EUPillar R. Miguet and L. Cuypers [q.q. receivers of the liquidated company BVBA P.] v. BV G. - A/09/2197

Summary

The defendant is one of the shareholders of the bankrupt company BVBA P. It appears that the defendant still owes an amount of 13,236.17 EUR. The defendant retorts that the company owes it an amount of 28,000 EUR plus interest. First, the defendant contests the jurisdiction of the Belgian courts, since it is a company domiciled in The Netherlands. The Brussels I Regulation is applicable. It is true that Art. 1(2)(b) Brussels I provides that the Regulation shall not apply to bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings. However, the Court considers that the Brussels I Regulation is applicable to proceedings that are instituted by the bankruptcy administrators when these proceedings could in fact have been instituted by the company itself, so that the bankruptcy administrators are merely its representatives. Art. 5(1)(a) Brussels I confers jurisdiction in matters relating to contract to the courts for the place of performance of the obligation in question. First, the Court needs to determine which is the obligation in question. Then, it has to examine which is the law applicable to that obligation according to its own conflict-of-law rules, so that finally, the place of performance of the obligation can be determined in conformity with that law applicable law. This is the so-called Tessili method. In this case, the contract is neither a service contract nor a sales agreement. It should be governed by the law of the country where the party required to effect the characteristic performance of the contract has his habitual residence (cf. Art. 4(2) European Contracts Convention). It is generally admitted that the characteristic performance of the contract is the performance for which the payment is due. In the case at hand, payment is due for a performance by a Belgian firm so that Belgian law is applicable. The amount is the result of a loan made by the legal predecessor of BVBA P. to a Mr. S., a loan which was partly acquired by the defendant during the share transfer. Art. 1247 Belgian Civil Code stipulates that debts are to paid at the debtor’s place of residence. The obligation is to be performed in The Netherlands, so that the Dutch courts have jurisdiction as opposed to the Belgian courts. The bankruptcy administrators further refer to Art. 5(5) and Art. 22(2) of the Brussels I Regulation. Art. 5(5) grants jurisdiction to the courts for the place in which a branch, agency or other establishment is situated for disputes arising out of the operations of that branch. The concept of branch, agency or other establishment implies a place of business which has the appearance of permanency, such as the extension of a parent body. The BVBA P. is an independent enterprise and not the subsidiary of a parent company. Neither is Art. 22(2) applicable. The grounds of exclusive jurisdiction of Art. 22(2) receive a restrictive interpretation. The present case is not concerned with the validity of the constitution, the nullity or dissolution of companies or the validity of the decisions of their organs. The Court of Appeal declines its jurisdiction. SHORT CRITIQUE This is a correct application of the Brussels I Regulation.