. §§ 301-03 (providing for the filing of a "case" under
the bankruptcy statute). 2 sets of factors necessary to determine the proper location of the
COMI of a subsidiary. Hence, first set of factors is the location where a debtor regularly
administered
its own interests, as ascertainable by third parties, and the country in which it is incorporated.
The second set of things arises from the placement of the parent company that, by virtue of its
ownership and power to appoint directors, is able to control the
policy decisions of the subsidiary.
Where (as within the Euro food proceedings), these factors point to different countries for the
location of the COMI, the court must determine the relative weight to give to each factor.
The criteria needed to be each objective and discoverable by third parties, typically the
debtor's major creditors.
As within the Euro food continuing, third parties might have undertaken sizeable to be sure of
the right target of debtors COMI .
6
https://www.ibbi.gov.in/wg-01%20Report.pdf visited 10-03-2019
3
USA Chapter fifteen Bankruptcy Code
Morning Mist Holdings Ltd. v. Krys (In re Fairfield picket Ltd.), No. 11-4376, 2013
BL 102426 (2d Cir. Apr. 16, 2013)7
U.S. Court of Appeals for the Second Circuit dominated that COMI should be
determined on the premise of the debtor’s “activities at or round the time the Chapter fifteen
petition is filed,” instead of on the commencement date of the foreign continuing.
Court could take into account the amount between the commencement of the foreign
financial condition continuing and therefore the filing of the Chapter fifteen petition to
confirm that a mortal has not manipulated its COMI in unhealthy religion.”
Factors that will be thought-about in determinative COMI, could embrace the debtor’s
liquidation activities.
7
https://law.justia.com/cases/federal/appellate.../11-4376/11-4376-2013-04-16-html.visited 10-03-2019
4
“COMI” underneath United States Bankruptcy Code :
Section 1517(b)8 of the Bankruptcy Code provides that
a “foreign continuing shall be recognized . . . as a remote main continuing if it's
unfinished within the country wherever the mortal has the centre of its main interests.”
The Bankruptcy Code doesn't outline “COMI.”
Section 1516(c) provides that, “[in] the absence of proof to the contrary, the debtor’s
registered workplace, or habitual residence within the case of a private, is probable to be” the
debtor’s COMI.
According to the statute’s legislative history, this presumption was enclosed “for
speed and convenience of proof wherever there's no serious contestation.”
An “establishment” is outlined in section 1502(2) as “any place of operations
wherever the mortal carries out a non-transitory economic activity.”
A bankruptcy petition was issued against him by HMRC within the kingdom in
Gregorian calendar month 2011. He then issued a debtor's petition for his own bankruptcy in
Jan 2012. He claimed he was within the kingdom on the date the petition was given, was
domiciled within the kingdom and had an area of residence within the kingdom inside the
previous three years, as needed by s265 financial condition Act 1986.
Kemsley was created bankrupt within the kingdom on twenty six March 2012 on his
own petition.
Bankruptcy Trustees were appointed in kingdom, applied for recognition of the united
kingdom bankruptcy in United States u/ Chapter fifteen (in August 2012).
8
https://www.mondaq.com/bankruptcy visited 10-03-2019
5
In re Paul Zeital Kemsley, 489 B.R. 346 (Bankr. S.D.NY 2013).
The United States bankruptcy court dominated that Kemsley's9 COMI was within the
United States as of such date as a result of "the Debtor's shut relationship along with his
youngsters is a helpful proxy for the Debtor's10 subjective intent relating to his habitual place
of residence."
At the time of the filing of the united kingdom continuing, he was living within the
United States along with his family, thus his COMI was then within the United States.
9
https://www.mondaq.com/COMI visited 10-03-2019
10
ibid
6
The Insolvency & Bankruptcy Code 2016
Agreements with foreign countries.
234. (1) The Central Government could enter into Associate in Nursing
agreement with the govt. of any country outside Republic of India for imposing the
provisions of this Code.
(2) The Central Government could, by notification within the Official Gazette, direct that the
appliance of provisions of this Code in regard to assets or property of company mortal or
mortal, together with a private warrantor of a company mortal, because the case is also, set at
anyplace during a country outside Republic of India with that reciprocal arrangements are
created, shall be subject to such conditions as is also specific.
Letter of request to a rustic outside
India in sure cases.
235. (1) nonetheless something contained during this Code or any law for the nowadays in
effect if, within the course of financial condition resolution method, or liquidation or
bankruptcy proceedings, because the case is also, underneath this Code, the resolution skilled,
liquidator or bankruptcy trustee, because the case is also, is of the opinion that assets of the
company mortal or mortal, together with a private warrantor of a company mortal, ar set
during a country outside Republic of India with that reciprocal arrangements are created
underneath section 23411, he could create Associate in Nursing application to the
Adjudicating Authority that proof or action with reference to such assets is needed in
reference to such method or continuing.
(2) The Adjudicating Authority on receipt of Associate in Nursing application underneath
sub-section (1) and, on being happy that proof or action with reference to assets underneath
sub-section (1) is needed thirty five in reference to financial condition resolution method or
liquidation or bank
11
https://www.mondaq.com/bankruptcy visited 10-03-2019