The JudgeCo Principles and Guidelines 2014

Disclaimer This publication has been produced with the financial support of the Civil Justice Programme of the European Union. The contents of this publication are the sole responsibility of Leiden University and/or Nottingham Trent University and can in no way be taken to reflect the views of the European Commission. Co-funded by the Civil Justice Programme of the European Union Co-funded by the International Insolvency Institute

11 October The JudgeCo Project Rationale: Renewed recital 20 Two new recitals (20a & 20b) Renewed Art. 31 CoCo between liquidators New Art. 31a CoCo between courts New Art. 31b CoCo between liqs/courts

11 October The JudgeCo Project Recital 20 Changes: The main condition here is that the various liquidators and the courts involved must cooperate closely, in particular by exchanging a sufficient amount of information… In their cooperation, liquidators and courts should take into account best practices for cooperation in cross-border insolvency cases as set out in principles and guidelines on communication and cooperation adopted by European and international associations active in the area of insolvency law. Recitals 20a and 20b refer to cooordination between groups and the possibility of “procedural consolidation”.

11 October The JudgeCo Project Article 31 Changes: Cooperation and communication between liquidators 1. The liquidator in the main proceedings and the liquidators in the secondary proceedings shall cooperate with each other to the extent such cooperation is not incompatible with the rules applicable to each of the proceedings. Such cooperation may take the form of agreements or protocols…

11 October The JudgeCo Project Article 31a: Cooperation and communication between courts 1. In order to facilitate… coordination… a court… shall cooperate with any other court … to the extent such cooperation is not incompatible with the rules applicable to each of the proceedings. For this purpose, the courts may, where appropriate, appoint a person or body acting on its instructions. 2. The courts… may communicate directly with, or to request information or assistance directly from each other provided that such communication is free of charge and respects the procedural rights of the parties to the proceedings and the confidentiality of information.

11 October The JudgeCo Project Article 31a (cont.): 3. Cooperation may be implemented by any appropriate means, including (a) communication of information by any means considered appropriate by the court; (b) coordination of the administration and supervision of the debtor’s assets and affairs; (c) coordination of the conduct of hearings, (d) coordination in the approval of protocols.

11 October The JudgeCo Project Article 31b: Cooperation and communication between liquidators and courts 1. In order to facilitate … coordination…, (a) a liquidator in main proceedings shall cooperate and communicate with any court… and (b) a liquidator in secondary or territorial insolvency proceedings shall cooperate and communicate with the court [in]… main proceedings, 2. The cooperation… shall be implemented by any appropriate means including the means set out in Article 31a(3) to the extent these are not incompatible with the rules applicable to each of the proceedings.

11 October The JudgeCo Project Cooperation Templates: European Communication and Cooperation Guidelines For Cross-border Insolvency (2007) (“CoCo Guidelines”) 18 in number endorsed by INSOL Europe, inspired by “Soft law” / best practices Promotes coordination, using ‘Protocols’ (includes “Checklist Protocol”) Referred to in BenQ Holding (NL–DE), Automold (DE-UK), Landsbanki-Icesave, Kaupthing, Lehman Brothers Holdings Inc. (LBHI) (in draft-global protocol), PIN AG. ALI-III project “Global Principles for Cooperation in International Insolvency Cases” (2012)

11 October The JudgeCo Project Project Members: Professor Bob WesselsDr Paul Omar Professor Jan Adriaanse Dr Bernard Santen

11 October The JudgeCo Project Objective: to develop ‘guidelines’, ‘best practices’ and ‘standards’ for communication and cooperation in insolvency cases between courts in the European Union. The result should lead to a set of “EU Cross-Border Insolvency Court-to-Court Cooperation Guidelines”: (i) ensuring as far as possible that the EU Insolvency Regulation works in practice, to efficiently and effectively deal with a debtor’s estate; (ii) fitting the current environment where solutions have been developed based on models reflecting cooperation and communication; (iii) guaranteeing the organisation and conduct of a fair legal process and ensuring the fair representation of stakeholders concerned in insolvency processes.

