2 . 5 . R E C O G N I T I O N A N D I T S EFFECTS
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Under the Model Law foreign proceedings are recognised as either 'foreign main
proceedings' or 'foreign non-main proceedings'. The main significance of this distinction
lies in the fact that only foreign main proceedings have automatic -ipso iurceffects
in the state of recognition. The distinction between main and non-main is based
on an appreciation of the jurisdictional grounds on which such proceedings are
commenced. A 'foreign main proceeding' takes place in the state where the debtor has
the centre of his/her main interests; a 'foreign non-main proceeding', on the other
hand, takes place in a different jurisdiction, where the debtor has an establishment.""'
An 'establishment' in turn is defined as 'any place where the debtor carries out a nontransitory
economic activity with human means and goods or services'.1" It should
be noted that the Model law does not in any way prohibit the opening of proceedings
based on the presence of assets alone. However, as such proceedings fail to qualify as
either main or non-main proceedings, they are not eligible for recognition under the
Model Law. This does not however mean that such proceedings are not covered by
the Model Law. Any'foreign proceeding', irrespective of the basis on which the foreign
court assumes jurisdiction, comes within the scope of t he Model Law, and courts and
representatives remain subject to the general duty of co-operation and co-ordination
of concurrent proceedings.1"
As set out above, the Model Law's provisions regarding recognition may be viewed
as specific forms of the over-arching duty of co-operation. Assistance and relief, which
are the tangible outcomes of co-operation, are specifically provided for in the case of
recognition of a foreign proceeding, while automatic and mandatory relief is only
envisaged in case of the recognition of foreign main proceedings. Nevertheless, these situations are embedded within the general duty of"co-operation, which also covers
situations involving proceedings not eligible for recognition.