COMI in Cross-Border Insolvency: A Comparative Analysis of India, US, and Singapore and an alternate way forward

K.V. Mahitha* , Aanjaneya Singh*

Introduction

Cross-Border insolvency law is built on the idea and assumption that a single “main” forum can marshal assets, coordinate creditors, and deliver an efficient collective resolution. Since 1997, that promise has been anchored in the Centre of Main Interests (COMI) presumption of the UNCITRAL Model Law and, in the European Union, the Insolvency Regulation. Yet a quarter-century of experience shows that COMI’s open-textured, ex-post inquiry often breeds the very evil it was meant to cure: strategic and malafide forum shopping that erodes creditor confidence and fragments value. This paper argues that the weakness lies not in the universalist ideal itself, but in the doctrinal levers—timing rules, evidentiary burdens, and public-policy gateways—that let sophisticated debtors game the system while overwhelming dispersed creditors. Through a comparative analysis of India, the United States, and Singapore—Singapore and the United States being two jurisdictions with developed and advanced Insolvency and Cross-border insolvency frameworks, frequently praised as “best practice” but riddled with distinct vulnerabilities. The authors shall aim to uncover how doctrinal indeterminacy perpetuates opportunistic COMI migration. Building upon the “Commitment Rule”, propounded by Professors Casey, Martínez and Rasmussen, we have attempted to advance a regulatory pre-approval model that seals the choice of forum, well before distress, subjects it to an objective economic-substance test, and creates a limited, fast-track appeal. The aim is not to freeze corporate mobility but to channel it toward transparent, value-maximising outcomes that vindicate both creditor equality and systemic stability.

Background

Emerging from the Model Law on Cross-Border Insolvency (1997) of the United Nations Commission on International Trade Law (UNCITRAL) was the idea of the “Centre of Main Interests” (COMI). Article 16(3) of the Model Law creates a presumption that a debtor’s registered office is its COMI, unless evidence proves the debtor conducts regular business, especially the management of its interests, in a different jurisdiction, in a manner which is ascertainable by third parties. This structure identifies the jurisdiction whose proceedings will be regarded as the main ones. Conducting and controlling recognition of foreign proceedings, the extent of judicial cooperation, and the application of domestic insolvency rules in cross-border cases shape the main insolvency process.¹

Judicial interpretation has evolved over time from a formalistic dependence on the registered office of the debtor to a multifactorial, fact-sensitive analysis. These days, courts look at a wider spectrum of factors, including the location of the debtor’s main assets, the site of the head office operations, and the jurisdiction where important management decisions are taken.² This flexible approach accommodates diverse corporate structures and evolving commercial realities, particularly for multinational enterprises. However, its very openness invites opportunistic manipulation. The lack of a rigid test enables debtors to shift their COMI in anticipation of insolvency, strategically anchoring proceedings in jurisdictions that offer more favourable restructuring outcomes or creditor treatment. This practice—commonly referred to as forum shopping—can advance debtor interests, but often at the cost of creditor trust and procedural fairness.³

Jurisdictional disparities aggravate these weaknesses even more. While some governments give operational substance top priority over official registration, others view the registered office presumption as almost irrebuttable. For instance, the European Court of Justice confirmed in In re Eurofood IFSC Ltd. (Case C-341/04) that, so long as this arrangement was open and clear to creditors, a subsidiary’s COMI could remain in the same state as its registered office even where the parent exercised significant control from another jurisdiction.⁴ The decision reinforced the importance of third-party expectations in COMI determination and became a touchstone for courts within the EU.

The universalist philosophy that guides the Model Law is still opposed by territorialist doctrines in spite of these attempts at harmonisation. The Gibbs Principle, which was first introduced in the English case Antony Gibbs & Sons v. La Société Industrielle et Commerciale des Métaux [(1890) 25 QBD 399], is a well-known example. This principle states that unless it is recognised by English law, a debt governed by English law cannot be discharged in foreign insolvency proceedings. This suggests that, absent additional English court approval, creditors subject to English law are not bound by restructuring plans authorised in the debtor’s COMI jurisdiction.⁵

The sanctity of contracts and the significance of legal certainty are cited by proponents of the Gibbs Principle. They contend that creditors shouldn’t be forced to face the consequences of insolvency in settings they did not select in their contracts, especially when local laws have the potential to significantly change their substantive rights. As a result, the principle prevents debtors from choosing a tactical jurisdiction and acts as a safeguard against unilateral impairment. Critics, such as Professors Jay Westbrook and Irit Mevorach, contend that this rule is incompatible with modified universalism and that it hinders effective coordination in cases of cross-border insolvency.⁶

The Gibbs Principle delays finality, creates the possibility of parallel proceedings, and fragments estate administration by allowing creditors to avoid foreign main proceedings. Additionally, it pushes creditors to take part in defensive litigation, which wastes money that could be saved for a group recovery. The Gibbs Principle’s application is not limited to the UK. Its reasoning has occasionally been repeated by courts in common-law jurisdictions like India. For instance, even though India has not formally adopted the Model Law, the Indian National Company Law Appellate Tribunal (NCLAT) ruled in Jet Airways (India) Ltd. v. State Bank of India (2020) that Indian insolvency proceedings could be held alongside those in the Netherlands. The ruling brought to light the doctrinal ambiguity surrounding the discharge of foreign law debts, a tension carried over from Gibbs’ legacy, despite being a step in the right direction.⁷

Singapore, on the other hand, offers a convincing illustration of a country that has accepted universalism. With the help of its strong moratorium framework and judiciary that is sensitive to international standards, Singapore has established itself as a major centre for cross-border restructuring since enacting the Model Law in 2017. Courts have emphasised that COMI must represent more than just corporate structure; it must also reflect economic substance. For instance, the Singapore High Court evaluated COMI based on management functions, creditor perception, and commercial reality in the Re Opti-Medix Ltd case, rejecting formalistic reasoning.⁸ Additionally, Singapore is an active member of the Judicial Insolvency Network (JIN) and has established cross-border cooperation protocols that place a high value on timeliness, efficiency, and transparency.

