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    Judicial Wing News 2015


    27 judges from 23 different European states belong to the Judicial Wing of INSOL EUROPE. In 2015 year the Wing won six new members: Ildikó Balázs, Metropolitan Court of Budapest, from Hungary, Caroline Costello, High Court of Dublin, from Ireland, Harry Hopmans, District Court of Zeeland-West-Brabant, from The Netherlands,  Jovan Kordic, Commercial Court in Belgrade, from Serbia, Bárbara Córdoba from Spain and Fatri Islamaj, Chairman of Tirana District Court, from Albania.

    The members of the wing discussed the suggestion from Judge Csőke from Hungary that in the future each judge would give the Judicial Wing a short ‘update-report’ informing members of any significant changes in the insolvency law of the judge’s member state. There was general agreement that this was a good idea and would be a useful addition to the work members undertook on behalf of the Wing.
     
    During the annual meeting in Berlin last year the Judicial Wing discussed the following topic: In general the new European Insolvency Regulation (EIR) and in particular the following four individual topics:
    1. COMI (center of main interest)
    2. Amendments of secondary insolvency proceedings
    3. Communication and cooperation of the insolvency judges and insolvency administrators
    4. New provisions concerning group insolvency

    Therefore a few members presented their contributions.

    Luciano Panzani gave members an introduction to the changes which will come into force with the recast EU Insolvency Regulation 2015/848 in 2017 and initiated a discussion on these changes.  There was particular emphasis on the provisions relating to group insolvency, which were generally expected to be unnecessarily expensive and impracticable, with some criticism (including from the German judges) as to the German Ministry’s role in having these group provisions inserted into the recast regulation. Discussion also covered cooperation and communication, with reference to the success of Co-Co in North America and the approach of Uncitral. The Judicial Wing were told about the progress of the Uncitral Working Group 5, and the real problems which any attempt to harmonise insolvency laws will inevitably face as a consequence of Governmental concern for employment where the liquidator of a local enterprise is a foreign national.

    Andrea Csőke drew attention to the provisions in the recitals to the recast regulation as to COMI and suggested that under the recast Regulation there might be a distinction to draw between ‘good’ and ‘bad’ forum shopping. This led to some debate as to what might constitute good forum shopping.
    Kersti Kerstna-Vaks gave a presentation on the new provisions in the recast Regulation for Cooperation and Communication between Judges, and between Judges and Insolvency Practitioners. This lead to a discussion as to the manner in which IPs in individual jurisdictions might raise matters with Judges in their own jurisdictions. It being pointed out that the requirement in IPs to communicate with Judges under Article 43 of the recast Regulation was mandatory there was discussion as to the difficulties this might cause in those jurisdictions (former Eastern bloc countries) where communication between the judiciary and IPs was forbidden in law. How could a judge who was precluded from communicating with an IP in his/her own jurisdiction reconcile this with an obligation under the Regulation to communicate with an IP from another jurisdiction?  There being an obligation on IPs from different jurisdictions to communicate with each other (under Article 41) would the result be an indirect line of communication opening up between the judge and the IP in his/her jurisdiction via the foreign IP? In some jurisdictions Judges have clerks who are present at hearings and who may communicate with parties on behalf of the judge. The extent to which this would truly be judicial communication was considered.

    There was general agreement that there was a strong need for a clear and reliable record to be kept in whatever language the communication took place and the need for this record to be capable of being understood by local litigants and creditors.

    Another potential problem discussed was that which might arise in those jurisdictions which did not impose particular professional qualifications on IPs. In countries where, eg a pharmaceutical engineer might act as the IP for a pharmaceutical company, what difficulties might arise when there was a need for communication with a foreign judge.

