Introduction

‘Forum shopping is a dirty word; but it is only a pejorative way of saying that, if you offer a plaintiff a choice of jurisdiction, he will naturally choose the one in which he thinks his case most favourably be presented; this should be a matter neither for surprise nor for indignation.’1 Lord Simon

This Thesis examines the European Union insolvency rules, specifically, the European

Insolvency Regulation (EIR 2000) and the Recast European Insolvency Regulation (New

Recast EIR 2015), in order to determine whether such rules help enhance legal certainty in

cross-border insolvency cases involving multinational corporate groups (MCGs). The

objective therein is protecting creditor interests through the reduction of abusive forum

shopping.

Many major companies now use complex structures that involve multiple levels of

subsidiaries.2 Such structures are used to achieve economic and administrative advantages.3

As noted by Hannigan, it may also ‘make geographic sense depending on the nature of the

company’s business’ for a multinational company to divide its activities through

subsidiaries.4 The problem of cross-border insolvency with MCGs is a very timely one,

especially in light of the global growth of international trade, the movement towards the

economic integration of various regions around the world, such as the European Union, the

1The Atlantic Star [1974] AC 346, 471.

2Subsidiary company: a subsidiary company is a company that is owned or controlled, directly or indirectly, by a parent company. A subsidiary company may be wholly owned by a single parent company, or may partially owned by several parent companies. Subsidiary companies have a separate legal personality from their parent companies and consequently a parent company cannot be held liable for the debts of the subsidiary except in cases where the veil may be lifted. For more on subsidiaries, see Henry Ballantine, ‘Separate Entity of Parent and Subsidiary Corporations’ (1925)14 California Law Review 12.

3Irit Mevorach, Insolvency within Multinational Enterprise Groups (Oxford University Press 2009) 12-13.

4Brenda Hannigan, Company Law (4th edn, Oxford University Press 2016) 18.

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