Emeric Domokos (Managing Partner), was speaker at ”Trends in insolvency” conference, organised by JURIDICE.ro.
Emeric talked about the concept of COMI in insolvency.
COMI, short for “Center of Main Interests,” is a crucial concept in international insolvency law. It determines the jurisdiction in which the main insolvency proceedings should take place for a company or an individual with assets and debts in multiple countries. The COMI concept is vital in determining which country’s laws and courts should handle the insolvency proceedings.
Some key points related to COMI:
- Definition: The COMI is the place where a debtor conducts the administration of its interests on a regular basis, reflecting its economic activities and decisions. It is essentially the main hub of a debtor’s business operations.
- Determining the COMI: The determination of a debtor’s COMI is a factual assessment and varies from case to case. Factors considered in determining the COMI may include the location of the company’s headquarters, the place where management decisions are made, the place of its main assets or trading activities, and the place where it is registered.
- Rebuttable presumption: The European Union’s Regulation on Insolvency Proceedings (Recast) provides a rebuttable presumption for corporate debtors that their COMI is the place of their registered office, in the absence of proof to the contrary.
- Importance of COMI: The COMI concept is important because it helps establish a single, main jurisdiction for insolvency proceedings. This avoids fragmentation and conflicting decisions in multiple jurisdictions, provides legal certainty, and facilitates coordination and cooperation between courts and stakeholders.
- Jurisdiction for insolvency proceedings: Once the COMI is determined, the country where the COMI is located generally has jurisdiction to open main insolvency proceedings. This means that the main proceedings, such as liquidation or reorganization, will be conducted in that jurisdiction, and the laws of that country will govern the process.
- Secondary proceedings: In situations where a debtor has assets or operations in other countries, secondary insolvency proceedings may be opened in those jurisdictions. The purpose of secondary proceedings is to protect and administer the debtor’s assets located in those countries.
- Cross-border cooperation: International insolvency laws, such as the UNCITRAL Model Law on Cross-Border Insolvency and the EU Regulation on Insolvency Proceedings, aim to facilitate cooperation and coordination between courts in different jurisdictions. They provide mechanisms for recognizing and enforcing foreign insolvency proceedings and ensuring communication and coordination between the main and secondary proceedings.
It’s important to note that the application and interpretation of COMI may vary depending on the legal framework of different jurisdictions, and there may be specific rules or case law that further shape its implementation.