The enduring fragmentation in international insolvency law is highlighted by the contrast between territorialist regimes influenced by the Gibbs Principle and universalist jurisdictions such as Singapore. Insolvency is stubbornly national, despite the rapid globalisation of commerce. Many jurisdictions are hesitant to defer jurisdictional priority to foreign COMI-based proceedings or to accept foreign judgements that harm domestic creditors. This conflict erodes predictability, promotes forum shopping, and intensifies litigation. Such fragmentation is not just doctrinal, as the following sections contend; it also produces actual economic distortions and strategic incentives that undermine the overall objectives of insolvency law. Neither the Gibbs Principle nor COMI offer a completely satisfactory solution in this situation. The latter is too stiff, while the former is too pliable. In order to maintain the advantages of legal mobility and guarantee that forum selection is based on actual economic activity and procedural justice, a regulatory framework that distinguishes between opportunistic manipulation and productive forum planning is needed.

Even though the COMI framework represents a global trend towards universalism, not all jurisdictions have accepted its reasoning. The Gibbs Principle, as stated in the English Court of Appeal’s ruling in Antony Gibbs & Sons v. La Société Industrielle et Commerciale des Métaux (1890) 25 QBD 399, is a well-known counterargument. This doctrine states that only procedures under English law may be used to discharge a debt governed by English law. Unless they are officially acknowledged and upheld by an English court, insolvency proceedings carried out in another jurisdiction—even one that is legally the debtor’s COMI—are ineffective in fulfilling English-law obligations.⁹ Even if foreign restructuring plans are approved in a valid main proceeding, this method effectively shields English-law-governed creditors from their binding effects. Gibbs proponents base their argument on the idea that parties who choose English law for their contracts shouldn’t be forced to deal with unintended consequences of foreign insolvency.¹⁰ By protecting creditor rights and discouraging opportunistic forum shopping by debtors who might otherwise move their COMI to jurisdictions with more debtor-friendly regulations, the principle functions as a unilateral veto. Gibbs, however, has long been criticised for undermining the fundamental tenets of modified universalism, which served as the inspiration for the UNCITRAL Model Law.¹¹ By allowing individual creditors to opt out of collective processes initiated in the debtor’s COMI jurisdiction, Gibbs fosters fragmentation, parallel proceedings, along with extended and legal uncertainty.¹² It also contradicts the logic of international comity, since it permits domestic courts to deny effect to foreign restructuring plans purely on the basis of governing law, irrespective of procedural fairness or substantive equivalence.

The Gibbs Principle’s impact extends beyond England. Although they do not formally support the doctrine, common-law jurisdictions like India have adopted a similar judicial philosophy.¹³ Indian courts have occasionally refused to grant foreign insolvency orders extraterritorial effect, particularly when Indian creditors are involved or when local public policy is thought to be at risk. The result is a confused and unpredictable framework as nations like India attempt to modernise their insolvency regimes by referencing global best practices while simultaneously upholding traditional territorialist laws. Singapore, on the other hand, has made a clear commitment to universalism. Singapore has worked to align its insolvency laws with international norms since enacting the UNCITRAL Model Law in 2017. There, courts have continuously given precedence to economic substance over formal structure, evaluating COMI according to the location of actual business activity rather than the company’s nominal registration.¹⁴ This approach enhances predictability, supports efficient cross-border resolution, and reinforces the principle that procedural fairness and economic connection, not governing law alone, should determine the reach of an insolvency judgment. The deeper difficulty of harmonising cross-border insolvency law is reflected in the philosophical differences between territorialist regimes influenced by Gibbs and universalist jurisdictions like Singapore. Because national courts are frequently hesitant to relinquish interpretive control or acknowledge foreign processes that conflict with domestic legal traditions, insolvency remains a jurisdictional fragment despite the growing integration of global commerce.

Jurisdictional Analysis: COMI Across India, the United States, and Singapore COMI as Economic Substance: Convergence on Function Over Form

It is acknowledged by all three jurisdictions that COMI must represent actual economic activity rather than just ocial registration. A multifactorial COMI test is suggested by India’s CBIRC Report (2020), which takes into account factors like senior management’s location, important operational infrastructure, creditor interfaces, and nancial systems.¹⁵ These factors align with judicial practice in both Singapore and the United States, where courts have increasingly favoured a substance-over-form approach. In Re Opti-Medix Ltd [2016] SGHC 108, the Singapore High Court identied Japan as the COMI of a BVI-incorporated company based on creditor location, nancial records, and operational control.¹⁶ Similarly, U.S. courts in In re SPhinX Ltd. and In re Bear Stearns found that despite Cayman incorporation, COMI lay in the United States due to concentration of business functions and creditor expectations.¹⁷ In both systems, the registered oce serves only as a rebuttable presumption, and judges weigh “head oce functions,” management location, and transparency to creditors.

Temporal Inconsistencies and the Risk of Strategic COMI Manipulation

Timing dierences in COMI determination continue to be a major source of contention despite this common emphasis on substance. Similar to the EU Insolvency Regulation’s approach under Article 3(1), the CBIRC framework suggests evaluating COMI at the “date of commencement” of the foreign proceeding. Last-minute COMI shifts intended to gain access to debtor-friendly forums are intended to be limited by this timing rule.¹⁸ It echoes the EU’s protection against “COMI tourism” and represents a conscious rejection of opportunistic relocation. In contrast, U.S. courts evaluate COMI “at or near the time of the Chapter 15 petition,” which frequently happens weeks or months after foreign proceedings begin, in accordance with In re Faireld Sentry.¹⁹ This rule unintentionally opens the door for pre-recognition forum shopping, even though its purpose was to stop post-ling manipulation. The U.S. Bankruptcy Court recognised a Cayman scheme for a PRC real estate developer in Modern Land (China) Co. Ltd. (2022), despite the fact that the company’s assets and main business operations were located in China.²⁰ Similar to this, even though Ocean Rig’s operating assets were located outside of the Cayman Islands, recognition was given based on administrative and creditor interfaces there.²¹ In accordance with the text of the Model Law, Singapore also establishes COMI at the time of the recognition application; however, this is dierent from India’s suggested rule.²² Depending on when and where COMI is most advantageous, debtors are encouraged to forum shop between jurisdictions due to the procedural uncertainty caused by this variation in temporal benchmarks.

