- •Acknowledgements
- •Table of Contents
- •List of Cases
- •List of Legal Instruments
- •Introduction
- •1 Research Background
- •(A) Multinational Corporation Groups
- •(B) The Importance of Legal Certainty to MCG Insolvency Cases
- •(C) Abusive Forum Shopping
- •(D) Background on European Insolvency Regulations
- •2 Research Questions
- •3 Research Methodology
- •4 Structure of the Thesis
- •(A) The Concepts of Limited Liability, Separate Legal Personality, and Lifting the Veil
- •(B) Corporate Groups in UK Case Law
- •(C) Post Adams Era and the Problems of the Company Law Approach
- •1.2 The Conflict of Laws Perspective: Theories and Implications
- •(A) Universalism Theory in Insolvency Proceedings
- •(B) Modified Universalism Theory in Insolvency Proceedings
- •(C) The Principle of Territoriality
- •(D) The Principle of Cooperative Territoriality
- •(E) The Principle of Contractualism
- •1.3 Conclusion
- •2.1 The Notion of the COMI under the EIR 2000
- •(A) Importance of the COMI
- •(B) The Notion of the COMI
- •(C) Registered Office Approach vs Real Seat Approach
- •(A) Analysis of the Case of Daisytek ISA Limited: The ‘Head Office Function’ Approach
- •(B) Analysis of the Eurofood Case: The Registered Office Approach
- •2.3 Forum Shopping and European Insolvency Regulation
- •(A) The Implications of Forum Shopping in the Insolvency Regulation
- •(B) Preventing Abusive Forum Shopping
- •2.4 Conclusion
- •3.1 Substantive Consolidation
- •3.2 Coordination and Cooperation
- •(A) Procedural Coordination
- •(B) Enhanced Cooperation and Coordination
- •3.3 Harmonisation of Insolvency Laws within the EU
- •(A) Full Harmonisation
- •(B) Harmonisation of Selected Insolvency Topics
- •3.4 Party Autonomy
- •(A) International Protocols: An Effective Tool for Dealing with the Insolvency of MCGs
- •(B) Choice Model
- •3.5 Conclusion
- •4.1 Overview of the EIR Recast
- •4.2 Legal Certainty-Enhancing Provisions of the EIR Recast
- •(A) Secondary Proceedings
- •(B) Clarification of the Notion of the COMI
- •(C) Chapter V on Insolvency Proceedings of a Member of a Group of Companies
- •(i) Cooperation and Communication
- •(ii) Coordination
- •4.3 Opportunities for Reform
- •4.4 Conclusion
- •Conclusion
- •1 Cross-Border Insolvency of MCGs
- •2 Original Contribution
- •3 Future Research
- •4 Final Remarks
- •Bibliography
Towards Legal Certainty:
European Cross-Border Insolvency Law and Multinational Corporate Groups
Thesis submitted for the degree of Doctor of Philosophy
at the University of Leicester
by
Bader Juma Almaskari
School of law
University of Leicester
September 2016
Bader Juma Almaskari
Towards Legal Certainty: European Cross-Border Insolvency Law and Multinational
Corporate Groups
Abstract
The proliferation of multinational company groups in global trade brings new challenges to cross-border insolvency and subjects creditors to an excessive amount of legal uncertainty, which may put them at a disadvantage. This Thesis examines the extent to which European insolvency regulations, namely, the European Insolvency Regulation 2000 (EIR 2000) and the Recast European Insolvency Regulation 2015 (New Recast EIR 2015) enhance legal certainty and reduce the opportunity for abusive forum shopping, to the benefit of creditors in cross-border insolvency cases of multinational company groups. This Thesis provides an original approach to analysing this problem by first examining the issue from a company law perspective and a conflict of laws perspective. The Thesis then critically examines the EIR 2000 and demonstrates that the notion of the Centre of Main Interest (COMI) on its own is not capable of providing a satisfactory solution to the problem of the lack of legal certainty, especially as the regulation and the jurisprudence of the courts do not greatly help in adding more certainty to the meaning of the COMI. This is followed by examining proposals for enhancing legal certainty outside the EIR 2000, before critically examining the New Recast EIR 2015 by analysing the new provisions on secondary proceedings, the clarifications of the notion of the COMI, and the new chapter on groups. The Thesis concludes by acknowledging that the New Recast EIR 2015 has filled many of the gaps of the EIR 2000 and contributed to enhancing legal certainty in the cross-border insolvency of Multinational Corporate Groups (MCGs) for the benefit of creditors, but there is still room for improvement, especially as many of the tools found in the New Recast EIR 2015 are voluntary in nature. The concluding chapter ends by identifying new areas of potential research in this field.
i
Acknowledgements
There are many people who stood by me and supported me throughout my PhD journey. I would like to start by expressing my gratitude to my supervisors: Dr Stellios Andreadakis and Dr Diana Sancho Villa. They guided me through this journey and provided me with insightful feedback that helped improve my work. I would not have been able to reach this far without them. I would also like to thank Dr Lorna Gillies who was my original supervisor and encouraged me to undertake a PhD at Leicester. I would also like to thank all the amazing people I had the privilege of meeting at Leicester and who were there for me throughout the years, such as the excellent staff at the University Of Leicester School Of Law as well as my PhD colleagues. Thanks also go to Sultan Qaboos University for funding my studies and providing me with the opportunity to pursue a PhD. I would also like to thank Riyadh Al Balushi for his support. Finally, I would like to thank my family, especially my wife, for her everlasting love and support.
