Lis alibi pendens

January 9, 2018 | Author: Anonymous | Category: Social Science, Law
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International procedure  -

Overview of issues: Jurisdiction of courts (incl. issue of lis pendens) Service abroad Specific rules for cross-border disputes (incl. possible use of harmonised rules of procedure) Application of foreign law Taking evidence abroad Recognition and enforcement of foreign judgments or other instruments Insolvency procedures

International procedure sources Sources in general  National law on jurisdiction, service, procedure incl. evidence of facts and law, insolvency proceedings, recognition and enforcement  In part replaced by EU legislation (esp. Regulations)  Multilateral and bilateral conventions 



NB. For immunities of jurisdiction, see Ch. 1

Reasons for choice Why does it matter ? What do you pay attention to when choosing a forum ?  Proximity-familiarity of a party (or its lawyer) with the court > predictability at less costs  Procedural reasons: different rules of procedure, incl. rules on taking evidence, on confidentiality use of language, costs and distribution of costs : ‘American rule’ (each party its own costs) v. fee-shifting (eg ‘English rule’ loser pays all, mitigated since 2013, as in most continental countries) contingency fees ? Allowed in mist US states, forbidden in most continental systems, in E&W to some extent allowed. But conditional fee agreements or success fees usually allowed. trust in the judges, proximity of evidence (incl. presence of witnesses) trust in law firms 

Reasons for choice 

Why does it matter ? What do you pay attention to when choosing a forum ?



Substantive reasons: applicable rules of the lex fori, esp. those overruling choice of law (supermandatory rules) Court of the country of the applicable law will know that law better > more predictable « national » interpretation of foreign or uniform law Possible home bias (eg interpretation of conformity of goods) remedies courts in that country (can) grant (eg specific performance; injunctions; post-decision discovery of assets (eg NML/Argentina))

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Chances of recognition and enforcement abroad

International jurisdiction Domestic rules on international jurisdiction of national courts (in Belgium in Code of P.I.L.): - often rather wide jurisdiction, e.g. based also on *nationality of claimant * foreign defendant found in the country, *foreign defendant doing business in the country, etc.; - sometimes limited by « FNC » (forum non conveniens) - sometimes protected by anti-suit injunctions against proceedings abroad (eg Gallo Winery t. Andina, case in US against exorbitant jurisdiction rule in Ecuador) 

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Lis alibi pendens not always an exception or ground for suspension

International jurisdiction 

Domestic rules on international jurisdiction limited by:



International conventions (bilateral or multilateral) (no uniform interpretation authority) Hague Convention on Choice of Court Agreements 2005 (expected to enter into force for EU (without Denmark), Mexico and US) Hague Conference preliminary negotiations (2012) for a Judgments Convention CMR art. 31 International convenions establishing international or common courts (eg European patent Court, Benelux Court)

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EU-Regulations: next slide - uniform interpretation by ECJ



Lugano Convention 1988, revised 2007: EU-EFTA Convention (CH, N, Iceland) parallel to EU-Regulation 44/2001 (incl. an endeavour to interpret in conformity with identical rules in EU Regulation)

International jurisdiction - EU  -

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EU-Regulations: Civil and commercial matters in general: Reg. 1215/2012 (« Brussels-I bis (‘Recast’) (next slide) Separate Regulations on matrimonial matters and parental responsibility Brussels-II), maintenance obligations (alimony), on transnational successions (650/2012) Regulation on insolvency proceedings 1346/2000 (+ recast expected 2015) (s. further) Purpose of these rules: « Free movement of judgments », i.e. recognition and enforcement of judgments from other member states (in the USA: full faith and credit) To reach this, harmonisation of international jurisdiction is required

EU – Brussels I Reg - Scope EU-Regulations - Civil and commercial matters in general:  originally Brussels Convention 1968, still relevant for overseas territories of art. 355 TFEU:  until Jan. 10, 2015 Old Brussels-I-Reg. 44/2001.  Now Reg. 1215/2012 (« Brussels-I bis (‘Recast’)  Scope ratione materiae - excluded matters: family & succession (separate Regulations), social security, jurisdiction over arbitration Excluded is therefore also judging the validity of arbitration agreements: - jurisdiction rules left to national law; - no recognition on the basis of Brussels-I; - thus: a judgment not recognising an arbitration clause is not binding in other MS as to the arbitration clause) - proceedings ancillary to arbitration also outside Brussels-Ibis  Relationship with other courts common to some member states (EPC, Benelux Court) in art. 71a ff. 