Combating Forum Shopping: Procedural Safeguards and Disclosure Duties

Although each jurisdiction has taken some steps to stop forum shopping, the effectiveness of their respective measures varies. A three-month disclosure requirement is introduced in India’s draft Part Z of the Insolvency and Bankruptcy Code, which requires debtors to notify creditors of any changes to their registered oce or operational centres prior to ling for bankruptcy.²³ This deters “midnight its” and is comparable to the EU’s three-month look-back period. Such disclosures improve judicial scrutiny and transparency, but they do not always render forum modifications invalid. On the other hand, neither Singapore nor the US currently enforce set time limits or require such disclosures. Judges must therefore deduce intent from circumstantial evidence, which leads to inconsistent results. Cases like Ocean Rig demonstrate that administrative COMI is tolerated in tax-haven jurisdictions as long as procedural transparency is maintained, despite Bear Stearns and SPhinX demonstrating that U.S. courts reject recognition due to insubstantial connections. This discrepancy undercuts the deterrent eect of forum shopping and emphasises how crucial it is to strengthen COMI timing safeguards through legislation or regulation.

Judicial Coordination and International Cooperation: Best Practice from Singapore

Singapore stands out for actively implementing procedural frameworks that improve international collaboration. The Judicial Insolvency Network (JIN) Guidelines, which promote joint hearings, inter-court communication, and insolvency procedure alignment, were advocated by it early on. To minimise conflict and delay, Singaporean courts collaborated closely with their U.S. counterparts to coordinate recognition and moratoria during the restructuring of Garuda Indonesia.²⁴ In order to enhance coordination between Indian courts and foreign representatives, the CBIRC Report specifically suggests implementing comparable soft-law mechanisms.²⁵ In contrast, judicial coordination is still implemented on an as-needed basis in the United States. Despite the Model Law’s encouragement of collaboration, Chapter 15 does not contain any required procedures to guarantee judges’ active communication, so practitioners are left to coordinate across systems with little institutional assistance.²⁶ All three jurisdictions have doctrinal limitations, despite their common universalist goals. The Model Law has not yet been adopted by India, and although its suggested framework seems promising, it has not yet been put to the test. Despite its progress, Singapore still lacks strict regulations to prevent opportunistic COMI engineering, especially in asset-light and digital rms.²⁷ As John J. Chung points out in his critique of Chapter 15’s “law of the ag” assumptions, the United States has come under re for its excessively strict universalism and disregard for creditor geography, despite its sophisticated procedural framework.²⁸

COMI under Strain: Fault-Lines in Two “Best-Practice” Jurisdictions

COMI in Practice: Strategic Vulnerabilities in the United States and Singapore

Scholars of cross-border insolvency frequently point to the US and Singapore as models of modied universalism because both countries have embraced the UNCITRAL Model Law and built complex procedural ecosystems around it. However, upon closer examination, it becomes clear that even these “gold-standard” systems have doctrinal aws that debtors could take advantage of to gain recognition in favourable forums or, on the other hand, to postpone proceedings in ways that deplete estate value. Despite more than 20 years of COMI jurisprudence, forum shopping is still common because of this enduring uncertainty, which undermines the fundamental promise of the COMI concept predictable, timely, and equitable resolution in a single coordinating forum.²⁹

The United States: Chapter 15’s Uneasy Marriage of Universalism and Pragmatism

Despite implementing the Model Law, Chapter 15 of the U.S. Bankruptcy Code has four
interconnected doctrinal peculiarities that encourage opportunistic behaviour. First, in contrast to the EU’s more stringent three-month look-back period, the COMI timing rule in In re Faireld Sentry xes the determination point “at or near the time of the Chapter 15 petition.”³⁰ A debtor who anticipates distress may open a U.S. bank account, move board meetings, or change treasury functions, and then claim COMI based on these newly selected indicators. This rule attempts to prevent manipulation after the petition, but it leaves a risky window for pre-ling. Due to pressure to make decisions on automatic stay matters quickly, U.S. judges frequently have to decide COMI on condensed records, which compromises stakeholder predictability.³¹

Second, even for closely knit enterprise groups, the Kaisa Group Holdings ruling (Delaware, 2024) reiterates that COMI must be assessed debtor-by-debtor.³² By requiring each affiliate to litigate COMI separately, this principle reduces venue shopping in “mega-cases,” but at the expense of fragmentation, increasing costs and delays in the legal process. Parallel proceedings are required of creditors with group-wide exposure—exactly the inefficiency that COMI was intended to prevent.³³ Third, there is evidentiary asymmetry because of the registered-oce presumption that is ingrained in Chapter 15. Although theoretically rebuttable, Bear Stearns and SPhinX show that substantial, frequently insider-controlled evidence is needed to overturn it in U.S. courts.³⁴ Trade creditors and tort claimants are at a structural disadvantage because they rarely have access to the board minutes, nancial records, or treasury memos required to demonstrate that COMI is located elsewhere.³⁵ Fourth, the public policy exemption provided by §1506 in Chapter 15 has diminished. Because courts interpret “manifestly contrary” so narrowly, they frequently recognise foreign proceedings that discriminate against specific creditor classes or lack procedural transparency.³⁶ Therefore, regardless of the fairness of the foreign process, debtors can anticipate that domestic assets will be protected by the automatic stay once U.S. recognition is obtained.³⁷ These design decisions have resulted in a jurisdiction that not only permits strategic COMI migration but also subjects creditors to front-loaded, litigation-heavy proceedings. As a result, Chapter 15 is more like the venue-selection chaos of domestic Chapter 11 than the unified vision of the Model Law, leading to distorted contracting incentives, holdout behaviour, and value erosion.³⁸

