Case no. 8767/3/2019 (36638/3/2018), Bucharest Tribunal Civil Section VII, Romania

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(Romanian publication)

ROMANIA

BUCURESTI TRIBUNAL - VII CIVIL SECTION

CIVIL JUDGMENT NO. 3516

PUBLIC SESSION OF 06.06.2019

Court constituted by:

PRESIDENT - SYNDIC JUDGE - ***

COURT OFFICER - ***

The civil case concerning the insolvency proceedings regarding the debtor ** is pending.

The hearing of the case was held in public session on 23.05.2019 and is recorded in the minutes of the hearing of this date, which forms an integral part of this document, when the Tribunal, needing time to deliberate and to give the parties the opportunity to submit written submissions, adjourned the hearing to 06.06.2019.

THE COURT

By the application registered on 26.10.2018 under no. ** on the role of Bucharest Tribunal, Civil Section VII, the creditor ** requested the opening of insolvency proceedings against debtor **, which is in a state of insolvency and against which it holds a certain, liquid, and due claim in the amount of 146,135.22 lei.

By the application registered on 30.10.2018 under no. ** on the role of the Bucharest Tribunal, Civil Section VII, creditor ** requested the opening of insolvency proceedings against debtor **, which is in a state of insolvency and against which it has a certain, liquid, and enforceable claim in the amount of RON 1,424,670.96 lei.

By the application registered on 31.10.2018 under no. ** on the role of the Bucharest Tribunal, Civil Section VII, creditor ** requested the opening of insolvency proceedings of the debtor **, which is in a state of insolvency and against which it has a claim of RON 584,141.76 lei.

By the application registered on 20.11.2018 under no. ** on the role of the Bucharest Tribunal, Civil Section VII, creditor ** requested the opening of insolvency proceedings of the debtor **. which is in a state of insolvency and against which it has a claim of RON 1,213,654.35 lei.

By application registered on 14.12.2018 under no. ** with the Bucharest Tribunal, Civil Section VII, creditor ** requested the opening of the insolvency proceedings of the debtor ** which is in a state of insolvency and against which it has a certain, liquid, and due claim in the amount of 1,042,50.26 lei.

By application registered on 16.01.2019 under no. ** on the role of the Bucharest Court, Civil Section VII, creditor ** requested the opening of insolvency proceedings of the debtor ** which is in a state of insolvency and against which it has a certain, liquid, and enforceable claim in the amount of 317,410.45 lei.

By the application registered on 18.03.2019 under no. ** with the Bucharest Court, Civil Section VII, creditor ** requested the opening of insolvency proceedings of the debtor **, which is in a state of insolvency and against which it has a claim of 53,664.05 lei.

By application registered on 20.03.2019 under no. ** with the Bucharest Court, Civil Section VII, creditor ** requested the opening of insolvency proceedings against debtor **, which is in a state of insolvency and against which it has a claim of 82,220.76 lei.

At the court hearing of 17.01.2019 (vol.8, tab 143) the court found that the provisions of Regulation (EU) no. 2015/848 are applicable to the case. At the same time, it noted from the content of the applications for the opening of insolvency proceeding filed by the creditor ** the request of opening of a main proceeding directed against the company with its main registered office in Italy or a territorial proceeding based on the provisions of Article 3(4) of European Regulation no. 2015/848.

The court found that the applications for the opening of insolvency proceedings made by the creditors ****** did not indicate a legal basis in relation to Regulation (EU)  No 2015/848, and ordered the creditors ** to be summoned to submit their clarifications in order to indicate the subject matter and legal basis of the applications for the opening of insolvency proceedings against the debtor in relation to Regulation No 2015/848, to indicate, according to the provisions of Article 3 of Regulation (EU) No 2015/848, whether they intend to make applications for the opening of a main insolvency proceeding, secondary insolvency proceeding or territorial insolvency proceeding, as governed by the provisions of Article 3(1)(3) and (4).  The court asked the creditors ** to state their opinion as to the jurisdiction in which the debtor has the centre of main interests and what criteria they refer to in this respect.

In view of the clarifications and objections raised in the case, at the trial date in the court, the court raised the objection of general lack of jurisdiction of the Romanian courts, regarding the application based on the provisions of Article 3(1) of Regulation No 2015/848 opening the main proceeding against the debtor having its registered office in Italy and a place of business in Romania.

 By interim civil judgment no. 1666/27.03.2018 pronounced in the case no. ** Bucharest Tribunal, VII Civil Division, ordered the following: "In the case no. ** “Admit the exception of the general lack of jurisdiction of the Romanian court, regarding the request based on the provisions of Article 3 paragraph 1 of Regulation No 848/2015 for the opening of the main insolvency proceedings of the debtor ** with registered office in **, and the form of organization “branch”  in **. Dismiss the application as inadmissible. Disjoins the applications based on the provisions of Article 3(3) and Article 3(4) of Regulation No 2015/848, filed by the creditor ** against the debtor ** with registered office in ** and the form of organisation ** branch in **, forming a new file with the same parties”.

The court held the following:

1.The factual situation:

1.1. Proceedings in **

The debtor ** is a joint-stock company, with registered office in **, in the Register of Companies of ** under number 00398970582.

The Tribunal of **, Bankruptcy Division, has registered concordato preventivo no. ** at the request of ** (vol.8, files 80-90).

From the decision rendered on 17.10.2018 by the Tribunal of ** it appears that the debtor has filed a petition pursuant to art. 161 paragraph 6 of the Italian Bankruptcy Law, to file a final proposal for a concordato preventivo with creditors, with the plan and documentation provided for in paragraphs 2 and 3 of this law.

The Italian court, considering that the company had submitted the balance sheets for the last three years, the list of creditors indicating the claims, the administrator's decisions, retained the jurisdiction of the Tribunal ** in relation to the locality where the company's registered office is located.

The court also noted that there was a bankruptcy petition pending before the same court and granted a 60-day deadline to complete the proposed settlement. It was ordered under Article 161(6) to appoint three judicial commissioners in the person of the following persons **.

The factual elements considered by the Italian court in determining jurisdiction by reference to the provisions of European Regulation No 2015/848 were not mentioned in the judgment.

By the decision of 18.12.2018 the Tribunal of ** granted, pursuant to Article 161(6) of the Italian Bankruptcy Law, a postponement of the deadline for submitting the proposal for concordato of 60 days (vol. 8, files 94-98). The Italian court held that the company is the leader of a group with over 11,000 employees, operating in a complex sector such as the construction industry, and holds orders managed either directly or in partnership with other companies worldwide. There were, also, noted the complexity of the liability valuation, the need to complete the certification work, and the fact that the plan is at an advanced stage of preparation.

1.2. Procedure in Romania

According to ONRC records, vol. 2, files 66-91, the debtor registered on the 28.07.1998 in Romania a place of business in the form of a branch, having as its main field of activity the execution of construction works of residential and non-residential buildings. The debtor declared 588 employees in 2015, a number of 487 employees in 2016 and a number of 569 employees in 2017. It declared a net turnover of 441,336,000 lei in 2015, 337,909,305 lei in 2016, and 319,474,566 lei in 2017. The company's activity generated a declared profit of 7,924,061 lei on 30.06.2018.

