The final scheduled meeting of the EC Experts’ Group on Restructuring and Insolvency took place online on 28 January 2022. In the lead up to the last two meetings that preceded this event, taking place towards the end of 2021, two key documents were released giving an insight into a possible format for a draft text and some indication as to its contents and likely progress.

The first was the Commission Work Programme 2022, adopted on 19 October 2021, which contained over 40 policy initiatives for 2022, focusing on green, digital and post-pandemic resilience issues. It also mentioned the need for fully developed European capital markets to aid recovery from the pandemic, thus requiring massive investment beyond that delivered by public money and traditional bank lending. In this light, action in respect of insolvency is seen as a priority in order to enhance convergence, remove discrepancies, increase efficiency and facilitate cross-border investment. As such, the deepening of the Capital Markets Union (CMU) will feature a harmonisation initiative for 2022 Q3, slightly later than originally anticipated in Q2, the reason being to avoid a legislative logjam and create more of an opportunity to further finetune the proposals.

The second document was a new Communication on the second CMU Action Plan, first announced on 24 September 2020, on 25 November 2021. The action plan builds on the ambition to integrate national markets into a real and effective single market to facilitate cross-border investment. Action 11 in the document sets out the insolvency initiative as one of its key features, the reasoning being to help make the outcome of cross-border investment more predictable. In providing an update on progress on the action plan, the Communication refers to various legislative texts to be formulated for delivery soon as part of the proposed initiative.

Neither document refers expressly to a precise form for the insolvency initiative, which has been the subject of some debate throughout the deliberations of the Experts’ Group. Given the wide-ranging nature of the topics discussed, ranging from substantive to procedural law as well as capacity building issues, various vehicles, ranging from a Recommendation form to a formal Directive text, have already been suggested. In some cases, preferences have been expressed for a particular text form as being more appropriate for certain proposals. The option has also been canvassed for the separation of topics into different texts, if more than one is proposed.

At the 28 January 2022, a number of topics were on the agenda in the shape of sufficiently advanced recommendations and model frameworks for possible harmonisation. In the way the agenda was presented, it seems as if the discussion points anticipate a possible shortlist for the contents of a draft text or texts. The Commission has indicated that it will now prepare a first draft by March for consideration in the first stage of the decision-making process, after which a final version of the text will be agreed before it then embarks on the legislative process. To comfort its eventual decisions, two qualitative surveys have been commissioned that are currently in progress. These have also addressed many of the same issues that appear on the final agenda.

It will not be an easy ride. Throughout, the Experts’ Group has been conscious of the likely objections, whether to convergence or harmonisation or indeed in relation to every topic under discussion. If the text progresses, it will owe much to the calibre of the contributions to the discussions, drafting and deliberations. Many of these came from INSOL Europe members with undoubted expertise and experience derived from practice and academia. Nonetheless, this initiative to harmonise insolvency law is ambitious and much goodwill and good faith may prove necessary to see it through to a successful conclusion.

On behalf of the INSOL Europe EU Study Group led by Barry Cahir, Beauchamps:
INSOL Europe’s Technical Officer Myriam Mailly and Research Co-ordinator Paul Omar

We are very pleased to announce the launch of the sixth volume in a series of publications by INSOL Europe’s Judicial Wing titled “COVID-19: Which practical measures adapted by the insolvency courts because of the pandemic are desirable to become permanent changes of their practice?”

Download the publication in PDF format here

The articles in this volume describe how and to which extent the use of technology could help judges in different European countries to cope with the adverse impact of COVID-19 on their procedural work.

The information, authored by members of the Judicial Wing, shows a broad range of different approaches to deal with the conditions under the pandemic: from no specific legislation and measures at all to legislation permitting remote hearings quite liberally and an extensive use of audio-visual technology by some courts.

The articles show that the approaches taken to dealing with the pandemic largely depend on the available financial resources and on legal traditions. Therefore, a comparison of those approaches does not necessarily help in finding the best solution for a particular jurisdiction. However, the articles can help the reader to cherry-pick from the individual measures described in the articles and assemble them in a manner befitting the situation in the reader’s home jurisdiction.

We encourage the reader to read all articles in order to benefit from the entirety of useful information to be found there. Even though the use of audio-visual technology in civil and insolvency proceedings has not increased by a degree that might have been expected, the tenor of the articles is in favour of making remote hearings possible on a permanent basis. This tenor makes us confident that the number of technology prone judges will grow steadily and result in an increased but diligent use of the available technical equipment in civil and insolvency proceedings.

We thank all the members of the Judicial Wing who have contributed articles to this collection for their great efforts to bring this project to fruition. Our thanks are also extended to Michael Quinn’s former judicial assistant Lorna Reid for her support in all administrative matters and to INSOL Europe for its technical assistance.

Co-chairs of the Judicial Wing
Nicoleta Mirela Nastasie, Michael Quinn, Eberhard Nietze

The Richard Turton Award Panel is pleased to announce that the 2021 winner is Abbas Abbasov from Azerbaijan. Abbas is currently a PhD student at the Martin-Luther-Universität Halle-Wittenberg, in Germany, researching cross-border insolvency and restructuring law. He will be writing a paper on “Protection of dissenting creditors’ interests: Direct application of the “substantive fairness’’ test while considering the recognition of foreign restructuring plans”, which will be published in summary in one Eurofenix and in full here. As part of the award, Mr Abbasov is invited to attend the our Congress in Dublin in March 2022.

Apart from the European Insolvency Regulations applicable only between EU Member States, a few international instruments deal with the recognition issue relating to insolvency (and insolvency-related) judgments. Those international instruments, namely the UNCITRAL Model law (for those Member States which have enacted it), the Hague Convention or EU Rome I Regulation, may also be complemented by other specific private international rules. For third countries and the UK (as a consequence of Brexit), a great uncertainty remains therefore in terms of providing the necessary authority for the recognition of such judgments. The Joint project between LexisPSL and INSOL Europe on the recognition of foreign decisions in the 27 EU countries has been designed to address those situations and provide the readers with a description of each national recognition process applicable to those judgments.

As an added value, the proposal had been made by LexisPSL (UK) to make the exercise more concrete than a mere description of national provisions within the scope of this project. That is why the project contains the national provisions which would apply with regard to the recognition of proceedings commenced in the UK in respect of an English Part 26 scheme of arrangement or Part 26A restructuring plan (or the reasons why such recognition would be excluded). Indeed, this project includes restructuring proceedings and/or judgments commencing insolvency proceedings while international texts may exclude them from their scope of application.

This document was prepared by a team drawn from the INSOL Europe Country coordinators with the assistance of INSOL Europe members or other local experts where necessary to complete this valuable research project. Readers will find individuals answers of the contributors from the 27 EU countries but also a table summarising their findings which is reproduced in Appendix I of the publication. We hope that this publication will achieve its aim, namely to ensure that a proper consideration should be given to providing information for all professionals interested in questions arising under the International Private Law of Insolvency.

Download the final publication here. We wish you an insightful reading!