Singapore: Universalist Ambition with Residual Vulnerabilities

Singapore made a conscious effort to establish the jurisdiction as a global centre for restructuring with its 2017 omnibus reforms and its leadership in the Judicial Insolvency Network (JIN). Its courts prioritise time-zone advantage and common-law agility, and they provide resources like pre-packaged moratoria and super-priority debtor-in-possession financing. However, this proactive approach also creates weaknesses that debtors could take advantage of. First, even though Singapore abides by the Model Law, it calculates COMI based on the recognition application date rather than the start of the foreign proceeding.³⁹ Although the High Court in Re Opti-Medix favoured “commercial reality” in the COMI ruling, the timing of the decision deviates from both the EU model and India’s proposed legislation. ⁴⁰ A fund may fictitiously move operations to Singapore for ninety days, le a petition, and then claim that new indicators supersede an earlier COMI history elsewhere due to the lack of temporal harmonisation. This prolongs recognition disputes, particularly in parallel jurisdictions.⁴¹ Second, the JIN Guidelines are not legally binding even though Singapore’s judiciary supports the 3Cs: coordination, communication, and cooperation. The Singapore court commended the judicial coordination effort with Jakarta and New York in the Garuda Indonesia case, but it also recognised that such cooperation is highly dependent on reciprocal engagement.⁴² At the most critical time, Singaporean judges must resort to fact-intensive COMI assessments when foreign courts or debtors refuse to cooperate.⁴³

Third, Singapore’s jurisprudence is only beginning to grapple with digital economy debtors. In Re Zipmex Asia, the court considered online user bases and cloud contracts as COMI indicia, but ultimately defaulted to physical proxies—such as employee concentration and lease agreements—that tech-savvy firms can replicate quickly.⁴⁴ A cryptocurrency firms operating from Indonesia can fabricate a Singapore presence in weeks, then le under the guise of “economic substance.”45 Third, Singaporean jurisprudence is just starting to address debtors in the digital economy. The court in Re Zipmex Asia examined cloud contracts and online user bases as COMI indicators, but ultimately resorted to physical proxies, like employee concentration and lease agreements, which are easily replicable by tech-savvy companies.¹³ In just a few weeks, an Indonesian cryptocurrency company can create a Singaporean presence and then le under the pretence of “economic substance.”46 Together, these weaknesses mean that even Singapore’s modernised system is still vulnerable to strategic COMI migration, even with its institutional maturity and coherence. It runs the risk of reproducing the spillovers that beset the English scheme of arrangement and currently threaten the Dutch WHOA framework in the absence of stricter timing guidelines and more objective indicators.47

Comparative Lessons

When combined, the US and Singaporean experiences show a larger trend: jurisdictional arbitrage is made possible by doctrinal indeterminacy. Coordination mechanisms are still optional, insiders are given preference in evidentiary burdens, and timing benchmarks are flexible. Although legally defendable, these doctrinal levers give sophisticated debtors genuine incentives to influence forum selection in order to maximise results or postpone proceedings. Dispersed or foreign creditors bear a disproportionate amount of the resulting burden, which threatens collective resolution and erodes trust in procedural justice.⁴⁸ These shortcomings are not anomalies; rather, they represent an unresolved conflict between the collectivist logic of insolvency, which demands procedural integrity, and corporate mobility, which
is favoured by capital markets. A regulatory pre-approval framework that incorporates independent oversight and a temporal safe harbour to better balance mobility and discipline is developed in the following section as a solution to this conflict.⁴⁹ A model like this would safeguard against universalism’s most manipulable mechanisms while maintaining its positive aspects.

Forum Shopping in Cross-Border Insolvency: Structural Features and Doctrinal Failures Conceptual Foundations: Forum Shopping as Strategic Jurisdictional Choice

The intentional choice of one jurisdiction over another by litigants looking to maximise a procedural or substantive advantage is known as “forum shopping.” It is a structural aspect of global legal pluralism rather than an anomaly. Forum shopping requires two prerequisites, according to Whytock: (i) access to several forums; and (ii) significant distinctions between those forums that affect the outcome of legal proceedings, such as variations in the applicable law, procedure, burden of proof, or availability of remedies. ⁵⁰ Parties view jurisdictions as “catalogues” of legal opportunity in such a setting. The United States and other common law jurisdictions have historically taken a permissive approach. Forum shopping, according to Friedrich Juenger, is “the rational selection of a court perceived to maximise litigation outcomes.”⁵¹ The House of Lords has long acknowledged that litigants will select the forum “in which [a] case can be most favourably presented,” despite civil law courts occasionally denouncing it as opportunistic.⁵² The dierence between domestic and international forum shopping is helpful. Selecting courts within a single jurisdiction, such as state versus federal courts in the United States, is known as “domestic forum shopping.” In contrast, transnational forum shopping entails selecting from a completely different set of legal systems. The ruling in Piper Aircraft Co. v. Reyno by the U.S. Supreme Court serves as an example of both: intrajuridictional movement between U.S. forums after a transnational ling in the United States.⁵³ Crucially, forum shopping is not always a bad thing. According to Bookman, it can full significant informational and distributive purposes.⁵⁴ As in Maximilian Schrems v. Facebook Ireland Ltd., where Austrian proceedings resulted in a significant privacy ruling by the CJEU, plaintiffs may use foreign forums to access supranational adjudication or superior procedural environments.⁵⁵ Accordingly, forum shopping can improve justice by getting around weak or localised home-state legal systems.