EU – Brussels I Reg - Scope 

New Brussels-I-Regulation 1215/2012 (Old = 44/2001)



Scope of application ratione personae Regulates only procedures where a defendant is domiciled in a MS; otherwise: national procedural law applies (art. 6 (old 4.2)) (s. infra Hague Convention on Choice of Court Agreements)



Definition of domicile: - of natural persons: art. 62 (old 59)) > national law (not autonomous) (> national law (unless another Treaty applies, see next slide on Hague Convention)  National restrictions thus apply, esp. in case of overriding mandatory provisions of substantive law (e.g. Agency, Distributorship) (See also the same question as to arbitration clauses) Explicit provisions in e.g. Belgian law: Belgian Courts always competent for cases of termination of commercial agency or distributorship 2 Possible approaches: either ex ante rejection of the choice of court if the foreign court is not obliged to apply the mandatory provisions, or ex post non-recognition if the foreign court has not done so (+ stay domestic case on the basis of recognition prognosis) BGH 30 Jan 1961; recently BGH 5 Sep 2012, Virginia agency case: ex ante rejection. Although American Courts would probably apply German law on the basis of the comparative impairment doctrine (§ 187(2) US restatement 2nd of Conflict of Laws) English High Court in Accentuate Ltd v Asgira: idem (arbitration clause) 

Choice of court – Hague C 

Choice of Court Agreements – Hague Convention 2005 (not in force yet, ratified by Mexico, ratified by EU (w/o Denmark) 4 Dec 2014, signed by US*):



Art. 1: defines « international cases » Art. 2: outside scope of application: consumer cases, labour cases, family law, successions, insolvency, competition, most tort cases, property in land, legal persons, most intellectual property cases, etc. Art. 3 requirements: a) where the agreement indicates a Court of a contracting state b) formal requirements (in writing or by any other means of communication that renders information accessible so as to be usable for subsequent reference)





* The ULC (uniform law commission) has already approved the Uniform Implementation Act

Choice of court – Hague C 

Choice of Court Agreements Hague Convention 2005 - effects

Art. 5: Chosen court* must hear the case, unless it finds the agreement invalid; Art. 5: validity under the law of the chosen court * More precisely: chosen court system (state basis) (transfer to other court of same state system remains possible)  Any not-named court must decline jurisdiction (unless named court has declined) 



Convention does not govern interim measures (art. 7)



Recognition and enforcement may only be refused on the grounds of art. 9 (i.a. art. 11 punitive damages, cfr. existing case law in Germany, France, Italy)

Brussels-I general rules 

Grounds for jurisdiction (cont.)



Basic rule: domicile of the defendant (rule against forum actoris) (Art. 4, old 2)



Art. 8.1 (old 6.1.) Plurality of defendants if closely linked (requirement of reasonable foreseeability in ECJ C-145/10 Painer, (violation of privacy by media), taken over in Recast 1215/2012) (but for defendants outside EU, national law determines this) Art. 8.3 (old 6.3): Counterclaims: same court Art. 8.2 (old 6.2): Third party intervention: possible in same court

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Brussels-I provisional measures Provisional

measures: art. 35 (old 31)

-may

be demanded in the country where they can/must be performed/enforced -condition is that they are provisional - restrictive interpretation of « provisional measure »: only « conservatory measures » (ECJ in C104/2003), incl. obtaining information or preserving evidence -Does not include eg ordering the hearing of a witness (but a court has jurisdiction for such measures if asked by the court having jurisdiction over substance, see further Reg. 1206/2011 on evidence) -Territorial

scope: see infra recognition/enforcement

Alternative jurisdiction: contracts

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Brussels-I-Regulation – grounds for jurisdiction (contracts) Alternative grounds on which claimant can base jurisdiction: art. 7.1.a. (old 5.1.a) claim based on a contractual obligation and other ‘matters related to a contract’:

place of performance of the obligation (as determined by the substantive law applicable to the obligation) (secondary obligations follow the principal obligation)  Contractual obligation includes tort claims where the conduct complained of may be considered breach of contract terms (C-548/12, Brogsitter) 



