The Insolvency (Amendment) (EU Exit) Regulations 2019

Publication Date:January 01, 2019

2019No. 146

EXITING THE EUROPEAN UNION

INSOLVENCY

The Insolvency (Amendment) (EU Exit) Regulations 2019

Made30thJanuary2019

Coming into force in accordance with regulation 1(2) and (3)

The Secretary of State makes these Regulations in exercise of the powers conferred by section 8(1) of the European Union (Withdrawal) Act 2018( 1) and section 2(2) of the European Communities Act 1972( 2).

The Secretary of State is designated for the purposes of section 2(2) of the European Communities Act 1972 in relation to insolvency( 3) and the protection of employees in the event of the insolvency of their employers( 4).

In accordance with paragraph 1(1) of Schedule 7 to the European Union (Withdrawal) Act 2018 and paragraph 2(2) of Schedule 2 to the European Communities Act 1972 a draft of this instrument has been laid before, and approved by a resolution of, each House of Parliament.

Citation and commencement

1.—(1) These Regulations may be cited as the Insolvency (Amendment) (EU Exit) Regulations 2019.

(2) The following provisions of these Regulations come into force on the day after these Regulations are made—

(a) regulation 2 as it relates—

(i) to paragraph 177 of the Schedule, and

(ii) Part 12 of the Schedule,

(b) paragraph 177 of the Schedule, and

(c) Part 12 of the Schedule.

(3) The remainder of these Regulations come into force on exit day.

Amendments

2. The Schedule has effect.

Extent and application

3. Any provision of these Regulations amending or applying an enactment has the same extent as the enactment amended or applied, except that—

(a) the amendments made to the Insolvency Act 1986 by paragraphs 18, 22, 24 and 26 of the Schedule extend to England and Wales only; and

(b) the amendments made to that Act by Part 7 of the Schedule apply to Scotland only.

Temporal application and savings

4.—(1) Subject to regulation 5 nothing in these Regulations affects—

(a) the application of Council Regulation (EC) 1346/2000( 5) to insolvency proceedings which fall within the scope of that Regulation and were opened before 26 June 2017; and

(b) the saving for the existing law in article 3 of the Insolvency Amendment (EU 2015/848) Regulations 2017( 6).

(2) Where main proceedings under the EU Insolvency Regulation were opened before exit day the amendments made by these Regulations do not apply in respect of—

(a) those proceedings;

(b) secondary proceedings in respect of the same debtor;

(c) any proceedings falling within Article 6 of the EU Insolvency Regulation.

(3) In applying paragraphs (1) and (2) references to the EU and to its members are to be read as if the United Kingdom were a member.

(4) The time at which proceedings are opened is to be determined in accordance with Article 2(8) of the EU Insolvency Regulation.

(5) In this regulation and regulation 5 the EU Insolvency Regulation means Regulation (EU) 2015/848 of the European Parliament and of the Council on insolvency proceedings( 7).

5.—(1) Paragraph (2) applies where in any particular case Council Regulation (EC) 1346/2000 or the EU Insolvency Regulation applies in the United Kingdom by virtue of regulation 4 and the court considers that the effect is or would be different to what would be the effect had a member State treated the United Kingdom as a member State under the relevant Regulation, and either—

(a) the court considers that one or more of the following would be materially prejudiced—

(i) the interests of a creditor (whether alone or in common with some or all other creditors),

(ii) the interests of the debtor,

(iii) where the debtor is a body corporate, the interests of a member (whether alone or in common with some or all other members) of the debtor; or

(b) the court considers it would be manifestly contrary to public policy to apply the relevant Regulation.

(2) The Court may—

(a) apply any other relevant law of the part of the United Kingdom in which the matter is being determined (including the Cross-Border Insolvency Regulations 2006( 8) or the Cross-Border Insolvency Regulations (Northern Ireland) 2007( 9));

(b) make any other order that it thinks fit.

30th January 2019

Kelly Tolhurst

Minister for Small Business, Consumer and Corporate Responsibility

Department for Business, Energy & Industrial Strategy

SCHEDULE

Regulation 2

PART 1

Amendment of retained direct EU legislation

Amendments to the EU Insolvency Regulation

1. Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings is amended as follows.

2.—(1) Article 1 is amended as follows.

(2) For the heading substitute “Application and jurisdiction”.

(3) For paragraph 1 substitute—

1. The grounds for jurisdiction to open insolvency proceedings set out in paragraph 1B are in addition to any grounds for jurisdiction to open such proceedings which apply in the laws of any part of the United Kingdom.

1A. There is jurisdiction to open insolvency proceedings listed in paragraph 1B where the proceedings are opened for the purposes of rescue, adjustment of debt, reorganisation or liquidation and—

(a) the centre of the debtor's main interests is in the United Kingdom; or

(b) the centre of the debtor's main interests is in a Member State and there is an establishment in the United Kingdom.