1.3. Contracts and creditors

The Reverse Factoring contract on the 15.12.2016 the debtor signed with the creditor **.

According to the debtor's statements in the vol..2, files 100-113, ** is an international group of companies with activity in ** and worldwide, and through the branch in Romania important infrastructure works are carried out, namely the realization of **

Between the Association **, including **, a company registered in ** as leader **, companies registered in Romania - as contractor, and **, as final beneficiary, was concluded on 11.07.2012 contract no. 43 having as object the execution of “**, works of tunnel, gallery, stations, depot, multimodal terminal and related installations for commissioning”. (vol.6, files 147-151)

The debtor through the branch registered in Romania signed with the creditor ** the service contract no. 160/01.03.2016, being represented by its named **, for the execution of works at the station **, at the stations ** and interstation, **, tunnel works, dismantling and rebuilding of lighting surfaces.

As regards the settlement of disputes, by art. 19.2 of the contract the parties have agreed on the jurisdiction of the Romanian courts and have expressly stated that the contract will be interpreted in accordance with Romanian law.

Similar sub-contracts have been concluded with the other creditors registered in Romania, which have filed for insolvency proceedings against the debtor.

The address no. 184/28.07.2015 communicated to creditor ** was signed for the debtor **, by the named **. (vol.1, tab 198).

According to the clarifications formulated by creditor ** (vol. 9, files 7-11), the debtor is a "company involved in several projects in Europe, but many of them are executed in Romania. The works statements related to the sub-contract concluded were signed and accepted for payment by **, in its capacity as a general contractor". It is claimed by the creditor that the procedure opened in ** concerns only the creditors **, without any protection provided for Romanian creditors, with the argument that the procedure ** is accessible only to the creditors **, it is not based on the provisions of Regulation No 2015/848. The creditor invokes the fact that the debtor has its centre of main interests in Romania, Bucharest, where it "effectively carries out specific contract management activities with reference to the provisions of Article 2(10) of the Regulation". It invokes as an objective criterion "the perception of creditors regarding the place where the debtor manages its interests". It is also claimed that the Italian procedure is not accessible to it since the creditor was not informed of the opening of proceedings against the debtor.

The debtor, in defence, claims that the entity in Romania has no legal personality and no patrimony of its own, it is a dismemberment without legal personality, incapable of becoming a separate legal subject (vol. 9, tabs 30 - 41).

1.4 Summary of the parties' requests

In essence, Romanian creditors request the opening of a main insolvency proceeding of the debtor by the Bucharest Tribunal, arguing that the centre of main interests (COMI) is in Romania, regardless of the place of registration of the main office.

In the alternative, it is requested to open a secondary insolvency proceeding, given that the court has found that the Italian concordato preventivo is a main insolvency procedure within the meaning of the European Regulation or a territorial insolvency proceeding, because of the finding that no main insolvency proceeding has been opened in Italy.

The debtor invokes the plea of lack of general jurisdiction of the Romanian courts, regarding the opening of the main insolvency proceedings of the debtor, essentially on the grounds that the COMI is in **.

The debtor invokes the plea of inadmissibility of the requests for the opening of secondary and territorial insolvency proceedings.

Applicable legal framework:

2.1. Direct applicability of Regulation (EU) No 2015/848 on insolvency proceedings.

As it appears from the documents on file and the parties' clarifications, the debtor is a company registered under Italian law with the Italian Commercial Register and tax authorities, with its registered office in the city of **. The debtor has opened an office in Bucharest, which has the legal status of a branch of the company with registered office in **.

The creditors, who are Romanian legal entities, request the opening of insolvency proceedings, invoking claims arising from the performance in Romania of contracts concluded with the debtor.

The court, seized of a claim with a foreign element, resolves the conflict of jurisdictions and then the conflict of laws based on the rules of private international law of its State.

The private international law rules on insolvency in Romania are provided by Law no. 85/2014 and Regulation (EU) no. 2015/848 on insolvency proceedings, the former regulating relations with foreign states in general and the latter applying to legal relationships where the foreign element is in a Member State of the European Union. The Romanian judge hearing an application for the opening of insolvency proceeding with foreign elements will verify its jurisdiction according to the law, Regulation (EU) No 2015/848, if the point of connection is located in the territory of the European Union, or according to the Law No 85/2014, if it is located in a non-EU country, and, if it finds the jurisdiction of the Romanian courts, will apply Romanian law in the matter.

Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings amending Regulation EC No 1346/2000 on insolvency proceedings, entered into force on 25 June 2015 and applies to the relevant insolvency proceedings as from 26 June 2017, with some exceptions. It does not apply to insolvency proceedings concerning insurance companies, credit institutions, investment firms providing services involving the holding of funds or securities of third parties and collective investment undertakings.

In insolvency proceedings the parties cannot choose by their own will the jurisdiction and the applicable law. From the moment of Romania's accession to the European Union, the EU law is automatically integrated into the domestic legal order. Regulation (EU) No 2015/848 must be applied by the Romanian court in its capacity as Community law. The Regulation is by its nature directly applicable (Article 249 of the EC Treaty expressly states this) in all EU Member States. The EU rule has superior legal force to national rules regardless of the rank of the rule in question in the hierarchy of the national legal system or the time of adoption of the national rule before or after the adoption of the EU rule. National courts are obliged to apply EU law and to interpret national law in the light of EU rules.

The EU Regulation applies to collective insolvency proceedings where the centre of the debtor's main interests is situated in a Member State of the European Union.

The Law no. 85/2014 on pre-insolvency and insolvency proceedings in Romania also applies to the following categories of debtors in a state of insolvency or imminent insolvency: commercial companies; cooperative societies; cooperative organisations; agricultural companies; economic interest groups and any other private legal person also carrying out economic activities. This normative act is in line with the European Regulation, which is the common law on insolvency in our country and has been considered in the annexes to the Regulation.

The scope of Regulation (EU) No 2015/848 is marked by two requirements: there must be an insolvency case with at least an element of foreignness... The second criterion requires that this foreign element must be in the territory of a Member State of the European Union.

In the present case, the Romanian creditors request the opening of insolvency proceedings of a company with registered office in a Member State of the European Union, so that Regulation (EU) No 2015/848 is directly applicable.

2.2. Obligation of the Romanian judge to verify ex officio the general jurisdiction in the resolution of the claim

Cross-border litigation involves determining the competent court to settle the dispute (jurisdiction in private international law), identifying the applicable procedural law, and then resolving the conflict of laws (determining the law applicable to the legal relationship at issue). The elements subject to verification are applicability in time "ratione temporis"; applicability "ratione loci"; applicability "ratione materiae".

The Romanian judge verifies his jurisdiction under Regulation (EU) No 2015/848, if the connection is within the EU territory. He should analyse the type of proceedings, whether the insolvency proceedings are main or secondary. The judge should consider the type of action, whether the action falls within the scope of the concepts of bankruptcy, insolvency, or belongs to the category of civil or commercial legal actions. After establishing the jurisdiction of the Romanian court, the judge will apply Romanian law.