The Insolvency Context: Collective Stakes and Public Interest

Insolvency drastically alters the nature of forum shopping. The goal of collective insolvency proceedings is to preserve and allocate value for the benefit of all creditors. Time is of the essence; delays brought on by forum disputes may result in irreparable value loss. Public policy is also impacted by insolvency law, which touches on issues like financial system stability, employee rights, and tax enforcement.⁵⁶ Often referred to as “insolvency tourism,” opportunistic forum selection in bankruptcy has proven particularly harmful. In order to stop this practice, the UNCITRAL Model Law and the EU Insolvency Regulation adopted the Centre of Main Interests (COMI) standard. When determining the jurisdiction for “main proceedings,” COMI is the deciding factor.⁵⁷ However, it has become susceptible to manipulation due to its dependence on post hoc factual analysis, such as the location of the debtor’s primary business or management functions. Just before trouble arises, debtors with legal acumen and foresight can reorganise their business, moving board meetings, changing bank accounts, or moving headquarters. After that, COMI is weaponised during the recognition stage to gain jurisdictional advantage, and courts are asked to evaluate it during hurried preliminary hearings.

Why COMI Fails to Contain Opportunistic Behaviour

Inconsistent regulations across jurisdictions exacerbate the shortcomings of the COMI standard. According to the “timing-of-determination” rule set forth in In re Fairfield Sentry, U.S. courts determine COMI “at or near the time of ling” of the Chapter 15 petition under Chapter 15 of the Bankruptcy Code. ⁵⁸ The EU Regulation, on the other hand, looks back three months before proceedings begin.⁵⁹ Instead of preventing COMI shifts after ling, the U.S. rule promotes strategic forum engineering right before ling. In re Bear Stearns, for instance, the court upheld the need for substantive presence by refusing Chapter 15 recognition to Cayman-registered funds that did not have actual business activity in the Caymans. Even though the debtor’s economic activity was located elsewhere, the court in In re Ocean Rig accepted the Cayman Islands as COMI based on the location of the restructuring administration.⁶⁰ These erratic results demonstrate that COMI is still subject to manipulation and unpredictability. Courts in the U.S. rarely refuse recognition, even when manipulation is clearly present. The public policy exception under §1506 of Chapter 15 is interpreted narrowly. The Second Circuit clarified in Fairfield Sentry that denial of recognition would only be justified in cases of “manifestly contrary” public policy violations. Since then, courts have deferred to foreign proceedings as long as they adhere to the minimal requirements of due process, even if they favour insider-favourable restructuring plans or disadvantage particular creditor classes. Furthermore, COMI’s ex post nature exacerbates the issue because it is decided by the court only after proceedings have started. When creditors are mobilised, restructuring plans are underway, and estate assets are already in jeopardy, recognition hearings take place. Therefore, before judicial scrutiny catches up, the tone of the case can be set by the tactical forum selection.

A Functional and Regulatory Diagnosis

The best way to describe forum shopping in bankruptcy is as a negotiation over which
restructuring laws will be applied in a given jurisdiction. The regulatory structures of the debtor and creditor states are also involved, in addition to private creditors. A Singaporean pre-pack may supersede moratorium regulations in another jurisdiction; an English scheme may lower the thresholds for creditor consent required by civil law; and a U.S. Chapter 11 ling may supersede employee protections in the debtor’s home state.⁶¹ Forum shopping in insolvency is more than just an efficiency issue because of its dual function as both an optimisation strategy and a regulatory arbitrage. It turns into a matter of governance. Therefore, courts cannot ignore the redistribution of rights and regulatory burdens resulting from forum choice.

The Need for Structural Reform

The discussion should focus on how to regulate forum shopping rather than whether it should be permitted at all. A complete ban on pre-insolvency forum planning runs the risk of suppressing legal restructuring efforts. However, it has turned out that passive judicial supervision based on flexible factual tests, such as COMI, is inadequate. The structural and procedural approach is superior. Temporal restrictions on COMI shifts have been imposed by jurisdictions like the EU and India; these restrictions are usually tied to the date on which the foreign proceeding was initiated.⁶² However, these still rely on post-event litigation. A regulatory pre-approval framework would be a more reliable option, requiring the forum selection to be thoroughly examined beforehand and supported by unbiased economic data. The advantages of forum shopping, like judicial expertise or regulatory competition, would not be suppressed by this model, which is covered in the next chapter. Rather, it would direct them towards independently verifiable ex ante commitments. In a system as structurally open as international insolvency, this is the only way to match public interest with private incentives.

Reforming COMI – A Balanced Regulatory Framework for Transnational Insolvency Forum Selection

