Insolvency 2025

PORTUGAL Law and Practice Contributed by: Manuel Magalhães, Mafalda Ferreira Santos, Francisco Boavida Salavessa and Maria José Lourenço, Sérvulo & Associados

6.3 Applicable Law Under both Regulation (EU) 2015/848 and the CIRE, the law applicable to insolvency proceedings and their effects will be that of the state within the territory of which such proceedings are opened, except where both regulations provide otherwise (eg, the law gov - erning the third parties’ rights in rem, set-off, and con - tracts relating to immovable property, among others). 6.4 Recognition and Enforceability The procedures provided by Portuguese law for the recognition of a declaration of insolvency and the enforceability of foreign judgments against the debtor vary according to whether the decision was issued within the EU or in a third country. Within the EU The effects of restructuring or insolvency proceedings opened in EU member states (excluding Denmark) and all related decisions adopted by member states’ courts are automatically recognised and enforceable in Portugal, and are not reviewed by the Portuguese courts, which means that the decision regarding the insolvency produces the same effects in Portugal as under the law of the state where the proceedings were opened (“principle of mutual trust”). In spite of this, it may be necessary to present a request in court for the purpose of registering a for - eign declaration of insolvency in the Portuguese Land Register and Insolvency Register. However, the aforementioned general rules do not apply in certain cases. Third Countries Decisions rendered in proceedings opened in third countries will be recognised in Portugal, after revi - sion and confirmation by a Portuguese court, and after verification that the foreign court’s/authority’s com - petence is based on the place where the debtor is domiciled or has its main interests, or an equivalent rule, and that the recognition will not bring about a result that offends the basic principles of Portuguese jurisdiction. This rule applies to insolvency declara - tions and all related decisions.

Secured creditors are paid out of the proceeds of the sale of the secured assets; they are able to purchase those assets, and are always consulted in the selling process. However, secured (or unsecured) creditors cannot prevent the insolvency administrator from liq - uidating the assets of the insolvent estate under the terms deemed most appropriate by the administrator. In the liquidation phase, it is difficult to block or frus - trate the proceedings, since the insolvency adminis - trator – despite having a duty to consult the secured creditors and having to seek the consent of the credi - tors’ committee to carry out particular relevant acts – has complete power to liquidate the debtor’s assets and pay the creditors as quickly as possible. The effects of the declaration of insolvency are main - tained throughout the proceedings, whether they are for approval of a plan or for liquidation. Thus, there is no automatic or discretionary suspension of enforce - ment proceedings nor of rights or liens, other than that provided for in the general terms already mentioned. 6. Cross-Border Issues in Insolvency 6.1 Sources of International Insolvency Law The Portuguese law applicable to cross-border insol - vencies varies according to whether the other country is: • within the EU, in which case Regulation (EU) 2015/848 of the European Parliament and of the Council, of 20 May 2015, on insolvency proceed - ings applies; or • a third country (outside the EU), in which case the CIRE applies. 6.2 Jurisdiction Under both Regulation (EU) 2015/848 and the CIRE, the place regarded as the centre of the debtor’s main interests is the criterion used to determine which country has jurisdiction to open the main restructur - ing or insolvency proceedings. This means that the competent court will be the court of the place where the debtor conducts the administration of its interests on a regular basis and which is ascertainable by third parties.

408 CHAMBERS.COM