EUPillar C-213/10 F-Tex SIA v Lietuvos-Anglijos UAB "Jadecloud-Vilma" (First Chamber)

Summary

This case is on the interpretation of Art 3(1) of the Insolvency Regulation and Art 1(2)(b) and 1(1) of Brussels I. It was referred to the CJEU in proceedings between F Tex (with its registered office in Latvia) and Jadecloud (with its registered office in Lithuania), concerning the return of a sum which was paid to Jadecloud by NPLC (with its registered office in Germany) when NPLC was insolvent. The insolvency proceedings were opened in respect of NPLC in Germany and the sole creditor was F Tex. The liquidator assigned to F Tex all NPLC’s claims against third parties, including the claim from Jadecloud. F Tex brought an action in Lithuania claiming that Jadecloud should be ordered to pay over the amount it had received from NPLC. The Lithuanian court held that that action came within the jurisdiction of the German courts since the insolvency proceedings had been opened in Germany. The judgment was reversed on appeal on the ground that the jurisdiction provided for in Art 3(1) of the Insolvency Regulation was not an exclusive jurisdiction and the action had to be examined on the basis of the place where the defendant had its registered office. This decision was appealed against before the referring court. In the meantime, the German court gave its decision and found that the action brought before it by F Tex against Jadecloud did not come within its jurisdiction, on the ground, inter alia, that the registered office of the defendant was not in Germany, and informed F Tex that its action would probably be dismissed as inadmissible. F Tex discontinued that action. Under these circumstances, the referring court decided to ask some questions to the CJEU concerning the relationship between Brussels I and the Insolvency Regulation. The CJEU addressed whether the action is covered by the Insolvency Regulation or Brussels I and defined the scope of two regulations. As regards the ‘bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings’ exclusion in Brussels I, it cited 133/78 Gourdain where it had found regarding the Brussels Convention that the exclusion covers decisions deriving directly from the bankruptcy or winding-up and are closely connected with the proceedings for realising the assets or judicial supervision. It also considered the Jenard and Schlosser Reports and Recital 7 to Brussels I. It found that Art 1(2)(b) of Brussels I excludes from its scope only actions which derive directly from insolvency proceedings and are closely connected with them. Then, it examined whether the action in question has a direct link with the insolvency of the debtor and is closely connected with the insolvency proceedings. It distinguished the present case from C 339/07 Seagon where it had held in connection with an action by which the applicant, in his capacity as liquidator, requested, by way of an action to set a transaction aside by virtue of the debtor’s insolvency, the repayment of a sum paid by the latter, that such an action is covered by Art 3(1) of the Insolvency Regulation. Unlike in Seagon, the applicant in this case was not acting as a liquidator, ie a body responsible for insolvency proceedings, but as the assignee of a right. The CJEU observed that once the right is acquired by the assignee, the exercise by the assignee of that right is not closely connected with the insolvency proceedings. It therefore concluded that the action in the main proceedings is not closely connected with the insolvency proceedings. Consequently, without the need to rule on the existence of any direct link between that action and the insolvency of the debtor, it found that action is not covered by Art 3(1) of the Insolvency Regulation and, symmetrically, that it does not concern bankruptcy or winding-up under Art 1(2)(b) of Brussels I. It accordingly found that the action is covered by Brussels I under Art 1(1).