Evaluating Legal Certainty under Insolvency Regulations of the European Union

AbstractThis article examines the insolvency rules of the European Union, specifically, the Recast EuropeanInsolvency Regulation (EIR Recast 2015), in order to determine whether such rules help enhance legalcertainty in cross-border insolvency cases involving corporate groups with the objective of reducingabusive forum shopping. The problem of cross-border insolvency with corporate groups is a very timely one, especially in light of the global growth of international trade, the movement towards theeconomic integration of various regions around the world, such as the European Union, the greaterflow of capital, and the ease of global communications. Forum shopping refers to the practice of such a company seeking the most favourable jurisdiction for its insolvency proceedings. This practiceis known as ‘abusive’ when it reaches the point when a particular interest group, in so doing, seeksto appropriate wealth that belongs to others. The outline of this article is as follows: Section 1 of this article starts by providing an overview of cross-border insolvency of corporate groups. ThenSection 2 explores in depth the main provisions of the EIR Recast 2015 that are relevant to enhancinglegal certainty in a waybeneficialto reducing abusive forum shopping, Section 3 proposes some recommendations to improve the EIR Recast 2015 in regard to enhancing legal certainty with theobjective of reducing abusive forum shopping, and Section 4 concludes.