German Reference for a Preliminary Ruling – Delimitation between Brussels I Regulation and Insolvency Regulation


The German Federal Supreme Court (Bundesgerichtshof) has referred with decision of 21 June 2007 (IX ZR 39/06) the following questions to the European Court of Justice for a preliminary ruling:

On interpreting Article 3(1) of Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings and Article 1(2)(b) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, do the courts of the Member State within the territory of which insolvency proceedings regarding the debtor’s assets have been opened have international jurisdiction under Regulation (EC) No 1346/2000 in respect of an action in the context of the insolvency to set a transaction aside that is brought against a person whose registered office is in another Member State?

If the first question is to be answered in the negative:

Does an action in the context of the insolvency to set a transaction aside fall within Article 1(2)(b) of Regulation (EC) No 44/2001?

Jurisdiction with regard to proceedings which are closely connected with the insolvency proceedings themselves is highly contentious.

Since the Insolvency Regulation does not contain an explicit provision on this matter – even though referring to “judgments which are delivered directly on the basis of the insolvency proceedings and are closely connected with such proceedings” in Recital No. 6 – there are, briefly summarised, three different approaches: According to the first opinion jurisdiction has to be based on the Brussels I Regulation, according to a second approach it has to be referred to national law, while a third position suggests an analogous application of Art. 3 (1) Insolvency Regulation.

In the present case the Court of Appeal (Oberlandesgericht Frankfurt) favoured the first approach and held that Art. 1 (2) lit. b Brussels I Regulation had to be – in view of the Regulation’s goal to establish uniform rules in civil and commercial matters – interpreted narrowly and did therefore, as Art. 3 (1) Insolvency Regulation, only include collective insolvency proceedings, not however actions to set aside transactions in insolvency (Insolvenzanfechtungsklagen). Consequently the application of the Brussels I Regulation was not excluded, which led in the present case to the result that German courts lacked international jurisdiction.

This point of view is supported by some German legal writers who argue that Art. 1 (2) lit. b Brussels I Regulation had to be, at least since the entry into force of the Insolvency Regulation, construed more strictly. This, however, can be regarded as a departure from the previous case law of the ECJ (Gourdain v. Nadler) as well as the Bundesgerichtshof. In Gourdain v. Nadler, the ECJ held that Art. 1 (2) No. 2 Brussels Convention (which is identical with Art. 1 (2) lit. b Brussels Regulation) includes all proceedings which “derive directly from the bankruptcy or winding-up and [are] closely connected with the proceedings […].” The same view was taken by the Bundesgerichtshof in 1990 (judgment of 11 January 1990 – IX ZR 27/89, ZIP 1990, 246) by holding that avoidance proceedings by a trustee in bankruptcy are included by Art. 1 (2) No. 2 Brussels Convention and therefore excluded from the scope of the Convention.

Contrary to the Court of Appeal, the Bundesgerichtshof tends in the present case, in accordance with a widely held opinion in German literature, to apply Art. 3 (1) Insolvency Regulation and assumes therefore international jurisdiction of German courts in the present case. However, since the Bundesgerichtshof regards the question not to be unambiguous, it decided to refer the aforementioned questions to the ECJ.

The referring decision can be found at the website of the Bundesgerichtshof as well as in the following legal journals:
ZIP 2007, 1415 et seq.; DB 2007, 1693 et seq.; ZInsO 2007, 770 et seq.

An annotation by Lars Klöhn and Olaf Berner (both Göttingen) arguing in favour of an application of Regulation 44/2001 – and not 1346/2000 – can be found in ZIP 2007, 1418 et seq.

The case is pending at the ECJ as Rechtsanwalt Christopher Seagon als Insolvenzverwalter über das Vermögen der Frick Teppichboden Supermärkte GmbH v. Deko Marty Belgium N.V. (C-339/07).

1 reply
  1. Fiumanò Rocco says:

    In my opinion both of the approaches given by German Courts have to be excluded for the following reasons:
    At first it is necessary to look at the point of view of the Bundesgerichtshof.
    The application, in accordance with a recently held opinion in German literature( see LORENZ, Annexverfahren bei Internationalen Insolvenzen, 2005, Tübinger) of the art. 3 Reg. 1346/2000 and a consequent extensive interpretation of the law must be ruled out. In fact this approach cannot be supported because the art. 3, related to international jurisdiction, is clearly referred only to jurisdiction to open insolvency proceedings. The principle of the vis attractiva concursus must be excluded from this regulation. Someone presupposed also that this principle can be found in art. 25 Reg. 1346/2000 concerning the recognition and enforceability of other judgments, but also this thesis cannot be supported. In fact it is not possible to obtain rules on jurisdiction from those on recognition end enforcement. Than this solution would not be shared by Member States that do not have familiarity with the vis attractiva.
    Secondly we look at the point of view of the Court of Appeal.
    Bruxelles 1 cannot apply in this situation because the action in the context of the insolvency to set a transaction aside, according to Gourdain case law, is strictly connected with the insolvency proceeding.
    The solution given by ECJ in this case permit an autonomous interpretation of the law and it has been used as a precedent to define when a particular matter depends on insolvency.
    In my opinion the ECJ should reassess the question defining when a particular action even if taken during an insolvency proceeding depends from this proceeding or not. In fact the action object of this discussion can be taken ( with particular differences) also out of the insolvency proceeding as actio pauliana and in this situation the jurisdiction is defined according to art. 5.1 Reg. 44/2001.

    In conclusion it is necessary to apply the private international law of each Member State. This is the more plausible solution in the absence of a clear community law.

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