2.2.2. Territorial Scope of Regulation

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The territorial scope of Regulation 1346/2000 is limited in two respects: it provides

for an intra-Community cross-border insolvency regime only and it does not include

all Member States.

The Regulation only applies to proceedings where the debtor's centre of main interests

is located in the Community. Outside the Regulation's scope are therefore inter alia

proceedings opened in Member States in respect of debtors with a centre of main

interests located outside the Community. Thus in the case of a United States debtor,

who has establishments in several Member States, not only the relationship of the

United States vis-a-vis the (various) Member State proceedings but also the interaction

between the different Member State proceedings inter se remain subject to national

rules on cross-border insolvency regulation.' In particular, the Regulation's duty of

co-operation does not apply. The comitas Etiropaea is not so limited. It applies even

i f the centre of debtor's main interests is located outside the Community but a Member

State opens proceedings for the full effect of which the assistance of other Member

States is required.

As to the exclusion of Denmark from the Regulation's scope, it is submitted that the

comitas governs co-operation in matters of insolvency between it and the other

Member States. This does not of course mean that Denmark would be bound by the

Regulation's provisions notwithstanding its opt-out from Title IV of the HC Treaty.

It does mean, however, that Denmark cannot refuse to accord effect to proceedings

opened in other Member States and vice versa without sufficient reason. In the relationship

of Denmark with the other Member States the comitas liuropaea comes to its full

potential and instructs all the Member States to formulate their national cross-border

insolvency laws so as to allow tor co-operation to commence and take shape.

 the (cross-border) proceedings. Moreover, even if the debtor has an establishment,

the costs of secondary proceedings may outweigh the possible benefits so that these

rights may de facto be placed outside the proceedings.

Aside from the question of fairness - the windfall tor immune secured creditors can

only come at the expense of the other (unsecured) c r e d i t o r s - t h i s certainly would not

be the solution suggested under the coiuitas F.uropaea. Assistance should be forthcoming,

unless a Member State can show sufficient reason for not doing so. The Regulation

makes the assistance (the application of the lex fori coiicursus secundi) subject to the

opening of secondary proceedings. The reasons given in the Report lor linking this

choice o f l aw with a parallel choice of forum are however unconvincing and do not

justify a refusal to provide assistance.'' The complexity of combining two insolvency

laws is not convincing, as in various other instances the Regulation envisages the

integration of foreign insolvency law with the law of the forum which is no less complex.

'" furthermore, that liquidators 'might be at a loss when asked to apply foreign

insolvency law' is no convincing argument either, as they are asked to apply foreign

insolvency law on other issues. Moreover, even if occasionally they might be at a loss

this hardly seems a reason to avoid foreign insolvency law at all times. In any event,

a liquidator could simply employ the expertise of a local practitioner or even ask the

assistance of the local courts. Either would be considerably less burdensome to the

estate than the opening of full blown secondary proceedings. In other words, the

opening of secondary proceedings for the inclusion of security rights is unnecessary

and disproportionate.

The rule under the coinitas that assistance should be forthcoming unless there are good

reasons to the contrary would suggest a choice of law lor the law of the Member State

of the situs (whether or not combined with the lex fori coiicursus principalis) irrespective

of t he opening of secondary proceedings. The text of the Regulation does leave some

room for a reading which would allow for (some) extraterritorial effect in respect of

security rights in foreign collateral.1 Viewing the Regulation from the perspective of

the coiuitas would suggest that the Court interprets the Regulation accordingly.