Regulation (EU) 2015/848 of May 20, 2015 on insolvency proceedings aims at harmonizing the rules applicable to cross-border insolvency proceedings within the European Union. Its aim at facilitating coordination between the courts of the Member States, protect creditors’ rights and avoid conflicts of laws or jurisdiction in insolvency procedures involving companies operating in several EU countries.
Article 3 of the Regulation determines which court has jurisdiction to open the main insolvency proceedings. According to this article, the courts of the Member State within the territory of which the centre of the debtor’s main interests (COMI) is situated shall have jurisdiction to open insolvency proceedings. The same article further provides that, in the case of a company or legal person, the place of the registered office shall be presumed to be the COMI. However, this is a rebuttable presumption, providing sufficient evidence.
In a recent case dealt with by our firm, an Estonian company was sued for bankruptcy before the District Court of Luxembourg, by a Luxembourg creditor claiming unpaid debts. The claimant argued that the company’s COMI was located in Luxembourg, more precisely because the managing director’s habitual residence was in Luxembourg, which, in his view, was sufficient to assert the Luxembourg court’s jurisdiction.
In a judgment rendered on March 14, 2025, the Luxembourg court found that it did not have jurisdiction to hear the matter, on the grounds that the plaintiff had not provided proof that the company’s COMI was actually located in Luxembourg. The court found that there was a lack of evidence that the COMI was based in Luxembourg, and, as a result, found that the regulation presumption according to which the COMI matches with the registered office of the company was not rebutted. Since the registered office of the defendant company was in Estonia, the Luxembourg court held that Estonian courts should have jurisdiction to rule on a bankruptcy claim against that company.
This decision illustrates a strict application of Article 3 of Regulation (EU) 2015/848: in the event of a dispute, the burden of proof lies with the claimant, who must demonstrate, with strong evidence, that the debtor’s principal activity is indeed located in a Member State other than the State of the registered office.
Regulation (EU) 2015/848 does allow a creditor to sue a company before courts different from the courts of the State of incorporation, but only if the COMI is effectively established in such foreign State. Consequently, it is paramount for the claimant to gather solid and precise evidence (effective economic activity, centralized management, presence of premises or employees, etc.) to evidence that the effective center of the COMI is located in the Member State of the court seized. If this is not the case the bankruptcy application will be rejected by the court.
This judgment is still subject to appeal and is therefore not yet final.
