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*PIL Case Law

Published on February 16th, 2018 | by efi kloyeri

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Summary: CJEU C-649/16, Reg.1215/2012, Action for liability in tort against the members of a committee of creditors

Key-words: Judicial cooperation in civil matters — Regulation (EU) No 1215/2012 — Scope — Action for liability in tort against the members of a committee of creditors which rejected a restructuring plan in insolvency proceedings

Case Number: C‑649/16

Court of Justice of the European Union

 Eftihia-Angie Klogkiri

 A) The facts in the main proceedings and the questioned reffered

The slovakian company VAV invest,whose assets are the subject of restructuring proceedings in Slovakia. Waldviertler Sparkasse Bank, Československá obchodná banka and Mesto Banská Bystrica have been appointed as members of the committee of creditors. VAV invest submitted a restructuring plan which was rejected by the committee without any comprehensible reasons, which led to the frustration of the restructuring proceedings and the liquidation of the assets of VAV invest in the ensuing winding-up proceedings. As a result of the rejection of the restructuring plan, Mr Valach and Mrs Valachová claimed to have suffered damage because of the significant loss of value of the shares they held in VAV invest and loss of profits as well as the project companies (SC Europa ZV II, SC Europa LV, VAV Parking, SC Europa BB and Byty A).

The applicants in the main proceedings brought an action for liability in the Landesgericht Krems an der Donau (Regional Court, Krems an der Donau, Austria), which was dismissed on the ground of lack of international jurisdiction. The applicants in the main proceedings appealed to the Oberlandesgericht Wien (Regional Court of Appeal, Vienna, Austria), which upheld the dismissal of the action on the ground of lack of international jurisdiction, in that the action falls within insolvency proceedings, as it concerns the failure of a statutory body under insolvency law to comply with its obligations for the benefit of the creditors as a whole. As an action related to insolvency proceedings, it is covered by the exception in Article 1(2)(b) of Regulation No 1215/2012. The applicants then appealed on a point of law to the Oberster Gerichtshof (Supreme Court, Austria), which court referred the following question:

“Is Article 1(2)(b) of Regulation … No 1215/2012 … to be interpreted as meaning that an action based on a claim for damages in tort against members of a committee of creditors because of their unlawful conduct in voting on a restructuring plan in insolvency proceedings, brought by the holders of shares in the insolvent company — as is the case of [Mr Valach and Mrs Valachová] — and by project companies in a business relationship with the insolvent company — as is the case of [SC Europa ZV II, SC Europa LV, VAV Parking, SC Europa BB and Byty A] — concerns insolvency within the meaning of Article 1(2)(b) of Regulation No 1215/2012 and is therefore excluded from the scope ratione materiae of that regulation?”

B) Legal Context

Article1(2)(b) of Regulation No 1215/2012 regarding the cases where the regulation does not apply as well as Article 3(1) of Council Regulation (EC) No 1346/2000 which refers to cases of insolvency proceedings.

C) Consideration of the questions referred

Firsty, the Court has held that Regulations No 1215/2012 and No 1346/2000 must be interpreted in such a way as to avoid any overlap between the rules of law that those instruments lay down and any legal vacuum. Accordingly, actions excluded under Article 1(2)(b) of Regulation No 1215/2012 from the application of that regulation because they come under ‘bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings’ fall within the scope of Regulation No 1346/2000. Correspondingly, actions which fall outside the scope of Article 3(1) of Regulation No 1346/2000 fall within the scope of Regulation No 1215/2012.

Furthermore, the court stated that only actions which derive directly from insolvency proceedings and are closely connected with them are excluded from the scope of Regulation No 1215/2012. In order to determine whether an action derives directly from insolvency proceedings, the decisive factor applied by the Court to identify the area within which an action falls is not the procedural context of the action but its legal basis.

In the present case, the action for liability was brought by holders of shares in the company which was the subject of the insolvency proceedings, and by companies in business relationships with that company. Moreover, the issue in the main proceedings is thus the direct and inseparable consequence of the performance by the committee of creditors, a statutory body established when insolvency proceedings are opened, of the task specifically assigned to them by the provisions of national law governing such procedures.

The court hereby ruled that:

Article 1(2)(b) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as meaning that it applies to an action for liability in tort brought against the members of a committee of creditors because of their conduct in voting on a restructuring plan in insolvency proceedings, and that such an action is therefore excluded from the scope ratione materiae of that regulation.

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