Use the Lexology Navigator tool to compare the answers in this article with those from other jurisdictions.
Recognition of foreign proceedings
Under what circumstances will the courts in your jurisdiction recognise the validity of foreign insolvency proceedings?
The EU Insolvency Regulation (2015/848) also applies in Austria; therefore, foreign insolvency proceedings are automatically recognised in Austria if they are mentioned in Annex A of the regulation. Outside the scope of the regulation, foreign insolvency proceedings are generally recognised if:
- the centre of main interests is in the country where the proceedings have been commenced; and
- the basic elements of the foreign proceedings are comparable to Austrian insolvency law.
Winding up foreign companies
What is the extent of the courts’ powers to order the winding up of foreign companies doing business in your jurisdiction?
Austrian courts can potentially wind up companies irrespective of the country where they were originally established.
The relevant question is whether Austrian courts have international jurisdiction.
Within the scope of the EU Insolvency Regulation, Austrian courts are competent if the company’s centre of main interests is in Austria. If this is not the case but a branch or establishment (as defined by the regulation) is in Austria, Austrian courts are competent to open secondary or territorial proceedings which are limited to assets located in Austria.
Outside the scope of the EU Insolvency Regulation, international jurisdiction is not harmonised and depends on the existence of bilateral treaties. Generally, Austrian courts are deemed internationally competent if the debtor carries on its business in Austria.
Centre of main interests
How is the centre of main interests determined in your jurisdiction?
Austrian courts usually follow the principles set out in the EU Insolvency Regulation and by the European Court of Justice (ECJ). Within the scope of the EU Insolvency Regulation, there is a statutory presumption for the centre of main interests lying in the state where the registered office of a company is located. The thresholds for the proof to the contrary are rather high, as there must be objective elements which are determinable for a third party and indicate that the centre of main interests is in fact in another state. Despite existing ECJ jurisprudence, member states still often have different views on the determination of the centre of main interests (as recently shown in NIKI Luftfahrt GmbH, where Austrian and German courts both considered themselves competent for main insolvency proceedings).
What is the general approach of the courts in your jurisdiction to cooperating with foreign courts in managing cross-border insolvencies?
Within the scope of the EU Insolvency Regulation, insolvency courts of different member states must collaborate and communicate as set out in the regulation. These rules also apply for the collaboration and communication between administrators appointed in different member states and between courts and administrators. Such rules are especially relevant in the context of group insolvencies.
Outside the scope of the EU Insolvency Regulation, there are no detailed formal rules regarding international cooperation. Austrian courts and administrators must provide foreign administrators with the information necessary for the performance of a foreign insolvency proceeding.
Click here to view the full article.