    Marie-Jose Geradts gave a presentation on pre-packs, a recent development in Dutch law. This represented an acceptance by the Dutch Parliament of an ad hoc position which had been developed by a number of substantial Dutch law firms. Concerned that they were losing work to England these firms had developed a system whereby a notional appointment of a ‘prospective’ IP was made to bring in a pre-pack which, if successful in generating an agreement for sale and purchase, could later be adopted by the IP (duly appointed) once formal insolvency proceedings were commenced. 8 out of the 11 Dutch insolvency courts had shown a willingness to countenance this ad hoc procedure.  Strictly it had been illegal, as an IP could have no authority to act as such before proceedings had been opened and an insolvency judge had made a formal appointment. With the approval of Parliament this process had now become legitimate and was being operated with some success by Dutch IPs. There was then a general discussion on a variety of matters arising out of the presentations.
    Jeanette Melchior gave a presentation on discharge from bankruptcy and release from debts under Danish law – or rather the absence of release from debt. The main thrust of the presentation is set out on page 32 of the Judicial Wing booklet. This led to an interesting discussion as to the considerable differences there exist between European jurisdictions on this topic, an extremely important matter for individuals who become bankrupt. It was decided that this would usefully form the subject of a Judicial Wing publication in 2016. Rimvydas Norkus gave a presentation of his paper on recent developments in Lithuanian insolvency law, see pages 34 to 36 of the Judicial Wing booklet.  It was interesting to learn that even as President of the Supreme Court of Lithuania he is subject to allocation of case-load by computer. This is now common throughout the jurisdiction (and Lithuania is only one of several jurisdictions employing random selection of judges to case by computer) there being such concern as to who among the judiciary should be allocated to try individual cases.
     
    It was agreed that each member would contribute to a publication on the Discharge of Natural Persons and Release from Debts in individual Member States in the EU. Members were asked to ensure that their contributions were ready by 31 March 2016.

    Rosa Hermans will leave the Judicial Wing as she had (to her very great regret) been moved away from insolvency and commercial work. Rosa Hermans has been a member of the Judicial Wing since the second meeting and her contributions will be greatly missed.

    Judge Professor Vallender reminded members that the next Judicial Wing meeting would be on 22 September 2016 near (rather than in) Lisbon.
    2014 News

    Free Judicial Training Sessions on Cross-Border Insolvency Proceedings

    3-4 November (Riga) and 1-2 December (Amsterdam) 2014

    Cooperation and communication between judges is necessary to facilitate efficient cross-border insolvency proceedings. To this end professors Bob Wessels (Leiden Law School) and Paul Omar (Nottingham Law School) have developed ‘EU Cross-Border Insolvency Court-to-Court Cooperation Principles and Guidelines’ (‘JudgeCo Project’). This project is sponsored by the European Commission as well as the International Insolvency Institute. As of November 2014 free training sessions take place to familiarise judges from across Europe with these Principles and Guidelines.


    What can judges do to have less cases like ‘KPN Quest’ and more ‘Trident’ Cases (see Eurofenix, issue Summer 2014)? The JudgeCo Principles and Guidelines provide clear guidance for more efficient proceedings. The training sessions aim to familiarise judges with the JudgeCo Principles and Guidelines and give them the opportunity to comment on their usefulness in practice. Also, it allows judges to enlarge their European network and to discuss other pending issues with colleagues.

    Free Judicial Training Sessions
    Two more training sessions will take place in Riga (3-4 November, to be confirmed), and Amsterdam (1-2 December). All judges deciding on matters of insolvency are offered the chance to participate in a two-day interactive training. Once accepted as a participant, travel and reasonable accommodation costs are covered by the project.

    Programme

    The programme of the training sessions is tentatively scheduled to start around noon at day one. The reform of the European Insolvency Regulation and the JudgeCo Principles and Guidelines will then be discussed. The day will conclude with a dinner. On day two workshops will take place to actively discuss and experience the working of the JudgeCo Priniciples and Guidelines. The training session will finish around 13:00 CET. For the training sessions, venues are chosen that can be reached easily.

    Registration

    For more information on and registration for the Judicial Training Sessions visit:
    www.tri-leiden.eu/projects/judgeco-project, or contact the organisers via:
    judgeco@law.leidenuniv.nl.
     
    Reviewing the Principles and Guidelines

    The reporters welcome all comments on the Final Public Draft of the JudgeCo Principles and Guidelines by 15 October 2014. The Principles and Guidelines can be downloaded here.
    2011 News
     
    European Insolvency Regulation

    The topic of the meeting in Venice in September 2011 was the reform of the European Insolvency Regulation. Article 46 EIR states that the Commision shall present a report on the application of the Regulation, to the European Parliament, the Council and the Economic and Social Committe, no later than the 1st June 2012.  This report serves as a means to evaluate the application of the EIR and may include proposals for adapting the EIR.  The Wing seized this chance to engage in the project.  The meeting agreed that the Judicial Wing should consider preparing a commentary on Article 31 EC Regulation on Insolvency Proceedings No 1346/2000 with suggested amendments to the current text of this article.  If appropriate this will form part of the INSOL Europe submission to the EC Commission proposing alternations to the text of the EC Regulation.
     