Article 4 of Regulation (EU) 2015/848 states that the court or the authority competent to open insolvency proceeding is obliged to verify ex officio whether it has jurisdiction in the case and whether the proceedings are main or secondary insolvency proceedings.

2.3. The concept of "centre of main interests" (COMI) in the European approach.

The person entitled to request the opening of such proceedings may be the insolvency practitioner in the main proceeding or any other person or authority empowered to request the opening of insolvency proceedings under the law of the Member State in whose territory the secondary proceeding is requested.

According to the European Regulation, the Member State where the debtor has its COMI is competent for the main insolvency proceeding and the opening of secondary proceedings is linked to the concept of "establishment".

Article 3 sets out the rules of international jurisdiction as follows: the jurisdiction to open insolvency proceedings (hereinafter "main insolvency proceedings") lies with the courts of the Member State in whose territory the debtor's centre of main interests is situated. The centre of main interests shall be the place where the debtor conducts the administration of its interests on a regular basis, and which is ascertainable by third parties. In the case of a company or legal person, the centre of main interests shall be presumed to be, in the absence of proof to the contrary, the place where the registered office is situated. This presumption applies only if the registered office has not moved to another Member State during the three months prior to the application for the opening of insolvency proceedings. (...) COMI, is seen as the central element of the Regulation.

In the case of a company or legal person, the registered office is presumed to be COMI, unless proven otherwise. The presumption applies only if the registered office has not been moved to another Member State within 3 months prior to the application for the opening of insolvency proceedings.

The Regulation establishes that the COMI shall correspond to the place where the debtor conducts the administration of its interests on a regular basis and which is ascertainable by third parties, and Article 2(10) defines the  “establishment” as „any place of operations where a debtor carries out or has carried out in the 3-month period prior to the request to open main insolvency proceedings a non-transitory economic activity with human means and assets”. The presumption is useful in view of the principle of legal certainty and the of fact that the registered office is known to all interested parties due to its publicity. It can only be overturned by invoking objective factors that can be verified by third parties.

Because of the significant differences between national laws, it has become necessary to lay down rules for determining the applicable law.

The Law no. 85/2014, in the provisions of Art. 5, para. 7 and Art. 5, para. 58 provides the following definitions:“debtor’s center of main interests means, in case of cross-border insolvency proceeding and until proven otherwise, as applicable: the main corporate seat of the legal entity”; ”main seat means, in terms of the cross-border insolvency proceeding, the place where the main center of governance, supervision and management of the statutory activity of the legal entity is located, in such manner so as to allow verification by third parties, even if the respective corporate bodies’ decision are adopted according to the instructions of members, shareholders or associates from other states”.

2.4. National regulation of the concept of "branch" and its relation to European legal provisions

The debtor has its branch registered at the Commercial Registry in Bucharest and, under the terms of Article 56 paragraph 2 of the New Civil Procedure Code, it has the capacity and use of its civil rights. The debtor has a registered branch in Romania, with a separate registered office, has authorized persons as director and administrator, with full powers, so that the debtor can be sued, under the conditions of Article 56 paragraph 2 of the New Code of Civil Procedure, according to which companies that do not have legal personality can be sued as defendants, if they are constituted according to law.

On the other hand, however, given the requirements of our special national law, the insolvency law, in the resolution of the application for the opening of insolvency proceeding against a debtor, a branch of the parent company with registered office in Italy, the question is whether insolvency proceeding can be opened against a branch, without legal personality, with reference to the provisions of Article 43 of Law no. 31/1990.

Article 3(1) of Law 85/2014 provides that the law applies to professionals as defined in Article 3(2) of the Civil Code. According to national law a branch is a dismemberment of a legal person, which has no legal personality and does not have its own patrimony. Having no legal personality of its own, no patrimony and being totally dependent economically on the parent company, the branch cannot be subject to national insolvency proceedings. The branch is part of the organic structure of the founding parent company, which is the only legal entity. In other words, the branch is analysed as a dismemberment, a way of decentralising the activity of the parent company that owns it.

However, in the present case, the application for the opening of insolvency proceeding with an element of foreignness is based on the provisions laid down in a European regulation, in which the definition of “establishment”, which appears in Article 2(10) of the Regulation, is clear and does not consider either the concept of “branch”, or the concept of “legal personality”. Specifically, no reference is made to the requirement of an independent legal personality of the entities referred to in Article 2(10) of the Regulation.

It follows from the definition in the EU Regulation that the conduct of an economic activity is closely linked to the existence of human resources, which shows that a minimum of organisation and a certain stability are required. The mere existence of isolated assets or bank accounts does not, in principle, meet the necessary requirements to qualify as an "establishment", as the European Court of Justice ruled in the Interedil case, C 396/09.

For that reason, if the concept of "establishment", should to be interpreted as meaning that it cannot include the place of business of a debtor company which meets the express criteria laid down in Article 2(10) of the Regulation but is situated in the territory of the Member State as a branch of that company, "local interests", which include in particular the interests of creditors established in that Member State, would not benefit from the protection provided for by the Regulation in the form of the opening of secondary proceeding in that Member State, for example.

When adopting national provisions laying down the conditions for the opening of secondary proceedings, the Member States are required, according to the settled case-law of the European Court of Justice, to ensure that the effectiveness of the Regulation, having regard to its subject-matter, is secured, the relevant case-law in this regard being Endress, C 209/12.

 The provisions of the Regulation relating to the right of a creditor to request the opening of secondary proceedings are intended to offset the effects of the universal application of the law of the Member State in whose territory the main proceeding is opened by allowing, under certain conditions, the opening of secondary proceeding to protect local interests as well.

2.5. Factors relevant for determining COMI

2.5.1. Criteria for determining COMI - European perspective

The Preamble to the Regulation clarifies the presumption of COMI and the supporting evidence. The COMI presumption may be rebutted if the main reason for moving the registered office or habitual residence was to file an application for the opening of insolvency proceeding in a new jurisdiction and thereby affecting the interests of its creditors.

According to Recital 28 of the Preamble, “special consideration should be given to the creditors and to their perception as to where a debtor conducts the administration of its interests” in determining COMI. The change of COMI should impose an obligation on the debtor to inform creditors of the new location.

Some new provisions have been introduced in the EU Regulation to reduce problems caused by forum-shopping. Thus, it is established that the COMI presumption should not apply to a company, a legal person, or a self-employed natural person if the debtor has relocated its registered office or individual's principal place of business to another Member State during the three-month period prior to the application for the opening of insolvency proceedings.

The provisions of the new Regulation represent the codification of the European Court's case law on COMI, Interedil Case C-396/09 [2011] ECR I-9915; Hans Brochier Holdings Ltd v Exner [2006] EWHC 2594; Eurofood Case C-341/04.

In practice, European courts have required the provision of sufficient evidence to rebut the presumption and establish that COMI is in a jurisdiction other than that of the registered office.

In the decision in Case C-341/04, Eurofood IFSC Ltd, it is held that the presumption can only be rebutted by the factors both objective and accessible to the third party to establish the existence of a different actual situation. The fact that the economic choices are or may be controlled by a parent company in another Member State is not considered sufficient to remove the presumption. The Court has given an example of an objective situation which could rebut the presumption, namely "the case of a company which has not carried on any activity in the territory of the Member State in which its registered office is situated". Objectivity and ascertain-ability by third parties, in particular creditors, are necessary to ensure legal certainty and predictability in determining which courts of the Member States of the European Union have jurisdiction to open main insolvency proceedings.

