Brexit—the UK’s exit from the European Union—became fully effective at the turn of the year with the expiry of the implementation period on 31 December 2020.
Prior to 1 January 2021, recognition and enforcement of restructuring and insolvency procedures and judgments between the UK and EU member states was subject to common EU regulations which had direct effect and broadly offered automatic recognition. Those common regulations no longer apply to the UK.
Notwithstanding the loss of these regulations, there remains an effective legal framework for recognition of inbound proceedings and judgments from EU member states to the UK, including the Cross-Border Insolvency Regulations 2006 (Great Britain’s enactment of the UNCITRAL Model Law on Cross-Border Insolvency). Recognition of UK proceedings and judgments (including schemes of arrangement) in the EU will be subject to the local laws (including EU law) of the individual member states concerned; this is not expected to be unduly difficult in most cases but, as matters stand, will not be as straightforward as it was prior to Brexit. Additional court applications and procedural hurdles are likely to be encountered, requiring expert navigation.
More detail will follow in the Q1 edition of our International Restructuring Newswire due later this month.