CJEU opine on COMI yet again

Under the Recast Insolvency Regulation ((EU) 2015/848), “main” insolvency proceedings can only be opened in the Member State in which the debtor has their centre of main interests (“comicile”). For individuals not exercising an independent business or economic activity, there is a presumption, in the absence of proof to the contrary, that the individual's habitual residence is their comicile. (Albeit that presumption only applies if the habitual residence has not been moved to another Member State within the 6-month period prior to the bankruptcy petition.)

A married couple resident and employed in Norfolk applied to the Portuguese court to open “main” bankruptcy proceedings in Portugal on the grounds that (i) their sole immovable asset was in Portugal; and (ii) Portugal was where all the transactions and all the contracts leading to their insolvency were conducted and concluded, and this was enough to rebut the presumption that their habitual residence was their comicile.

The Portuguese court referred ground (i) above to the Court of Justice of the European Union (“CJEU”). 

The CJEU held that the presumption may be reversed only following an overall assessment of all the objective criteria and that the fact that the only immovable property of an individual not exercising an independent business or economic activity was located outside the Member State of their habitual residence was not sufficient to rebut that presumption. 

While not raised by the referring court, the CJEU also commented that the cause of the insolvency is not, as such, a relevant factor in determining comicile of an individual not exercising an independent business or economic activity.


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