Interedil Case C-396/09 [2011] ECR I-9915 describes as objective factors to be considered: the place where the administration is carried out, made public or sufficiently accessible to third parties; the place where the central administration of a company is located, different from that of its registered office, referred to as the real centre of management and supervision of its interests. It is specified that all places where the debtor company carries out economic activities and all places where it holds assets must be considered, insofar as these places can be verified by third parties, comprehensively assessed. According to the decision, the real estate owned by the debtor company, for which the company has concluded lease contracts, the existence of contracts for the financial exploitation of these assets cannot be considered sufficient elements to rebut the presumption.

In Videology Ltd, Case No: CR-2018-003870, the English court held in 2018 that a wider range of factors must be taken into account, such as the employment of staff, the placing of orders for goods and services, the sending of invoices, the making and collection of payments and the operations of a company's bank account, arguing that by their very nature these operations are far more likely to be ascertained by third parties than mere board or management meetings.

2.5.2. Criteria for determining COMI - international perspective and experience in the field

The COMI concept appears in the UNCITRAL Model Law on Cross-Border Insolvency (1997) with Guide to Enactment and Interpretation as a fundamental element for the operation of the Model Law. The UNCITRAL Model Law does not contain a definition of "centre of main interests". It only provides that the debtors' registered office is the COMI (Article 16(3)), a presumption like that in Article 3(1) of the European Regulation.

Although the UNCITRAL Model Law is not part of the European Regulation, the need to identify objective criteria for the application of the COMI test requires a careful analysis of the principles and rules proposed by the UNCITRAL Model Law, as well as the international case law developed in application of these principles.

In most cases, the following main factors, taken together, will indicate whether the place where the foreign proceedings commenced is the debtor's centre of main interests: first, the location of the debtor's central administration which is easily ascertainable by creditors.

In addition, the UNCITRAL Guide, at paragraph 147 indicates as factors that to be considered for the identification of the COMI: “the location of the debtor’s books and records; the location where financing was organized or authorized, or from where the cash management system was run; the location in which the debtor’s principal assets or operations are found; the location of the debtor’s primary bank; the location of employees; the location in which commercial policy was determined; the site of the controlling law or the law governing the main contracts of the company; the location from which purchasing and sales policy, staff, accounts payable and computer systems were managed; the location from which contracts (for supply) were organized; the location from which reorganization of the debtor was being conducted; the jurisdiction whose law would apply to most disputes; the location in which the debtor was subject to supervision or regulation; and the location whose law governed the preparation and audit of accounts and in which they were prepared and audited”.

In the American jurisprudence, the identification of relevant factors for determining COMI is linked to the concept of "nerve centre", i.e., the centre of interests of the company, but other elements are also considered, such as the location of the debtor's registered office, the location of its management, the location of its primary assets, the location of most of its creditors, the jurisdiction whose law applies to most disputes. However, the approach is different from the European view in determining the COMI for each individual entity, even if part of a group of companies.

Recent international case law also holds that there should be an element of permanence of the factors considered relevant, as well as the idea that a qualitative analysis of the factual situation requires the investigation and balancing of all relevant objective factors for the application of the test to identify COMI.

2.5.3. Criteria for determining COMI - national case law

Romania has had reduced exposure to cross-border insolvency issues and proceedings. Thus, there is still limited case law in this area.

3.Determination of the debtor's COMI

During the proceedings, the location of control and decisions, the location of operations, the location of creditors, the relations with third parties and the location of employees were indicated as relevant factors for determining COMI.

According to the uncontested statements of the creditors and the official records, it appears that the debtor has its registered office in ** and place of business on the territory of Romania since 1998, the declared field of activity being the construction of residential and non-residential buildings. The debtor has entered into subcontracting agreements with companies based in Romania, has accessed loans from banks with offices in Romania. It declared for the activity carried out in Romania 569 employees in 2017, with a turnover of 319,474,566 lei.

The contracts were concluded with Romanian creditors in the present case through representatives appointed for this purpose by the management of the company in **.

By the contracts concluded, the parties have recognized the jurisdiction of the Romanian courts and have expressly declared that the contracts will be interpreted in accordance with the Romanian laws.

The creditor ** stated that the debtor company is involved in several projects in Europe, many of the contracts being executed in Romania.

In the decision of 18.12.2018 the Tribunal ** found that the debtor is the leader of a group with more than 11,000 employees, active in the construction sector, the holder of orders managed either directly or in partnership with other companies worldwide.

It appears from the uncontested statements of the debtor ** that it is part of an international group of companies which is very active in ** and worldwide, being among the top 100 companies in the construction sector. The debtor has projects allocated in Romania of more than 1-billion-euro, large-scale infrastructure works, has an average number of more than 600 employees. The debtor's activity has been generating profit, as of 30.06.2018 the debtor recorded a net profit of 7,924,061 lei.

Other relevant information was not provided by the parties until the delivery of this interim judgment.

With regard to the place of control and administration, the creditors' claim that this was in Romania is not confirmed by the evidence submitted, which shows that even the appointment of the persons who signed the contracts in Romania and were responsible for their execution was carried out by the management bodies in **The activity of the directors and representatives of the company with registered office in **, appointed for the operations carried out in Romania is not such as to affect this finding, since the actual control of the debtor company was in fact carried out from Italy.

The presence of customers in Romania does not in itself establish COMI in this jurisdiction, having no relevance in comparison to the location of all the company's creditors, assets, and effective management.

It is also true that the debtor company has creditors in Romania, but there is no evidence that the Romanian creditors represent most of creditors, in relation to the existing mentions in the judgments rendered by the Italian Court, as noted above.

The evidence submitted shows that the company has about 10,000 employees worldwide, of which about 550-600 in Romania, the remaining employees being in other jurisdictions. In the absence of other evidence, it cannot be concluded that the creditors with claims resulting from labour relations, by the volume of claims and by the responsibilities held in the general framework, is a major factor establishing COMI in Romania.

With regard to the location of operations, without having an essential weight in the analysis, it is real that Romanian creditors, contracting with the Italian company having only a branch registered on the Romania, had or should have had the representation that the centre of operations in Romania is only a part of the activity of the company with its headquarter in Italy, involved different other activities, many of them of an international character.

As regards the relations with creditors, it is relevant from the contracts concluded, the subsequent procedures, the mutual communications in the execution of contractual obligations, that the Romanian contractors had the representation that the ** group is in **, reinforcing the expectations of at least some of the creditors that they were dealing with a company that would have a strong link with **.

In a global assessment, the following significant factors strengthen the presumption that Italy, the location of the debtor company's registered office, was COMI both at the time of the application for the opening of concordato preventivo in ** and of the insolvency proceedings in Romania: the central management of the company was made from ** at all relevant times; the company's representatives indicated that they operate from **; a substantial part of the creditors are located in **. The fact that operations were conducted at least to some extent in Romania is outweighed by the factors mentioned above, mainly the location of the decision-makers. Therefore, the evidence provided demonstrates that the debtor company's centre of main interests at the time of the application for the opening of proceedings was in Italy.