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art. 7.1.b (old 5.1.b) in sales and service contracts > a more specific and autonomous rule: place of delivery c.q. provision of service or place where should have been delivered/provided. To be determined by interpreting the contract, taking into account also « including terms and clauses which are generally recognised and applied through the usages of international trade or commerce, such as the Incoterms » (C-87/10 Electrosteel). If that does not help, place of factual delivery (C-381/08 Car Trim)

Alternative jurisdiction: torts Brussels-I-Regulation –Alternative grounds on which claimant can base jurisdiction – tort:  Art. 7.2 (old 5.3) Claim based on a non-contractual obligation from tort: place where the harmful event occurred. In general, this can be the place where the event was caused (locus acti) or where the damage occurs (locus damni) (C-21/76 Bier /Mines de Potasse). For a defective product: where it is produced or where damage is caused, not where it is merely marketed C-45/13 Kainz) Also possible for negative declarations on liability in tort (C-133/11 Folien Fischer) > incentive for defendant to go to court first For damage to personality rights worldwide: full jurisdiction for country where act is committed and country of centre of main interest of damaged person; partial jurisdiction for other countries where damage is caused (C509/09 eDate advertising) Damage to personality rights by press (C-68/93, Shevill) or damage to IP rights (including on internet) (C-523/10 Wintersteiger; C-441/13 Hejduk): full jurisdiction for country where act is committed; partial jurisdiction for other countries where damage was caused. 

Alternative jurisdiction other Brussels-I-Regulation – grounds for jurisdiction  Alternative grounds on which claimant can base jurisdiction:  7.5. (old 5.5) Disputes arising out of the operations of a branch, agency or other establishment: its location  10-16 (old 8-14) Insurance contracts litigation  17-19 (old 15-17) Consumer contracts litigation in 3 cases - (a) a contract for the sale of goods on instalment credit terms; - (b) a contract for a loan repayable by instalments, or for any other form of credit, made to finance the sale of goods; or - (c) the contract has been concluded with a person who pursues commercial or professional activities in the MS of the consumer's domicile or, by any means, directs such activities to that MS or to several States including that MS (NB. no requirement that contract is concluded as distance contract: C-190/11 Mühlleitner / Autohaus Yusufi)  20-23 (old 18-21) Labour contracts litigation 

Alternative jurisdiction: general  -

Restrictive interpretation of alternative grounds eg succeeding party such as assignee*, subrogated party** cannot use the alternative jurisdiction (except when it personally meets the requirements)

* C-89/91 Shearson Lehman Hutton • ** C-347/08 Vorarlberger Gebietskrankenkasse •

Lis alibi pendens in EU 

Brussels-I-Regulation – further rules on jurisdiction



Lis alibi pendens in other MS (art. 29, old 27) – Scope of

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application: same claim (same cause of action) between same parties** already* before another court

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* Date of seizure autonomously defined (art. 32, old 30): claim filed at court or claim received by the servicing authority (see further the rules on servicing abroad)

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** C-452/12 Nipponkoa: where there a claim for a declaration of non-liability is already pending, a recourse by the insurer of the defendant who has paid a third party falls within the scope of lis pendens.

Lis alibi pendens in EU 

Brussels-I-Regulation – further rules on jurisdiction



Lis alibi pendens in other MS (art. 29, old 27) - Effects:

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Old regulation: later court must suspend/stay proceedings until court first seised has decided (and must decline jurisdiction if first court decides it has jurisdiction). First court has Kompetenzkompetenz (even on the question whether there is a choice for court agreement naming another court) (ECJ C-116/02, Gasser). This is not the case when the court seised later has exclusive jurisdiction on the basis of Ch. II. S. 3 (insurance), 4 (consumer) or art. 24 (old 22) (ECJ C-438/12 Weber/Weber) New rule in Brussels Ibis art. 31.2: where another court is seised on the basis of a choice of court agreement, that court has to decide first: named court has Kompetenzkompetenz

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Lis alibi pendens in EU 

Brussels-I-Regulation – further rules on jurisdiction



Lis alibi pendens and arbitration

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No suspension if there is arbitration agreement, even if arbitration proceedings already pending the wide exclusion of arbitration from the scope in the Recast (s. supra) also means that the fact that the validity of an arbitration agreement is already pending before one court not deprive other courts of jurisdiction !