As the jurisdictional cornerstone of significant cross-border insolvency frameworks such as the EU Insolvency Regulation (Recast), the Centre of Main Interests (COMI) and the UNCITRAL Model Law on Cross-Border Insolvency, which was essentially created to prevent forum shopping and create predictability. However, its actual use has revealed serious flaws, creating expensive legal ambiguity and unintentionally promoting cunning debtor tactics.⁶³ Inconsistent results across jurisdictions and favourable conditions for opportunistic changes on the eve of insolvency are caused by the judicial evaluations of concepts such as “head office functions” or “ascertainability to third parties,” which are inherently fact-specific and retrospective.⁶⁴ Although COMI’s primary goals of preventing abuse and maintaining jurisdictional legitimacy are still crucial, this chapter argues that the organisation’s current operational procedures fall short in distinguishing between forum shopping’s detrimental and potentially advantageous forms. We offer a new regulatory pre-approval framework that builds on the groundbreaking work of Casey, Gurrea-Martínez, and Rasmussen regarding the “Commitment Rule” while incorporating crucial changes to address its shortcomings. While firmly halting the abusive practices that jeopardise creditor equality and the systemic integrity of insolvency proceedings, this model seeks to maintain the justifiable advantages of corporate mobility and strategic forum selection. The prevalent criticisms of forum shopping usually present it as a monolithic, abusive practice that needs to be stopped. However, this viewpoint ignores the complex and occasionally moral role that forum selection can play in promoting regulatory coherence and reducing systemic injustices.⁶⁵ Pamela Bookman makes a strong case for the “unsung virtues” of forum shopping, noting that it allows parties from jurisdictions with issues with judicial independence, procedural fairness, or remedial capacity to look for effective redress elsewhere. In Shady Grove Orthopaedic Assocs. v. Allstate Ins. Co., the U.S. Supreme Court implicitly recognised this dynamic by acknowledging how the procedural rules of one forum can make it easier to access justice that is denied in another.⁶⁶ Maximilian Schrems’s calculated migration of Facebook data privacy complaints serves as a potent example. By moving his claims from Ireland to Austria, Schrems eventually led to historic decisions by the Court of Justice of the European Union (Maximilian Schrems v. Facebook Ireland Limited), showing how the choice of a transnational forum can further public-interest objectives by igniting authoritative supranational clarifications that strengthen regulatory frameworks.⁶⁷ In a similar vein, the consolidation of claims in forums that provide strong collective redressal mechanisms, which are frequently unavailable in lesser developed jurisdictions, significantly improves access to justice, directly addressing widespread remedial shortcomings such as, improving accountability, fairness, and systemic innovation, or it can be harmful, purposefully warping insolvency hierarchies to favour particular stakeholders.⁶⁸ The key issue is how to differentiate between these groups, which is made extremely challenging by the lack of a generally recognised, impartial measure for “insolvency fairness.”⁶⁹ Therefore, attempts to outright ban all pre-insolvency forum planning run the risk of stifling cross-border investment and legal corporate restructuring initiatives that are essential for effective capital allocation.⁷⁰ Overly strict regulations may unintentionally “chill” beneficial corporate mobility, impeding innovation in rescue finance and effective corporate evolution, as Casey, Gurrea-Martínez, and Rasmussen rightly warn.⁷¹ Therefore, a revised jurisdictional framework must carefully balance the need for restraint with the need for flexibility, specifically focusing on those strategies that are clearly intended to undermine substantive rights and procedural justice.⁷²

From Commitment Rule to Regulatory Pre-Approval: One Step Further Toward Disciplined Forum Choice

The well-known argument that any ex-ante screening of jurisdiction will “chill” legitimate forum planning is refuted by the regulatory pre-approval model described in this paper. The schema is purposefully set up to discourage only vexatious or malacious maneuvers, those carried out on the eve of insolvency with the express intent of reducing the remedial menu available to dissenting creditors, rather than restricting corporate mobility. On the other hand, a debtor who wants to base its restructuring in a forum whose rules it finds appealing for tax, governance, or transactional reasons will still have that freedom as long as the decision is made early, supported by solid economic evidence, and open to a limited, transparent review. A warning by Casey, Gurrea-Martínez, and Rasmussen that excessively strict jurisdictional locks may hinder effective reorganisation financing and penalise true corporate evolution is satisfied by this calibration. The value of a two-tiered dialogue between independent oversight and debtor initiative is at the core of the proposal. Similar to the “commitment” reasoning first put forth by Casey et al., a solvent company may still choose the forum for any future restructuring; however, this designation is submitted to a specialised regulator (such as the Monetary Authority of Singapore or an SEC-style division in the US) rather than being recorded in the company minute book.

The location of senior management, the jurisdiction in which principal assets and revenues are booked, the centre of treasury operations, and the geographic distribution of employees and creditors are among the best-practice indicators listed in recital 30 of the EU Insolvency Regulation that are tracked by the regulator using an economic-substance matrix. The “Zipmex loophole,” which permits a platform to evoke a head office by renting co-working space for a month, is closed when digital economy firms are involved because the matrix is specifically expanded to capture the locations of user accounts, data processing facilities, and intellectual property licensing.⁷³ The second pillar is transparency. All material creditor classes, including secured lenders, trade creditors, bondholders, and employee representatives, must be notified by the agency upon receipt of the forum-choice statement. Within a brief timeframe (suggested: 28 days), those stakeholders are encouraged, but not required, to submit comments or objections. The information asymmetry that currently hinders dispersed creditors under Chapter 15, where the onus probandi rests on outsiders to refute the registered-office presumption, is lessened by this process. The evidentiary burden moves from creditors to the debtor due to the regulator’s subpoena-like powers, which allow them to demand ledgers, board minutes, or server-location contracts. This resolves what U.S. judges have referred to as the “asymmetry of access” in COMI litigation.⁷⁴ Teeth are then supplied by a temporal safe harbour. Any attempt to switch forums within ninety days of an anticipated ling is presumed to be invalid, based on the three-month look-back outlined in Article 3(1) of the Recast Regulation.⁷⁵ Although the debtor may still challenge this presumption—for example, through mergers, expropriations, or legitimate headquarters relocations—the burden is significant and must be met with evidence that is current, not after the fact. The model expedites decision-making and circumvents the last-minute evidentiary scrambles that typified Bear Stearns, SPhinX, and, more recently, Re Hellas Telecommunications and Re Codere Finance in England by transferring the burden-shifting device into an administrative rather than judicial domain.⁷⁶

The agency’s decision is nal once it is made, with the exception of one expedited appeal that must be filed within thirty days in the incorporation state’s courts. Beyond that, there are no certiorari gambits, interlocutory stays, or iterative appeals. The limited-appeal structure of Singapore’s PT MNC Investama decision is modelled after the one-shot nal-order doctrine of 158(d) in U.S. bankruptcy practice.⁷⁷ Further lowering litigation costs, appellate courts do not need (and cannot) duplicate a global COMI inquiry from scratch because the standard of review is limited to “manifest error” in the agency’s economic-substance finding. The framework also establishes a reciprocity default, which reproduces § 1506 of Chapter 15 but applies to outbound rather than inbound recognition. Once a forum choice has passed domestic regulatory scrutiny, it enjoys a rebuttable presumption of validity abroad, to be denied only for “manifest and fundamental” conflicts with local public policy. This tool addresses the mutual-trust issues that fuelled Eurofood and the more recent Ocean Rig recognition dispute in the Southern District of New York, while also nudging courts towards modified universalism without requiring them to uphold blatantly abusive selections.⁷⁸