In conclusion, the presumption governed by the European Regulation has not been overturned by evidence showing that the COMI of the debtor is not in Italy, the location of registration of its principal place of business, but in Romania, where the company has an office and carries out economic operations.

4.The effects of the determination of COMI as being in ** on the issue of the general jurisdiction of the Romanian courts

Article 129, paragraph 2 of the Code of Civil Procedure provides that the lack of jurisdiction is of public order when the case does not fall within the jurisdiction of the courts.

The Romanian judge syndic, verifying the type of procedure, finds in the present case the request of the Romanian creditors to open the main insolvency proceeding, the secondary proceeding or the territorial insolvency proceeding of a company having its main centre of interests in ** and a place of business in Bucharest, Romania.

The Romanian judge, verifying ex officio the general, material, and territorial jurisdiction in accordance with Regulation (EU) No 2015/848, finds that the debtor's centre of main interests is not located on the Romanian territory, excluding the general jurisdiction of the Romanian courts to open the main insolvency proceeding of the debtor.

For the reasons set out above, the court admitted the exception of general jurisdiction, based on Article 132(4) of the Code of Civil Procedure, in relation to the application based on the provisions of Article 3(1) of Regulation (EU) no. 2015/848 for the opening of the main insolvency proceedings of the debtor having its centre of main interests in Italy, with the consequence of rejecting the application as inadmissible.

The disjointed file was registered under number **.

The subject matter of the file is the applications based on the provisions of Article 3(2) and Article 3(4) of Regulation No 848/2015, filed by the creditors ***, against the debtor **, with registered office in ** and a form of organisation ** in Bucharest, Romania.

By interim civil judgment no. 1668/ 27.03.2019, the Bucharest Tribunal, Civil Section VII, in the separate case, ordered the following: "Rejects the exception of general lack of jurisdiction of the Romanian courts, regarding the request based on the provisions of Articles 3(2) and 3(4) of the Regulation (EU) No 2015/848 for the opening of secondary proceedings and territorial insolvency proceedings of the debtor having the centre of main interests in ** and an establishment in Romania. Pursuant to Article 4(1) of EU Regulation No 848/2015, in conjunction with Article 131 of the Code of Civil Procedure, the Bucharest Tribunal, Civil Section VII, has the material and territorial jurisdiction to rule on the application based on the provisions of Article 3(2) for the opening of secondary insolvency proceedings and Article 3(4) of Regulation (EU) No 2015/848 for the opening of territorial insolvency proceedings in respect of the debtor having the centre of its main interests in ** and an establishment in Romania.

The case is resumed, with summons to the parties, for the resolution of the claims based on the provisions of Article 3(2) opening the secondary insolvency proceedings and Article 3(4) of Regulation No 848/2015 opening the territorial insolvency proceedings of the debtor having the centre of main interests in ** and an establishment in Romania.

Postpones the resolution of the objection of inadmissibility raised by the debtor.

With reference to the provisions of Article 38(1) of Regulation (EU) No 2015/848, the parties are requested to submit within 10 days the correspondence address of the judicial commissioners appointed by the Tribunal of ** in case No **.

It requests the parties to submit to the file evidence of the decision pronounced by the Tribunal of ** in the concordato preventivo no. **, after the expiry of the 60-day period established by the decision of 18.12.2018 of the Tribunal of Rome, if the restructuring proposal was formulated by the debtor and confirmed by the Tribunal of **, as well as evidence of the status of the bankruptcy petition filed against the debtor before the same Tribunal.

In the event of refusal of the parties to submit evidence, an address will be issued to the Tribunal of ** in certified translation into ** language at the expense of the creditors, in order to communicate: the correspondence address of the judicial commissioners appointed by the Tribunal of ** in case no. **, the decision pronounced by the Tribunal of ** in the “concordato preventive” procedure no. **, after the expiry of the 60-day period established by the decision of 18.12.2018 of the Tribunal of **, the decision ordered on the insolvency petition filed against the debtor with the Tribunal of **.

Ask the creditors to state whether they have filed a statement of claim under Article 45(1) of Regulation (EU) No. 2015/848, whether they have received from the judicial commissioners appointed in case No. 63/2018 notification under Article 171 of the ** Bankruptcy Act or an undertaking under Article 36 of Regulation No. (EU) 2015/848".

In the disjoined case, during the proceeding:

On the 09.04.2019 the creditor ** submitted clarifications, in which it indicated that it had not been notified pursuant to art. 171 of the Italian Bankruptcy Law by commissioners appointed in case no. **. In the absence of notification and the fact that Regulation No 2015/848 does not mention the time-limit within which a statement of claim could be submitted under Article 45(1) of the Regulation, the creditor explains that it was objectively unable to submit a statement of claim in case No ** pending before the court ** Regarding the undertaking provided for in Article 36 of Regulation No 2015/848, the debtor has not provided such an undertaking.

On the 16.04.2019, the debtor filed with reference to the provisions of Article 38(1) of Regulation No 2015/848 clarifications on the procedure at the Court of ** in case No **, stating that the procedure before the court ** is at the stage of discussing the restructuring proposal to obtain the creditors' approval, then it will be submitted to the court for confirmation. An attestation of the submission of the restructuring plan by the debtor on 14.02.2019 was attached, but in ** language, without certified translation into Romanian.

In the council chamber of 18 April 2019, the Bucharest Tribunal, VII Civil Section, took the following measures:

"Order the address to the Tribunal of **, with the following content:

In view of the existence on the Bucharest Tribunal's case no. ** concerning the applications made by the Romanian creditors.... based on the provisions of Article 3(2) and Article 3(4) of EU Regulation (EU) No 2015/848 opening the secondary proceeding or the territorial insolvency proceeding of the debtor ** having its centre of main interests in ** and an establishment in Romania - ** SUCURSALA ROMANIA BUCURESTI,

Having regard to the provisions of Article 38(1) of (EU) Regulation No 2015/848, according to which „a court seized of a request to open secondary insolvency proceedings shall immediately give notice to the insolvency practitioner or the debtor in possession in the main insolvency proceedings and give it an opportunity to be heard on the request”,

We request you to communicate the following: whether a main insolvency proceeding within the meaning of Article 3(1) of EU Regulation No 2015/848 is opened against the debtor ** in the Tribunal of **; the decision rendered by the Tribunal of ** in case No ** after the expiry of the 60-day time limit set by the decision of 18.12.2018 of the Tribunal of ** whether the proposal for concordato preventivo was formulated by the debtor and confirmed by the court, as well as the status of the bankruptcy petition registered against the debtor in the same Court.

 The Tribunal order an address to the judicial commissioners appointed by the Tribunal of ** in case no. **, to communicate the following:

-if main insolvency proceedings within the meaning of Article 3(1) of EU Regulation No 848/2015 are opened against debtor ** before the Tribunal of **;

-the decision rendered by the Tribunal of ** in case no. **, after the expiry of the 60-day deadline set by the decision of 18.12.2018 of the Tribunal of **, if the proposal for concordato preventivo was formulated by the debtor and confirmed by the Italian court, as well as the situation of the bankruptcy petition registered against the debtor with the same Court.

