Reassessing the COMI Debate: Insights from an Emerging Economy( Brazil)
By Sabrina Maria Fadel Becue Post-Doctoral Researcher in Commercial Law, University of São Paulo, Brazil
1
The UNCITRAL Model Law on Cross- Border Insolvency( MLCBI), which recently celebrated its 25th anniversary, is widely recognized as a thoroughly analyzed instrument by both scholars and courts. Like other legal technologies developed by UNCITRAL, the MLCBI and its accompanying Guide to Enactment employ neutral terminology, purposefully avoiding alignment with any specific legal tradition or existing insolvency regime. To achieve its objectives, the MLCBI introduces novel concepts( Art. 2) and establishes its unique mechanism for international judicial cooperation: the recognition of foreign proceedings( Art. 15).
Despite its function as a legislative harmonization tool, the MLCBI operates through persuasive soft power, requiring countries to be convinced of the benefits of adopting its provisions. To address national resistance or indifference, legislators must view the MLCBI as delivering clear economic and trade advantages— an expectation that may account for its slow adoption rate. However, the reliance on neutral language and a pragmatic approach, while facilitating consensus, comes at a cost: interpretation remains a critical and complex challenge, potentially undermining the effective realization of the MLCBI ' s objectives.
A key component of the MLCBI, and other model laws proposed by UNCITRAL, is the
1
This article was originally written for Insolvency Now Magazine. concept of the Center of Main Interest( COMI). Despite its paramount importance, the MLCBI does not provide a definition of COMI and courts have struggled to agree upon a clear and unified interpretation. The COMI concept was developed in the 1980s, reflecting a very different commercial landscape, one not yet dominated by multinational corporations or a digital economy. Today, the global mobility of capital and the interconnected nature of business transactions do not result in harmonized regulations or uniform legal standards which address the consequences of such commercial relationships.
The debate over the advantages of COMI within the framework of the MLCBI intensified in late 2023, when a group of prominent scholars submitted a letter to UNCITRAL advocating for the elimination of the concept from the Model Law 2. Professors Anthony J. Casey, Aurelio Gurrea-Martínez, and Robert K. Rasmussen 3 are the leading
2
Available at: https:// ccla. smu. edu. sg / sgri / blog / 2023 / 09 / 15 / towards-new-approach-choiceinsolvency-forum.
3
See Casey, Anthony J., and Joshua C. Macey, Bankruptcy Shopping: Domestic Venue Races and Global Forum Wars, 37 Emory Bankr. Dev. J. 463( 2021); Gurrea-Martínez, Aurelio, Reinventing Insolvency Law in Emerging Economies( Cambridge Univ. Press 2024); Casey, Anthony, Aurelio Gurrea-Martínez, and Robert K. Rasmussen, A Commitment Rule for Insolvency Forum( Jan. 23, 2024), European Corporate Governance Institute- Law Working Paper No. 754 / 2024, USC CLASS Research Paper No. 24-13, Singapore Management University School of Law Research Paper No. 5 / 2024, Univ. of Chicago Coase-Sandor Inst. for Law & Econ. Research Paper No. 1003, available at http:// dx. doi. org / 10.2139 / ssrn. 4704029. continued on page 36
17