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Lis alibi pendens extra EU 

Brussels-I-Regulation – further rules on jurisdiction



new in Recast 1215/2012 art. 33:



Lis alibi pendens in non-EU court : later EU court may suspend proceedings. Here the forum non conveniens doctrine is used.



Decision of non-EU Court with res iudicata: EU court will dismiss the proceedings if the non-EU judgment is capable of recognition (new art. 33.3)

Connex case pending 

Brussels-I-Regulation – further rules on jurisdiction



Connexity (connected or related cases): later court MAY suspend or refer the case (no obligation) (art. 30, old 28)



Connexity with case in non-EU court (new in Recast 1215/2012 art. 34)

US jurisdiction International jurisdiction of US Courts: mostly wide rules of jurisdiction but with many or wide exceptions  Grounds for jurisdiction: it is sufficient that there is a contact in personam or in rem with the state concerned - Jurisdiction in personam: very broadly formulated – mere presence of the defendant (domicile, citizenship, temporary presence, doing business) or consent of the defendant (choice of court agreement). Restricted by SCotUS in Daimler v Bauman (Jan 14, 2014): general jurisdiction only in home state of defendant; otherwise only specific jurisdiction for claims linked to the place Jurisdiction in rem: dispute over property in an asset situated in that state.  Exceptions / Limitations to jurisdiction: Choice of Court Agreement (widely accepted – SC 3 Dec 2013 in Atlantic Marine Construction) Defendant fraudulently lured into the jurisdiction (invited for dinner) Forum non conveniens (rarely accepted !, Gilbert case 1947) Lis alibi pendens: «first filed rule» 

UK jurisdiction 

International jurisdiction of English Courts outside Brussels I-bis > domestic law

Common law tradition: mostly wide rules of jurisdiction but with many or wide exceptions  Including wide jurisdiction in personam 

Servicing docs. abroad  

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Service abroad of judicial documents Hague Convention 1965 on the service abroad of judicial and extrajudicial documents in civil and commercial matters: crossborder service to a known address: can take place via the «central authorities» of the contracting states; a direct service abroad is possible in certain cases.



EU Regulation 1393/2007 on service between member states: next slide



Matters outside these Conventions/Regulations: regulated by domestic law (usually via bailiff + postal service)

Servicing docs. abroad 

EU Regulation 1393/2007 on service between member states:

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transmission via central authorities (art. 4 ff.) (standard forms); alternative forms in art. 12 ff; direct service by officials in the MS addressed if this is permitted by the law of that State (art. 15)

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C-473/04 Plumex: no hierarchy between these alternatives

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adressee may refuse to accept if neither in the official language of the place of destination nor in a language easily understood by defendant (art. 8)



Additional rules in specific regulations (eg Small Claims Regulation)

Cross-border procedures  

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National law may have specific rules of procedure for cross-border litigation (rare, except EU-Regulations mentioned infra) If such rules are restrictive, they may be set aside by EU law, e.g. the requirement of a Cautio iudicatum solvi for foreign claimants EU: proposals of the Storme-Commission 1994 Some largely uniform procedures for cross-border litigation introduced in the law of all EU member states: Small claims Regulation (Reg. 861/2007) Payment order Regulation (Reg. 1896/2006) New Regulation on attachment of bank accounts (“European Account Preservation Order”) Model law by ALI/Unidroit Principles of transnational civil procedure (Principles + Annex with “Rules”)

Applying foreign law What is the task of the judge when according to the conflict of law rule, foreign law must be applied ? -

Continental rule: curia novit ius, applies also to the foreign law indicated by the domestic conflict rule. Judge may obtain information according to the European Convention on Information on Foreign Law (London 1968) (not frequently used). More frequent: expert opinion on foreign law

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Anglo-American rule: foreign law is a matter of fact that must be proven (usually by expert opinion, esp. affidavit by qualified foreign lawyer)

Evidence - problems   -



Applicable law: rules on means of proof accepted for certain facts, eg contracts: the applicable substantive law rules on obtaining evidence: domestic procedural law (lex fori). Procedural law of evidence differs a lot, e.g. concerning discovery (actio ad exhibendum): continental rule: restricted to specific documents >< in USA: much broader («fishing expeditions»)

Means of proof especially relevant in international trade: expert examinations; certificates or reports of control/surveillance organisations, etc.