-if the Romanian creditors...have been notified in the Italian procedure

- whether the Romanian creditors have filed claims under Article 45(1) of EU Regulation No 848/2015, whether they have received from the judicial commissioners appointed in case no. 63/2018 notification under Article 171 of the Bankruptcy Act ** or an undertaking under Article 36 of EU Regulation No 2015/848.

The notices will be translated into ** certified translation, at the diligence of the parties, and communicated to the Tribunal of ** respectively to the judicial commissioners appointed in case no. **, on 09.05.2019”.

By the application registered on 02 May 2019 under no. ** at the Bucharest Tribunal, the creditor ** filed a request for waiver of the trial, pursuant to the provisions of Article 406 paragraph 1 of the new Code of Civil Procedure.

By the application registered on 06 May 2019 under no. ** with the Bucharest Tribunal, Civil Section VII, the creditor ** applied for waiver of the proceeding, pursuant to Article 406(1) of the new Code of Civil Procedure.

By application registered on 10 May 2019 under no. ** with the Bucharest Tribunal, Civil Section VII, the creditor ** applied for waiver of the proceeding, pursuant to Article 406(1) of the new Code of Civil Procedure.

By application registered on 13 May 2019 under no. ** with the Bucharest Tribunal, Seventh Civil Section, creditor ** applied for waiver of the proceeding, pursuant to Article 406(1) of the new Code of Civil Procedure.

By application registered on 20 May 2019 under no. ** with the Bucharest Tribunal, Civil Section VII, the creditor ** applied for waiver of the proceeding, pursuant to Article 406(1) of the new Code of Civil Procedure.

By application registered on 21 May 2019 under no. ** with the Bucharest Tribunal, Civil Section VII, the creditor ** applied for waiver of the proceeding, pursuant to Article 406(1) of the new Code of Civil Procedure.

By application registered on 23 May 2019 under no. ** with the Bucharest Tribunal, Civil Section VII, the creditor ** filed a request for waiver of the trial pursuant to the provisions of Article 406(1) of the new Code of Civil Procedure.

At the hearing date of 23.05.2019, the court, in light of the requests for waiver of the trial made by the creditors, the procedural position expressed by the parties and the documents of the file,  the provisions of the hearing conclusions of 18.04.2019, in the sense that it is no longer necessary to return with addresses to the Court of ** and to the debtor ** through the judicial commissioners appointed by the Court of ** in case no. **, granted the floor on the objection of inadmissibility of the applications for the opening of secondary or territorial insolvency proceedings against the debtor.

The issue debated and analysed: the objection of inadmissibility of the request based on the provisions of Article 3(3) for the opening of secondary insolvency proceedings and Article 3(4) for the opening of territorial proceedings against the debtor having its centre of main interests in Italy and a registered office in Romania.

To resolve the objection, it is necessary to analyse whether the proceeding before the Tribunal of First Instance of ** is an insolvency proceeding within the meaning of the European Regulation, i.e., main insolvency proceeding allowing the opening of secondary insolvency proceedings in Romania. On the contrary, in the absence of a main insolvency proceeding, it must be verified whether it is admissible to open a territorial insolvency proceeding in Romania.

1.Summary of the parties' requests

The Romanian creditors requested the opening of the secondary insolvency proceeding of the debtor, given that it is found that the procedure ** of concordato preventive is a main insolvency procedure, within the meaning of the European Regulation, respectively the opening of the territorial insolvency proceedings because of the finding that no main insolvency proceeding has been opened in the Italian jurisdiction.

The debtor pleaded the inadmissibility of the requests for the opening of secondary or territorial insolvency proceedings.

The creditor ** argued in the public hearing of 21.03.2019 that the concordato preventivo was opened at the request of the debtor pursuant to Article 161(6) of the insolvency law in force in ** being in fact an agreement of the debtor with the creditors in ** It considers that no main insolvency proceeding is opened in ** so that Regulation (EU) No 2015/848 to apply in priority to the provisions of Romanian law. It also pointed out that a debtor cannot use a procedure to prejudice the rights of its creditors. If the court considers that the arrangement with creditors in ** is a main proceeding, it considers that it is admissible to open a territorial secondary proceeding in Romania, by reference to the provisions of Article 3(2) of the Regulation, Article 3(3) and (4) final sentence of Regulation 848/2015. It requested the opening of a territorial proceeding. The creditor **, through its representative, agrees with the conclusions expressed by the creditor **.

The debtor has indicated that there is one main proceeding opened in **, namely the concordato preventivo; only one main proceeding may be opened, which may run in parallel with one or more territorial proceedings. Regarding the objection of inadmissibility of the requests for opening secondary insolvency proceedings, the debtor pointed out that the Romanian courts cannot open insolvency proceedings against a branch, the latter being a dismemberment without legal personality. If there had been an entity with legal personality in Romania, secondary proceedings could have been opened. The debtor argued that in Romania a more severe procedure cannot be opened against a branch since in Italy it was considered that the concordato preventivo was required.

In the public hearing of 23.05.2019 the debtor argued that a secondary insolvency proceeding can be opened. It states that the concordato preventivo is a pre-insolvency proceeding according to the provisions of Regulation 2015/848, listed in the Annex to the Regulation.

Applicable legal framework:

2.1. Main proceeding, secondary proceedings, territorial insolvency proceedings.

The (EU) Regulation 2015/848 provides in Article 3(1) the possibility of opening the main insolvency proceedings of the debtor in the Member State where the debtor's centre of main interests (COMI) is located.

As regards the opening of secondary insolvency proceeding, according to the EU Regulation international jurisdiction is linked to the existence of an establishment. Secondar proceeding may be opened in the Member State where the debtor has an establishment, if the main proceeding has been opened, in this respect Article 3(3) of the EU Regulation expressly provides: „where insolvency proceedings have been opened in accordance with paragraph 1, any proceedings opened subsequently in accordance with paragraph 2 shall be secondary insolvency proceedings”.

The person entitled to request the opening of such proceedings can be the insolvency practitioner in the main proceedings or any other person or authority empowered to request the opening of insolvency proceedings under the law of the Member State within the territory of which the requested secondary proceeding is opened.

The applicable law shall be the law of the Member State in which the secondary proceeding is opened, and the effects of the secondary proceeding shall be limited to assets situated in that Member State.

The Regulation (EU) No 2015/205 imposes the coordination of main and secondary proceedings by extending the duty of cooperation, which applies both to insolvency practitioners and to the courts involved in main and secondary proceedings.

 Territorial insolvency proceedings may be opened in the absence of main insolvency proceedings under certain conditions. In this respect Article 3(4) of Regulation No. 2015/848 provides that “the territorial insolvency proceedings referred to in paragraph 2 may only be opened prior to the opening of main insolvency proceedings in accordance with paragraph 1 where (a) insolvency proceedings under paragraph 1 cannot be opened because of the conditions laid down by the law of the Member State within the territory of which the centre of the debtor's main interests is situated; or (b) the opening of territorial insolvency proceedings is requested by (i) a creditor whose claim arises from or is in connection with the operation of an establishment situated within the territory of the Member State where the opening of territorial proceedings is requested; or (ii) public authority which, under the law of the Member State within the territory of which the establishment is situated, has the right to request the opening of insolvency proceedings”.