When combined, these mechanisms eliminate every doctrinal weakness mentioned in Part II. The U.S. timing window closes because a forum must be locked in well in advance of the insolvency emergency; the enterprise-group fragmentation issue subsides as conglomerates receive a single regulatory ruling that may validate a consolidated forum where economic reality demands it; the uniform three-month look-back normalises the Singaporean date-of-application variance; the digital economy’s plasticity is addressed by specifically weighting data-centric indicators; and the evidentiary asymmetry tilts back towards parity through agency discovery powers. Although there are still some restrictions, such as the need to fund resource-poor regulators and the inability to legally enforce cross-border deference, the overall result is a significant decrease in tactical incentives.79 Normatively, the model avoids the chilling effect that Mevorach is concerned about while striking the triad that Bookman praised: procedural economy, flexibility, and predictability.80 Because the governing forum is known, vetted, and publicly recorded, creditors are able to price contracts ex ante. Debtors have flexibility because, subject to the anti-gaming look-back, they can request re-validation whenever a real business change takes place. Because forum battles move from the courthouse steps during liquidity crises to a time of corporate calm when asset value is not evaporating and evidentiary records are intact, the procedural economy improves.38 Furthermore, the framework advances the distributive-equity concerns that drive Westbrook’s criticism of opportunistic relocations by providing scattered creditors with an early voice.81 Lastly, the architecture honours judicial discretion rather than replacing it. In addition to maintaining final authority over ancillary relief like the enforcement of judgements or the recognition of stays, courts continue to monitor the agency against arbitrariness. What changes is that those decisions are now made on an administrative dossier created under solvency conditions rather than on truncated affidavits put together at midnight. International insolvency law must transition from reactive litigation to proactive governance in order to reconcile the unavoidable plurality of legal regimes with the collective nature of creditor remedies. A practical compromise is provided by the regulatory pre-approval framework, which firmly prohibits abusive migrations while maintaining the possibility of value-enhancing forum selection.

Conclusion

COMI was designed as a neutral compass for cross- order insolvency; in practice, its soft edges have become a roadmap for jurisdictional arbitrage. The United States’ “time-of-petition” snapshot,
Singapore’s date-of- recognition benchmark, and India’s still-nascent draft framework each leave different, but equally exploitable gaps. The result is a race among debtors to secure the forum that promises the lightest procedural scrutiny or the friendliest restructuring tools, while creditors chase assets across borders and courts struggle to coordinate on the fly. A principled response must therefore shift the debate from where a case happens to how the forum was chosen. The regulatory pre-approval scheme proposed here, combining an ex-ante economic-substance audit, creditor notice, a short look-back bar on “midnight” relocations, and streamlined judicial review offers that pivot. It preserves legitimate forum planning, rewards early, transparent decision-making, and deters last-minute gamesmanship that saps estates and subverts collective bargaining. If adopted in tandem by leading restructuring hubs, the model would move cross-border insolvency from reactive litigation toward proactive governance, realigning corporate mobility with the core insolvency values of predictability, fairness, and value maximisation.