Evidence

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Taking evidence abroad Unilaterally: supposes voluntary compliance in some cases compliance is even forbidden (by « blocking statutes » or by a specific court order) except where information is exported on the basis of international conventions (as the Hague Convention, next slide) Eg French Law 80-538 of 16 July 1980 (originally reaction against american action against shipping cartels): communication of economic, commercial, industrial, financial or technical information is prohibited -- if capable of harming the sovereignty, security or essential economic interests of France or contravening public policy; -- if leading to establishment of proof in foreign legal proceedings. Eg Swiss Banking law (bank secrecy)

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That prohibition sometimes set aside by foreign court: -eg E&WC.A. 22 Oct 2013: recourse to the Evidence Regulation not necessary -SCotUS uses different tests to decide whether or no to respect the foreign statute and use the lex fori or the Hague Convention (SC 15 June 1987 in Aérospatiale v

US)

Evidence 

Taking evidence abroad

Rogatory Commissions sent abroad (for examination of witnesses, visit of a location abroad, etc.)  Hague Convention on Taking Evidence Abroad 1970 (in force 1972) - via a central authority in the requested state - or via personnel of the requesting state in the requested state in case of voluntary appearance of the requested persons - most states made a reservation for pre-trial discovery (based on art. 23 Convention) (even the UK made the reservation) 



EU-Regulation 1206/2001 on co-operation in taking of evidence: next slide

Evidence – EU Reg.  



EU-Regulation 1206/2001 on co-operation in taking of evidence demand directly adressed by «requesting court» to «requested court» in other member state; use of standard forms; subsidiary role of a central body in each member state. Directive only facilitates taking evidence, thus does not forbid any measure which can be taken without the cooperation of the other member state:

- C-170/11, Lippens e.a.: Court has the option, to summon a person residing in another Member State before it and hear him as a witness in accordance with the law of its Member State. - C-332/11 Prorail: entrusting to an expert a task of taking of evidence to be carried out in another Member State, can be done without this procedure, unless it affect the powers of the Member State in which it takes place, in particular where it is an investigation carried out in places connected to the exercise of such powers or in places to which access or other action is, under the law of the Member State in which the investigation is carried out, prohibited or restricted to certain persons.

Recognition & enforcement

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Deals with so-called « Title import » Within federal states: « Full faith and credit » Otherwise traditionally re-examination of the case in country where recognition / enforcement is asked, unless simplified by treaties Eg in Belgium simplified since 2004 (Code of PIL art. 25 § 1 abolishes re-examination and lists grounds for refusal) Eg in the UK: common law rules + Statutes 1920 & 1933 mainly dealing with commonweelth countries No global convention until now (only for Choice of Court Agreements (supra), including rules on recognition and enforcement) CMR art. 31 In the EU: certain judgments from courts of other EU states enjoy full faith and credit (automatically enforceable), for others under Reg. 44/2001 a simplified procedure of « exequatur », now abolished by Brussels-I Recast 1215/2012

Recognition & enforcement General framework: Brussels-I-Regulation (+ separate regulations in family, maintenance obligations, successions, insolvency, etc.)  Old rules: automatic recognition of judgments* / enforcement after obtaining an exequatur** on unilateral request with certain formalities (art. 41) (« title inspection ») * limited grounds for refusal in case of opposition/appeal (art. 34-35) - contrary to public policy (34.1) (interpreted restrictively by ECJ) - judgment in default and defendant not served in sufficient time (34.2) - incompatible with a judgment issued in the country of enforcement (34.3 & 4) - from a court having no jurisdiction in case of conflict with section 3,4 or 6 of Ch. II or in case of art. 72 (special conventions) (art. 35) - see also art. 61 (Recast 64 )(civil decision in criminal proceedings, defendant had no opportunity to arrange defence) * Q: is an English Scheme of Arrangement a judgment in the sense of art. 32 ? ** without re-examination or review of the merits (art. 53) NY Convention on arbitration takes precedence over the Regulation 