2.2. The concept of "establishment" in the European legislation and international case law

Article 2(10) of the European Regulation defines the term "establishment" as any place where the debtor carries out or has carried out, for a period of three months prior to the application for the opening of the main insolvency proceedings, “a non-transitory economic activity with human means and assets”.

As defined in Article 2(f) of the UNCITRAL Model Law, the establishment “means any place of operations where the debtor carries out a non-transitory economic activity with human means and goods or services”. This definition differs slightly from the definition in the European Regulation, which considers the carrying on of a non-transitory economic activity with human means and assets.

In paragraph 71 of the Virgós-Schmit Report, an important document for understanding and applying the relevant European regulations, in relation to the definition of establishment it is stated: “Place of operations means a place from which economic activities are exercised on the market (i.e. externally), whether the said activities are commercial, industrial or professional. The emphasis on an economic activity having to be carried out using human resources shows the need for a minimum level of organization.  A purely occasional place of operations cannot be classified as an "establishment".  A certain stability is required.  The negative formula ("non-transitory") aims to avoid minimum time requirements.  The decisive factor is how the activity appears externally, and not the intention of the debtor”.

The requirement of activities with the debtor's assets and human factors suggests a professional activity consisting of dealings with third parties, externally manifested activity and not pure acts of internal administration, The same view was expressed by the European Court of Justice in Interedil [2012] Bus LR 1582, para 49, to the effect that the activities must be sufficiently accessible to enable third parties, i.e., the company's creditors, to be aware of them.

2.3. The scope of the European Regulation No (EU) 2015/848 - pre-insolvency proceedings; hybrid proceedings.

Analysing the scope of the European Regulation, Article 1 states that the Regulation shall apply to “public collective proceedings, including interim proceedings, which are based on laws relating to insolvency and in which, for the purpose of rescue, adjustment of debt, reorganization or liquidation: (a) a debtor is totally or partially divested of its assets and an insolvency practitioner is appointed; (b) the assets and affairs of a debtor are subject to control or supervision by a court; or (c) temporary stay of individual enforcement proceedings is granted by a court or by operation of law…”.

According to Article 1(1) of the EU Regulation and interpreting the ECJ decision EuroFood Case C-341/04, insolvency proceedings must have four features: collective proceedings, based on the insolvency law, involving at least partial assignment of the debtor, and causing the appointment of a liquidator. Article 2(4) defines "insolvency proceedings" as "proceedings listed in Annex A"; and Recital 9, proceedings listed in Annex A "which meet the conditions set out there in". Thus, the term "insolvency proceedings" refers to proceedings which fulfil the conditions set out in Article 1(1).

The EU guideline, based on actual trends and developments in the Member States, tends to extend the scope of the Regulation to pre-insolvency and hybrid proceedings.

Article 1(1) covers situations related to the insolvency of the debtor and those where „there is only a likelihood of insolvency”.

Some comments should be made. Firstly, there is no definition of insolvency or likelihood of insolvency in the European Regulation. Consequently, the insolvency test depends on national provisions and may differ from state to state. The most used criteria for the insolvency test are the cessation of payments test and the balance sheet test.

Proceedings must be "public" to “allow creditors to become aware of the proceedings and to lodge their claims, thereby ensuring the collective nature of the proceedings, and in order to give creditors the opportunity to challenge the jurisdiction of the court which has opened the proceedings” (Recital 12) and collective.

Confidential preliminary proceedings in a cross-border context or confidential arrangements for negotiation between the debtor and some of its creditors for a refinancing agreement do not usually fall within the scope of insolvency law because of their contractual nature. According to Recital 13, "insolvency proceedings that are confidential should be excluded from the scope of this Regulation".

Article 2(1) establishes that collective proceedings are "proceedings which include all or a significant part of the debtor's creditors, provided that, in the latter case, the proceedings do not affect the claims of creditors who are not involved therein". Clarifications appear in Recital 14.

In European doctrine and judicial practice, it has emerged that insolvency is not a condition for the inclusion of proceedings in the Regulation (EU) 2015/848, due to the pre-insolvency proceedings. Even if a common definition would be provided by the Regulation, different interpretations are still possible and may be formulated by Member States.

The European Insolvency Regulation covers "pre-insolvency" and "hybrid" proceedings, i.e., those quasi-collective proceedings under the supervision of a court or administrative authority that give a debtor in financial difficulties the opportunity to restructure at an early stage and avoid the initiation of insolvency proceedings in the traditional sense.

Furthermore, Articles 1(1)(3) and 2(4) provide those proceedings which meet the conditions set out in Article 1(1), are listed in Annex A, which means that for proceedings included in Annex A, the European Regulation applies without further examination, and for proceedings not included in the Annex, it can apply if, because of an examination, it is found that they meet the conditions set out in the Regulation.

2.4. Rules on recognition of main insolvency proceedings - international perspective and experience

Article 19 of the European Regulation provides that “any judgment opening insolvency proceedings handed down by a court of a Member State which has jurisdiction pursuant to Article 3 shall be recognized in all other Member States from the moment that it becomes effective in the State of the opening of proceedings”.

The European Regulation also considers proceedings that have been commenced but not formally "opened". According to Article 2(7), the "judgment opening insolvency proceedings" is not only "the judgment of any court opening insolvency proceedings or confirming the opening of such proceedings", but also the judgment of a court appointing an insolvency practitioner.

This provision was necessary to include hybrid and pre-insolvency proceedings as well as interim proceedings, which, according to Recital 15, are opened and conducted for a certain period. Judgments relating to these measures are automatically recognised in accordance with Article 32(1)(3). These instruments do not prevent foreign creditors from requesting the opening of secondary proceedings. Creditors may always have recourse to local insolvency proceedings to censure actions taken in foreign main proceedings in respect of local assets.

Application of general rules to the factual situation

3.1. Qualification of the Italian concordato preventivo

The debtor has provided evidence of the applicable legislation ** (vol. 8, files 117-141), according to which the debtor in financial difficulty may promote an application for the opening of concordato preventivo, submitting together with the list of creditors an updated report on the asset’s situation and other documents. The application may be accompanied by the restructuring proposal or may be followed within 60/120 days by a restructuring plan according to art. 161 of the Italian Insolvency Law.

The application must be addressed to the court in whose district the company has its registered office. By a reasoned decision setting the deadline within which the debtor must submit the restructuring plan, the court may appoint a judicial commissioner. Article 168 of the Italian law establishes that from the date of publication of the request for the opening of the concordato preventivo in the commercial register and until the decision approving the restructuring plan becomes final, creditors with a prior title or cause of action are not entitled to initiate or execute enforcement and protective actions against the debtor's assets. The appointed judicial commissioner must check the list of creditors and debtors, notify the creditors, draw up an inventory of the assets and a detailed report. The restructuring plan is addressed to the creditors for discussion. If the plan has been approved, it is submitted to the court for examination and confirmation under Article 180 of the Italian law, within nine months of the registration of the application, according to Article 181.