11 October The JudgeCo Project Project Workstreams: Workstream 1 (January 2013-September 2013) –Developing surveys with help of a representative group of around 40 experts (Chair, Professor Ian Fletcher, UCL) –Study of 5 Codes on Independence/Integrity of Judges –Redrafting Global Principles and CoCo Guidelines Workstream 2 (September 2013-July 2014) –Capacity building by individual invitations to judges at international conferences Workstream 3 (July 2014-December 2014) –Training phase at various locations

11 October The JudgeCo Project Principles (26 in toto): 1 International Status: non-interference with court independence, IP supervision role, IP ethics, duties; no substantive rights created. 2 Public Policy: non-interference with public policy exception. 3 Overriding Objective: (i) enabling cooperation; (ii) due regard to interests; fair and proportionate action; (iii)-(iv) good faith and cooperation duties; (v) regard to international origin and uniformity.

11 October The JudgeCo Project Principles: 26 “Application by Analogy”: Principles to apply by analogy to international cases not under EIR. 4 Aim: (i) facilitating coordination (incl. protocols); (ii) promoting efficient and timely coordination, preservation of global value, information sharing and cost reduction; (iii) (within case administration) respecting creditors’ interests, cost reduction, proportionate management and efficient and timely action.

11 October The JudgeCo Project Principles: 5 Case Management: (i) coordination and harmonisation imperatives; (ii) (court role) efficient and timely disposition, case management through consultation, determination and sequence of stages, organising status conferences, proper information for IPs and creditors; (iii) (IP role) the same (direction of information to the court). 6 Equality of Arms: full and fair opportunity to present and challenge evidence, to be notified of legal requirements, urgent actions temporary in nature and subject to notice and appeals.

11 October The JudgeCo Project Principles: 7 Decision and Reasoned Explanation: orders promptly made, schedules through consultation, oral orders written down forthwith, identification of material details in orders, legal and evidentiary grounds in support, prompt publication. 8 Stay or Moratorium: possibility of moratorium, reasonable restraints on parties, relevant relief and clear exceptions, publication and appeal rights. 9 Non-Discriminatory Treatment: no discrimination on grounds of personality, domicile, nationality, registered seat/residence or in respect of the nature of the claim.

11 October The JudgeCo Project Principles: 10 Modification of Recognition: opening of secondaries can be postponed if fraud or lacak of jurisdiction in main cases; such decisions can also be revoked. 11 Reconciliation of Stays or Moratoriums in Parallel Proceedings: courts to minimise conflict between multiple stays/moratoriums. 12 Abusive or Superfluous Filings: dismissal of secondary cases if no forum interest, rules permit and creditors not unduly prejudiced. 13 Direct Access: main liquidator to enjoy direct and necessary access to other courts as any domestic IP.

11 October The JudgeCo Project Principles: 14 Language: language determination by reference to convenience and cost reduction, use of and documents in other languages if no undue prejudice, ditto for production of orders. 15 Authentication: authentication (where necessary) by secure and rapid means, save for good cause. 16 Communications between Courts: (i) communication directly or via IPs: efficient and timely; (ii) modern methods of communications, secure technology; (iii) use of Guidelines and/or Protocols.

11 October The JudgeCo Project Principles: 17 Independent Intermediary: courts to explore use of independent intermediary to advance cooperation, if intermediary skilled, fir and proper, impartial and accountable. Costs from estate. 18 Notice: notice (incl. in public registers) to known foreign creditors to permit proofs and participation. 19 Coordination: court approval for asset transactions (unless protocol), prior approval of other IPs, multiple appointments and periodic reporting encouraged. 20 Notice to Administrators: prompt notice to IPs.

11 October The JudgeCo Project Principles: 21 Cross-Border Sales: maximum aggregate asset value/highest overall value for creditors through cooperation. 22 Assistance to Reorganisation: secondaries run consistently with any reorganisation objective in mains. 23 Post-Insolvency Financing: cooperation to obtain any necessary financing. 24 Plan Binding on Participant: reorganisation plans in mains if no secondaries) binding on all participants. 25 Plan Binding Personal Jurisdiction: ditto binding on creditor with notice.