Recognition & enforcement    -

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General framework: Brussels-I-Regulation Old rules (44/2001): Automatic enforceability without exequatur in case of: European Enforcement order for uncontested claims (Reg. 805/2004) awarded in a procedure according to domestic law of a member state European Payment Orders (supra) Decisions in European Small Claims Procedures (supra)

Recognition & enforcement General framework: Brussels-I-Regulation  New rules (Recast 1215/2012):  automatic recognition and enforcement without obtaining an exequatur, on presentation of judgment + certificate with summary (and possibly translations). Enforcement requires prior serving of certificate to that person.  Same limited grounds for refusal in case of opposition/appeal : - contrary to public policy (45.1a) (interpreted restrictively by ECJ) - judgment in default and defendant not served in sufficient time (45.1b) - incompatible with a judgment issued in the country of enforcement (45.1c & d) - from a court having no jurisdiction (45.1e) - see also art. 64: civil decision in criminal proceedings, defendant had no opportunity to arrange defence 

NY Convention on arbitration takes precedence over the Regulation

Recognition & enforcement   -

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Automatic recognition and enforcement applies under the Recast 1215/2012 also to: Authentic instruments (as notarial deeds) (58.1) Court settlements (58.2) Extraterritorial effect of provisional measures: by court having jurisdiction over substance: measure enforceable in the EU (if unilateral procedure, then only after service of decision to the defendant) by court not having jurisdiction over substance: jurisdiction for protective measures (supra), but effect confined to territory of that MS

Insolvency proceedings  -

Types of insolvency proceedings usually found abroad: Liquidation proceedings, such as bankruptcy Reorganisation and composition proceedings, such as: * judiciary reorganisation, * collective agreement with creditors (suspension of the execution by creditors in order to reorganise the business)

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In all these proceedings the control over the assets of the debtor is granted to an administrator and the claims of the creditors are dealt with collectively (instead of individually)

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Not an « insolvency proceeding »: English ‘Scheme of Arrangement’ under part 26 Companies Act

Insolvency proceedings  -

International insolvency: two conflicting solutions / principles: universalism (single bankruptcy extended to all countries where debtor has assets) (eg Belgian law, US law) Moderate territorialism: insolvency proceedings in each country relate only to assets in that country. radical territorialism: insolvency proceedings in each country relating to assets in that country that are « ring-fenced »: the product is used first for debts incurred in that country



Universalism only works insofar as the proceedings are recognised in other countries where assets lie.



EU-Regulation 1346/2000 on insolvency proceedings has chosen a compromise solution

EU Insolvency regulation EU-Regulation 1346/2000 (Recast proposed in 2013, agreed Dec. 2014) Scope of application: only where debtor has its « centre of main interest » (COMI) in a Member State; not limited to cases where at least 2 member states are involved (C-328/12, Schmid / Hertel) Presumption that the seat of a legal person is its COMI (art. 3 id. recast).  Definition of insolvency proceedings to which it applies (art. 1.1: collective proceedings, based on insolvency, which entail the partial or total divestment of a debtor, and the appointment of a liquidator (a list is found in the Annex A to the Regulation) Thus not applicable where « debtor in possession ». Proposed Recast would make it possible to include them (new Art. 1). There is also a March 12, 2014 Recommendation from the European Commission  Exclusions: next slide 

EU Insolvency regulation 

EU-Regulation 1346/2000 (Recast proposed in 2013, agreed Dec. 2014)



Not covered by the Insolvency Regulation, but by separate Directives:

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financial institutions (WUDB, Winding up Directive for Banks 2001/24) and insurance companies (WUDI-Directive).



No uniform rules regarding investment companies yet

EU Insolvency regulation jurisdiction EU-Regulation 1346/2000 - Basic solution – possible procedures  Art. 3.1.: main proceedings: possible (only) in country of « centre of main interest » of the debtor (« COMI »). In principle universal jurisdiction, unless limited by a territorial procedure. Proposed recast would 1° define COMI and 2° also cover jurisdiction over avoidance actions (art. 3a) Result: forum shopping (insolvency tourism) by moving the COMI. 