ii
Table of Contents |
|
Acknowledgements ............................................................................................................... |
ii |
Table of Contents ............................................................................................................ |
iii |
List of Cases..................................................................................................................... |
vi |
List of Legal Instruments................................................................................................... |
x |
Introduction ..................................................................................................................... |
1 |
1 Research Background ............................................................................................................ |
2 |
(A) Multinational Corporation Groups............................................................................................ |
2 |
(B) The Importance of Legal Certainty to MCG Insolvency Cases................................................... |
8 |
(C) Abusive Forum Shopping......................................................................................................... |
11 |
(D) Background on European Insolvency Regulations .................................................................. |
14 |
2 Research Questions............................................................................................................. |
21 |
3 Research Methodology........................................................................................................ |
22 |
4 Structure of the Thesis ........................................................................................................ |
26 |
Chapter 1: Perspectives on Company Law and Conflict of Laws....................................... |
30 |
1.1 Cross-border Insolvency of MCGs: The Company Law Perspective...................................... |
32 |
(A) The Concepts of Limited Liability, Separate Legal Personality, and Lifting the Veil ............... |
33 |
(B) Corporate Groups in UK Case Law........................................................................................... |
38 |
(C) Post Adams Era and the Problems of the Company Law Approach........................................ |
42 |
1.2 The Conflict of Laws Perspective: Theories and Implications .............................................. |
45 |
(A) Universalism Theory in Insolvency Proceedings ..................................................................... |
48 |
(B) Modified Universalism Theory in Insolvency Proceedings...................................................... |
53 |
(C) The Principle of Territoriality................................................................................................... |
55 |
(D) The Principle of Cooperative Territoriality.............................................................................. |
58 |
(E) The Principle of Contractualism............................................................................................... |
60 |
1.3 Conclusion ....................................................................................................................... |
63 |
Chapter 2: Centre of Main Interests as a Mechanism to Enhance Legal Certainty............ |
67 |
2.1 The Notion of the COMI under the EIR 2000 ...................................................................... |
69 |
iii
(A) Importance of the COMI ......................................................................................................... |
69 |
(B) The Notion of the COMI .......................................................................................................... |
71 |
(C) Registered Office Approach vs Real Seat Approach................................................................ |
74 |
2.2 The Jurisprudence of the CJEU and Selected National Courts on the COMI ......................... |
77 |
(A) Analysis of the Case of Daisytek ISA Limited: The ‘Head Office Function’ Approach ............. |
81 |
(B) Analysis of the Eurofood Case: The Registered Office Approach ........................................... |
85 |
2.3 Forum Shopping and European Insolvency Regulation....................................................... |
94 |
(A) The Implications of Forum Shopping in the Insolvency Regulation........................................ |
97 |
(B) Preventing Abusive Forum Shopping .................................................................................... |
102 |
2.4 Conclusion ..................................................................................................................... |
106 |
Chapter 3: Other Mechanisms for Enhancing Legal Certainty ....................................... |
108 |
3.1 Substantive Consolidation .............................................................................................. |
109 |
3.2 Coordination and Cooperation........................................................................................ |
119 |
(A) Procedural Coordination ....................................................................................................... |
119 |
(B) Enhanced Cooperation and Coordination ............................................................................. |
124 |
3.3 Harmonisation of Insolvency Laws within the EU............................................................. |
128 |
(A) Full Harmonisation ................................................................................................................ |
128 |
(B) Harmonisation of Selected Insolvency Topics....................................................................... |
133 |
3.4 Party Autonomy ............................................................................................................. |
135 |
(A) International Protocols: An Effective Tool for Dealing with the Insolvency of MCGs .......... |
135 |
(B) Choice Model......................................................................................................................... |
142 |
3.5 Conclusion ..................................................................................................................... |
145 |
Chapter 4: The New Recast EIR 2015: An Enhancement of Legal Certainty? .................. |
148 |
4.1 Overview of the EIR Recast ............................................................................................. |
149 |
4.2 Legal Certainty-Enhancing Provisions of the EIR Recast.................................................... |
156 |
(A) Secondary Proceedings ......................................................................................................... |
156 |
(B) Clarification of the Notion of the COMI ................................................................................ |
162 |
(C) Chapter V on Insolvency Proceedings of a Member of a Group of Companies.................... |
169 |
4.3 Opportunities for Reform ............................................................................................... |
178 |
4.4 Conclusion ..................................................................................................................... |
181 |
Conclusion.................................................................................................................... |
186 |
1 Cross-Border Insolvency of MCGs ...................................................................................... |
186 |
2 Original Contribution......................................................................................................... |
191 |
iv
3 Future Research ................................................................................................................ |
192 |
4 Final Remarks.................................................................................................................... |
194 |
Bibliography................................................................................................................. |
195 |
v