    During the annual meeting in Berlin 2015 the Judicial Wing discussed the following topic: In general the new European Insolvency Regulation (EIR) and in particular the following four individual topics:
    1. COMI (center of main interest)
    2. Amendments of secondary insolvency proceedings
    3. Communication and cooperation of the insolvency judges and insolvency administrators
    4. New provisions concerning group insolvency
    Therefore a few members presented their contributions.

    Luciano Panzani gave members an introduction to the changes which will come into force with the recast EU Insolvency Regulation 2015/848 in 2017 and initiated a discussion on these changes. There was particular emphasis on the provisions relating to group insolvency, which were generally expected to be unnecessarily expensive and impracticable, with some criticism (including from the German judges) as to the German Ministry’s role in having these group provisions inserted into the recast regulation. Discussion also covered cooperation and communication, with reference to the success of Co-Co in North America and the approach of Uncitral. The Judicial Wing were told about the progress of the Uncitral Working Group 5, and the real problems which any attempt to harmonise insolvency laws will inevitably face as a consequence of Governmental concern for employment where the liquidator of a local enterprise is a foreign national.

    Andrea Csőke drew attention to the provisions in the recitals to the recast regulation as to COMI and suggested that under the recast Regulation there might be a distinction to draw between ‘good’ and ‘bad’ forum shopping. This led to some debate as to what might constitute good forum shopping.

    Kersti Kerstna-Vaks gave a presentation on the new provisions in the recast Regulation for Cooperation and Communication between Judges, and between Judges and Insolvency Practitioners. This lead to a discussion as to the manner in which IPs in individual jurisdictions might raise matters with Judges in their own jurisdictions. It being pointed out that the requirement in IPs to communicate with Judges under Article 43 of the recast Regulation was mandatory there was discussion as to the difficulties this might cause in those jurisdictions (former Eastern bloc countries) where communication between the judiciary and IPs was forbidden in law. How could a judge who was precluded from communicating with an IP in his/her own jurisdiction reconcile this with an obligation under the Regulation to communicate with an IP from another jurisdiction?  There being an obligation on IPs from different jurisdictions to communicate with each other (under Article 41) would the result be an indirect line of communication opening up between the judge and the IP in his/her jurisdiction via the foreign IP? In some jurisdictions Judges have clerks who are present at hearings and who may communicate with parties on behalf of the judge. The extent to which this would truly be judicial communication was considered.

    There was general agreement that there was a strong need for a clear and reliable record to be kept in whatever language the communication took place and the need for this record to be capable of being understood by local litigants and creditors.
    Another potential problem discussed was that which might arise in those jurisdictions which did not impose particular professional qualifications on IPs. In countries where, eg a pharmaceutical engineer might act as the IP for a pharmaceutical company, what difficulties might arise when there was a need for communication with a foreign judge.

    Marie-Jose Geradts gave a presentation on pre-packs, a recent development in Dutch law. This represented an acceptance by the Dutch Parliament of an ad hoc position which had been developed by a number of substantial Dutch law firms. Concerned that they were losing work to England these firms had developed a system whereby a notional appointment of a ‘prospective’ IP was made to bring in a pre-pack which, if successful in generating an agreement for sale and purchase, could later be adopted by the IP (duly appointed) once formal insolvency proceedings were commenced. 8 out of the 11 Dutch insolvency courts had shown a willingness to countenance this ad hoc procedure.  Strictly it had been illegal, as an IP could have no authority to act as such before proceedings had been opened and an insolvency judge had made a formal appointment. With the approval of Parliament this process had now become legitimate and was being operated with some success by Dutch IPs. There was then a general discussion on a variety of matters arising out of the presentations.

    Jeanette Melchior gave a presentation on discharge from bankruptcy and release from debts under Danish law – or rather the absence of release from debt. The main thrust of the presentation is set out on page 32 of the Judicial Wing booklet. This led to an interesting discussion as to the considerable differences there exist between European jurisdictions on this topic, an extremely important matter for individuals who become bankrupt. It was decided that this would usefully form the subject of a Judicial Wing publication in 2016. Rimvydas Norkus gave a presentation of his paper on recent developments in Lithuanian insolvency law, see pages 34 to 36 of the Judicial Wing booklet. It was interesting to learn that even as President of the Supreme Court of Lithuania he is subject to allocation of case-load by computer. This is now common throughout the jurisdiction (and Lithuania is only one of several jurisdictions employing random selection of judges to case by computer) there being such concern as to who among the judiciary should be allocated to try individual cases.
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