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Art. 3.2.: a territorial insolvency can be opened in other MS where the debtor has an establishment. When there is a main proceeding, the territorial one is called « secondary »: it is territorial with respect to assets, but universal with respect to creditors (all creditors may file, not only for debts incurred in that country – no ring-fencing). It is in principle always a liquidation procedure, subject to duty to cooperate in case main proceedings are not liquidating (C-116/11 Bank Handlowy) A territorial procedure can be requested only by local creditors, a secondary by any creditor (C-327/13 Burgo Group)

EU Insolvency regulation jurisdiction 

EU-Regulation 1346/2000 - Basic solution – possible procedures

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Proposed Recast would limit possibility of such secondary procedures a bit more (see i.a. art. 36 recast) Where no secondary procedure is opened: no enforcement proceedings possible except those permitted by the law of the state of the main proceedings (ECJ in C-444/07)

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EU-Regulation 1346/2000, art. 3 Scope of jurisdiction – jurisdiction includes actions derived directly from the insolvency proceedings and closely connected with them, e.g. actions to se a detrimental transaction aside (pauliana) (C-339/07, Seagon/Deko Marty) even where the defendant resides outside the EU: C-328/12, Schmid /

Hertel.

EU Insolvency Regulation 

EU-Regulation 1346/2000 – Effects abroad of procedures:

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opening of proceedings can be published in other MS (art. 21-22, recast 2829) main insolvency must be recognised in other MS (art. 16, recast 19); has in principle the same effects as if it were opened in that state (art. 17, recast 20) – except where manifestly contrary to public order (art. 26) (e.g. fundamental rights) or insofar as it is a matter for a secondary procedure effectively opened further rules on coordination effect on pending lawsuits depends on lex fori of that lawsuit (art. 15) Recast : * internet register for insolvency proceedings (art. 25 ff recast) * duty to cooperate incl. exploring possibility of restructuring (see art. 41 ff recast). * Ch. on insolvency of members of a group of companies (56 ff.)

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EU Insolvency Regulation – applicable law  -

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The lex concursus (i.e. the lex fori of the place of opening of the insolvency) determines according to Art. 4 (7 recast) i.a.: the procedural aspects of the insolvency: which assets are in principle administered; how they are administered (powers of the administrator, the court, the debtor); formalities to be fulfilled by creditors; how sale and distribution proceedings are organised; distribution of the product in the absence of property rights effect on later disposition of assets, other than assets subject to registration effect of insolvency on current contracts (art. 4.2.e) Except: individual execution right of creditor with proprietary right (lex rei sitae) (eg in many countries creditor with mortgage) – to be decided by the lex rei sitae

EU Insolvency Regulation – applicable law 

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As to existing property rights on assets which fall under the insolvent estate: it is in principle the lex rei sitae (place of the asset) which determines the property rights on the asset (art. 5 (8 recast), for reservation of title art. 7 (10 recast), incl. Enoforcement rights surplus must go in the insolvent estate (lex concursus) Recast art. 2 (9) will clarify the lex rei sitae in respect to certain assets, such as registered shares: located in the registered office of the company book entry securities (‘dematerialised’): where the account is maintained account money (cash in accounts): member state indicated by the IBAN other rights to performance (claims): COMI of the debtor



EU Insolvency Regulation – applicable law (Cont.)

Whether detrimental acts are voidable/defeasable*: lex concursus, unless undefeasable according to lex causae (art. 4.2.m (recast 7.2.m) + art. 13 (recast 16)) * in the US « preference action » (payee was unduly preferred) • The corresponding art. 30 in the WUDB was interpreted extensively in E-28/13 (EFTA Court), LBI v Merrill Lynch 



Set-off: important differences between national laws on effect after insolvency. Art. 6 (recast 9) Reg.: set-off is effective if either effective under the lex concursus or under the lex causae of the passive claim (claim of the insolvent debtor used by the creditor to get paid).



Effect on labour contracts: governed by lex contractus (art. 10, Recast 13)

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