Footnotes

UNCITRAL, Model Law on Cross-Border Insolvency with Guide to Enactment and Interpretation, U.N. Doc. A/52/17, Annex I (1997), art. 16(3).
Bob Wessels, The Place Where the Debtor Has Its Centre of Main Interests (COMI): A Narrative, 28 Int’l Insolv. Rev. 3 (2019), at 10–15.
Horst Eidenmüller, Free Choice in International Company Insolvency Law in Europe, 6 Eur. Bus. Org. L. Rev. 423, 431–34 (2005).
Case C-341/04, Eurofood IFSC Ltd., ECLI:EU:C:2006:281.
Antony Gibbs & Sons v La Société Industrielle et Commerciale des Métaux (1890) 25 QBD 399 (CA).
Jay L. Westbrook, Locating the Eye of the Financial Storm, 32 Brook. J. Int’l L. 1019, 1032–36 (2007); Irit Mevorach, The Future of Cross-Border Insolvency: Overcoming Biases and Closing Gaps (Oxford Univ. Press, 2018), at 92–102.
Jet Airways (India) Ltd. v State Bank of India [2020] SCC OnLine NCLAT 347.
Re Opti-Medix Ltd. [2016] SGHC 108.
Supra Note 5.
Adrian Walters, “Modified Universalism and the Role of Public Policy in English Cross-Border Insolvency” (2017) 46 Common Law World Review 255, at 260–63.
Jay L. Westbrook, Locating the Eye of the Financial Storm, 32 Brook. J. Int’l L. 1019, 1035–38 (2007).
Irit Mevorach, The Future of Cross-Border Insolvency: Overcoming Biases and Closing Gaps (OUP, 2018), ch. 5.
Supra Note 7.
Supra Note 8; see also Aurelio Gurrea-Martínez, “Building an Attractive Insolvency Framework for a Global Restructuring Hub: The Case of Singapore” (2018) 29 International Company and Commercial Law Review 67.
CBIRC Report, Ministry of Corporate Affairs, India (2020), Part III.
Supra Note 8.
In re SPhinX, Ltd., 351 B.R. 103 (Bankr. S.D.N.Y. 2006); In re Bear Stearns, 374 B.R. 122 (Bankr. S.D.N.Y. 2007)
Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on Insolvency Proceedings (Recast), 2015 O.J. (L 141) 19, art. 3(1) [hereinafter EU Insolvency Regulation].
In re Fairfield Sentry Ltd., 714 F.3d 127 (2d Cir. 2013).
In re Modern Land (China) Co., Ltd., Case No. 22-10707 (Bankr. S.D.N.Y. 2022)
In re Ocean Rig UDW Inc., 570 B.R. 687 (Bankr. S.D.N.Y. 2017).
Look Chan Ho, “The Principle of Certainty and the COMI Test,” 10 J. Priv. Int’l L. 459 (2014).
CBIRC Report (2020), Part Z Recommendations.
Jay L. Westbrook, “Chapter 15 at Last,” 79 Am. Bankr. L.J. 713 (2005).
Re PT Garuda Indonesia (Persero) Tbk, [2021] SGHC 67.
CBIRC Report, supra note 1, Chapter V.
Jay L. Westbrook, “Chapter 15 at Last,” 79 Am. Bankr. L.J. 713 (2005).
John J. Chung, “The Retrogressive Flaw of Chapter 15: A Lesson from Maritime Law,” 20 Cardozo J. Int’l & Comp. L. 291 (2012).
Jay L. Westbrook, Locating the Eye of the Financial Storm, 32 Brook. J. Int’l L. 1019, 1025-30 (2007); Bob Wessels, The Place Where the Debtor Has Its Centre of Main Interests (COMI): A Narrative, 28 Int’l Insolv. Rev. 3, 10-15 (2019).
Irit Mevorach, The Future of Cross-Border Insolvency: Overcoming Biases and Closing Gaps 92-95 (Oxford Univ. Press 2018); John A.E. Pottow, Greed and Pride in International Bankruptcy: The Problems of and Proposed Solutions to “Local Interests”, 64 Emory L.J. 1449, 1470-75 (2015).
Supra Note 29 at 1038-40; Lynn M. LoPucki, Courting Failure: How Competition for Big Cases Is Corrupting the Bankruptcy Courts 45-60 (Univ. of Mich. Press 2005).
Anthony J. Casey, Aurelio Gurrea-Martínez & Robert K. Rasmussen, The Commitment Rule: A Model for International Insolvency Law 15-30 (Univ. of Chi. Coase-Sandor Inst. for Law & Econ. Working Paper No. 982, 2023) at 28.
Supra Note 29 at 1038-40; Cf. Fed. R. Bankr. P. 8002(a); Am. Bankr. Inst. Comm’n on Chapter 11, Final Report 19-25 (2014).
Supra Note 32; Horst Eidenmüller, 6 Eur. Bus. Org. L. Rev. 423, 435-40 (2005).
Casey, Gurrea-Martínez & Rasmussen, Supra note 31, at 28; LoPucki, Supra note 32, at 75-85.
Supra Note 30 at 92-95; John A.E. Pottow, 64 Emory L.J. 1449, 1470-75 (2015).
Supra note 29; Supra Note 31.
Supra note 29; Supra Note 31.
Supra Note 32
Id. at 10, 22.
Cf. EU Insolvency Regulation, supra note 1, recital 31; Case C-341/04, Eurofood IFSC Ltd. (CJEU 2006).
Supra Note 32 at 10-15.
Supra Note 30.
Supra Note 32.
Supra Note 29.
Id
Pamela K. Bookman, The Unsung Virtues of Global Forum Shopping, 92 Notre Dame L. Rev. 579, 584-95 (2016); Supra Note 31.
Supra Note 29; Supra Note 33.
Supra Note 32.
Whytock, C. A., The Evolving Forum Shopping System, 96 Cornell L. Rev. 481 (2011).
Juenger, F. K., Forum Shopping, Domestic and International, 63 Tul. L. Rev. 553, 554 (1989).
See The Abidin Daver [1984] AC 398 (HL).
Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981).
Supra Note 47.
Case C-498/16, Maximilian Schrems v. Facebook Ireland Ltd., ECLI:EU:C:2018:37 (CJEU Jan. 25, 2018).
Supra Note 47.
Regulation (EU) 2015/848, art. 3(1), O.J. (L 141) 19 (2015).
In re Fairfield Sentry Ltd., 714 F.3d 127 (2d Cir. 2013).
Id.; see also Eurofood IFSC Ltd., Case C-341/04,ECLI:EU:C:2006:281
In re Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd., 374 B.R. 122 (Bankr. S.D.N.Y.2007).
In re Ocean Rig UDW Inc., 570 B.R. 687 (Bankr. S.D.N.Y. 2017), aff’d, 585 B.R. 31 (S.D.N.Y. 2018).
11 U.S.C. § 1506; see Fairfield Sentry, 714 F.3d at 139.
Supra Note 29.
Westbrook,at 1032-35; Look Chan Ho, The Principle of Certainty and the Centre of Main Interests, 10 J. Priv. Int’l L. 459, 470-75 (2014).
66 Shady Grove Orthopedic Assocs. v. Allstate Ins. Co., 559 U.S. 393, 408-10 (2010) (Stevens, J., concurring).

67 Supra Note 55.

68 Supra Note 30.

69 Id. At 92-95; and at 1470-75.

70 Supra Note 32 at 25-30 ; Supra Note 3 at 435-40.

71 Supra Note 32.

72 Supra Note 30 at 155-60.

73 Supra Note 32; Bob Wessels & Stephan Madaus, Rescue of Business in Insolvency Law § 2.04 (European Law Institute Instrument 2020).

74 Supra Note 32, Hon. Martin Glenn, Cross-Border Insolvency after Fairfield Sentry, 92 Am. Bankr. L.J. 1, 9-12 (2018).

75 Supra Note 18.

76 Re Hellas Telecommunications (Luxembourg) II SCA [2010] EWHC 3199 (Ch); Re Codere Finance (UK) Ltd. [2015] EWHC 3778 (Ch).

77 Re PT MNC Investama TBK [2020] SGHC 149.

78 Supra Note 4; Supra Note 21.

79 Lynn M. LoPucki, Global and Out-of-Court: The Role of Regulators in the Next Generation of Cross-Border Insolvencies, 100 Cornell L. Rev. 647, 684-90 (2015)

80 Supra Note 30; Supra Note 32.

81 Supra Note at 1040-42.

K.V. Mahitha is an Independent Researcher

Originally submitted in response to the Call for Papers 2024, this paper was selected by the ILA Chair of the Emerging Scholars Group for publication as part of the Call for Papers 2024 initiative. The authors were also invited to present their work at the ILA 3rd Annual Conference, held at the Tijara Fort Palace, Rajasthan, India, from 14–16 March 2025. This publication represents the original and exclusive version of the paper, which has not been published elsewhere

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