1B. The proceedings referred to in paragraph 1 are—

(a) winding up by or subject to the supervision of the court;

(b) creditors' voluntary winding up with confirmation by the court;

(c) administration, including appointments made by filing prescribed documents with the court;

(d) voluntary arrangements under insolvency legislation; and

(e) bankruptcy or sequestration.”.

(4) In paragraph 2 for “Directive 2001/24/EC” substitute “the Credit Institutions (Reorganisation and Winding up) Regulations 2004”.( 10)

3. In Article 2—

3

(a) insert the following paragraph—

(1A) “Member State” means a state which is a member of the EU other than Denmark;”;

(b) omit paragraphs (1) and (3);

(c) in paragraph (4) for “listed in Annex A” substitute “listed in Article 1(1B) which there is jurisdiction to open under Article 1(1A) and includes interim proceedings”;

(d) in paragraph (6)—

(i) omit point (i); and

(ii) in point (ii) omit “in all other articles,” and “of a Member State”;

(e) omit paragraph (9);

(f) in paragraph (10) omit “main”;

(g) omit paragraphs (11) to (14).

4.—(1) Article 3 is amended as follows.

(2) For the heading “International jurisdiction” substitute “Centre of main interests”.

(3) In paragraph 1—

(a) in the first sub-paragraph omit the first sentence;

(b) in the second sub-paragraph for “to another Member State” substitute “from the United Kingdom to a Member State or to the United Kingdom from a Member State”;

(c) in the third sub-paragraph for “to another Member State” substitute “from the United Kingdom to a Member State or to the United Kingdom from a Member State”;

(d) in the fourth sub-paragraph for “to another Member State” substitute “from the United Kingdom to a Member State or to the United Kingdom from a Member State”;

(4) Omit paragraphs 2 to 4.

5.—(1) Article 4 is amended as follows.

(2) In paragraph 1—

(a) in the first sentence for “Article 3” substitute “Article 1(1A) (a) or (b)”; and

(b) for the second sentence substitute “Where there is jurisdiction to open insolvency proceedings on either of the grounds specified in Article 1(1A)(a) or (b), the judgment opening such proceedings must state which of those grounds is applicable.”.

(3) In paragraph 2—

(a) in the first sentence—

(i) omit “in accordance with national law” and “Member States may entrust”;

(ii) for the words from “to examine” to the end of the sentence substitute “must examine the grounds on which there is jurisdiction to open the proceedings under Article 1(1A).”; and

(b) for the second sentence substitute “Where this is the case and there is jurisdiction to open insolvency proceedings on either of the grounds specified in Article 1(1A)(a) or (b), the insolvency practitioner must specify in the decision opening the proceedings which of those grounds is applicable.”.

6.—(1) Article 5 is amended as follows.

(2) In the heading omit “main”.

(3) In paragraph 1—

(a) omit “main” after “the decision opening”; and

(b) for “grounds of international jurisdiction” substitute “the grounds of jurisdiction under Article 1(1A)(a)”.

(4) In paragraph 2—

(a) omit “main” after “the decision opening”;

(b) omit “international”;

(c) after “jurisdiction” insert “under Article 1(1A)(a)”; and

(d) for “national law so provides” substitute “the relevant law (other than this Regulation) of the part of the United Kingdom in which the matter is being determined so provides”.

7. Omit Articles 6 to 24 and 26 to 83( 11).

8. In Article 84 omit—

(a) the second sentence of paragraph 1, and

(b) paragraph 2.

9. In Article 85—

(a) omit paragraphs 1 and 2;

(b) in paragraph 3—

(i) in point (a) omit “in any Member State”; and

(ii) for “that Member State” substitute “the United Kingdom”.

10. Omit Articles 86 to 90.

11. In Article 91 omit the second sentence.

12. In Article 92 omit point (c).

13. Omit the sentence immediately following Article 92 which begins “This Regulation shall be binding”.

14. Omit Annex A.

15. In Annex B omit all the entries other than those for the United Kingdom.

PART 2

Amendments to the Insolvency Act 1986

16. The Insolvency Act 1986( 12) is amended as follows.

17. In section 1 in subsection (4)( 13)

(a) in paragraph (b) omit “other than the United Kingdom”; and

(b) in paragraph (c) for “other than Denmark” substitute “(other than Denmark) or in the United Kingdom”.

18. In section 106 omit subsections (4A) and (4B)( 14).

19. In section 117 omit subsection (7)( 15).

20. In section 120 omit subsection (6).

21. In section 124 in subsection (1) omit the words from “or by a member State liquidator” to “Article 52 of the EU Regulation)”( 16).

22. In section 146 omit subsections (6) and (7)( 17).

23. Omit section 146A( 18).

24.—(1) Section 201 is amended as follows( 19).

(2) In...

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