The restructuring procedure under Italian law is an insolvency procedure within the meaning of the European Regulation, which is expressly identified in Annex A as a procedure to which Regulation (EU) No 2015/848 is applicable, even though, according to Italian legal provisions, it is in fact a preventive restructuring proceeding and the proposal has not been confirmed by the Italian court until the date of delivery of this judgment.

3.2 The recognition of the procedure ** is automatic, without any further formality.

The answer to the question whether the European Regulation applies to the "concordato preventivo" procedure is positive.

 This procedure clearly fulfils the conditions laid down in Article 1 and constitutes a category of general procedure included in Annex A, and there is no reason to consider it outside the scope of the European Regulation. Moreover, the explanation is to be found in the second sentence of Article 4(1) of the Regulation, according to which "the decision opening insolvency proceedings shall specify the grounds on which the jurisdiction of the court is based and, in particular, whether jurisdiction is based on Article 3(1) or (2)".

It is true that the court ** which opened the pre-insolvency restructuring proceedings should have specified whether it was opening main or secondary insolvency proceeding, but in the light of the arguments set out above, the judgment delivered by the Tribunal of **benefits from automatic recognition in Romania. Under the terms of Articles 19 and 32 of the European Regulation, the judgment opening the concordato preventivo issued by the Italian court is recognised in the Member States, including Romania.

4.The court's decision on the objection of inadmissibility.

About the objection of inadmissibility supported with the argument that insolvency proceedings cannot be opened against a company having its registered office in **and the form of organisation of the branch, the considerations set out in paragraph 2.4. of civil judgment no. 1668 delivered in the case on 27.03.2019 regarding the regulation in national law of the concept of "branch" and the relationship with European legal provisions shall be considered.

The idea of inadmissibility of the requests for opening the secondary proceedings in Romania with the argument that the concordato preventivo cannot be assessed as an insolvency proceeding and does not fall within the scope of EU Regulation No 2015/2015, will also be rejected in view of the considerations set out in paragraphs 2 and 3 of this judgment, which will not be repeated.

The concordato preventivo is an ongoing preventive restructuring proceeding listed in Annex A and subject to the rules of EU Regulation No 2015/848.

In Romania the debtor has an "establishment" within the meaning of Article 2(10) of the EU Regulation.

The debtor is a company in financial difficulty, with its centre of operations in ** which also carries out its activity in Romania. The debtor is going through a restructuring procedure in **, has proposed a restructuring plan which has not yet been approved by the court **.

As noted above, Rome is COMI for the debtor. The management and board meetings which direct control and coordinate the debtor's activities and where its administration is regularly conducted, are in **. The debtor's activities in Romania do not meet the conditions to conclude that the debtor has COMI in this jurisdiction.

The debtor has an establishment in Bucharest, place of operation where it carries out a non-transitory economic activity with human means and goods or services, fulfilling the criteria set out in Article 2(10) of the Regulation for the opening of secondary insolvency proceedings. For example, the debtor has representatives in Romania to pay and conclude contracts with local creditors.

Whether an economic activity is non-transitory depends on the duration, frequency, and nature of the activity. Conducting business and paying debts in Romania is not transitory because it has the character of a constant business activity. The economic activity undertaken in Romania also corresponds to the nature and type of activity that the debtor carries out internationally.

The debtor carries out economic activities on the local market in this location. Interaction with external third parties is required to prove an establishment. The activities of the corporate debtor must have a perceptible effect on the local market, the internal administration is not sufficient. From this point of view, it is noted that the debtor carries out an activity by which it offers "goods or services" on the publicly known Romanian market.

The evidence in the case shows that the debtor has regularly managed and conducted business relations with several Romanian creditors, among which, most of them are party to the present case. These activities are clearly of an economic nature and were carried out through persons designated as representatives by the company's management in Italy. They involve the company's commercial relations with third parties who perceived the Romanian branch as being associated with the debtor's headquarters. The existence of an establishment in Romania was proven, showing the minimum required level of organisation, stability and external business relations referred to in the Virgós-Schmit Report and European regulations.

Analysing the effects of the qualification of the concordato preventivo as the main insolvency procedure on the type of proceedings that may be opened by the court in Romania, the court finds that the provisions of Article 3(2) and (3) of the Regulation (EU) No 2015/848 on insolvency proceedings are to be applied.

The debtor's contention that a secondary insolvency procedure cannot be opened when in the Member State the main procedure is a pre-insolvency procedure cannot be considered relevant, as such a condition is not regulated in the European Regulation or in the national legislation.

It is admissible to file an application for the opening of secondary insolvency proceedings against the debtor **, having a COMI in **, where it is registered with an establishment in Bucharest, Romania, under the form of organisation called "branch".

As a result of the above findings, the objection of inadmissibility of the applications for opening of secondary insolvency proceedings against the debtor, based on the provisions of Article 3(2) and (3) of EU Regulation No 848/2015, will be rejected and the court will retain these applications for resolution.

It is therefore superfluous to analyse the objection in relation to the subsidiary applications made by creditors for the opening of the territorial insolvency proceedings against the debtor.

On the creditor's requests to take note of the waiver of the applications for the opening of secondary insolvency proceedings against the debtor, based on the provisions of Article 3(2) and (3) of Regulation (EU) No 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings.

The law applicable to the secondary insolvency proceeding is that of the Member State in whose territory the secondary proceeding is opened, in this case the Law No 85/2014 and the provisions of the Romanian Code of Civil Procedure regarding the procedure to be followed in the event of the creditors' applications for a waiver of proceedings.

As a manifestation of the obligations of judicial cooperation, as stipulated by the European Regulation, in application of the provisions of Article 38(1) of the Regulation (EU) No 848/2015, before ruling on the merits of the application for the opening of secondary insolvency proceedings, it is necessary to notify immediately the insolvency practitioner or the debtor in possession in the main insolvency proceedings, in this case concordato preventivo **, in order to give him the opportunity to be heard on the application.

However, given the creditors' requests, the principle of the availability of the parties' procedural rights applicable in civil proceedings, the finality pursued by the creditors in requesting to take note of the waiver of the application for secondary the proceeding, the court will give priority to the creditors' requests made during the proceedings.

According to Article 406(1) of the Code of Civil Procedure, the plaintiff may waive the trial at any time, either orally in a hearing or by written request.

In view of the express statements made by the creditors, the requirements of the text of the law having been met, the court will take note of the requests for waiver of trial.

It will be noted that no costs have been claimed.

FOR THESE REASONS

IN THE NAME OF THE LAW

DECIDES

Dismisses the objection of inadmissibility of the applications for the opening of secondary insolvency proceedings against the debtor, based on the provisions of Article 3(2) and (3) of Regulation (EU) No 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings.

Pursuant to Article 406 of the Code of Civil Procedure, take note of the waiver of the creditors *** of the application for the opening of secondary insolvency proceedings against the debtor **, with registered office in ** and organizational form ** SUCURSALA ROMANIA BUCURESTI SRL in Bucharest, Romania.

Take note that no costs have been requested.

With right of appeal.

The request for appeal shall be submitted to the Bucharest Tribunal.

Pronounced today 06 June 2019, by making the solution available to the parties by the court registry.

PRESIDENT                                    COURT OFFICER