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THE APPLICATION RATIONE TEMPORIS OF THE INSOLVENCY REGULATION IN NEW MEMBER STATES
Published online by Cambridge University Press: 31 October 2013
Extract
On 5 July 2012, the CJEU rendered a ruling in Erste/BCL on the temporal application of the Insolvency Regulation in Member States that joined the EU after the Regulation's initial entry into force on 31 May 2002 (new Member States).1 The uncertainties of interpretation concerned ‘cross-date’ proceedings; that is, when the insolvency proceeding was launched before the accession of the (new) Member State but after the Regulation's original entry into force (in the old Member States) and remained pending also after the accession. Taking into account that 44.4 per cent of the Member States joined the EU after the Insolvency Regulation's entry into force (12 out of 27 Member States),2 the ruling has an enormous practical and economic relevance, which will be refreshed following the accession of Croatia.3
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- Current Developments: Private International Law
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- Copyright © British Institute of International and Comparative Law 2013
References
1 C-527/10. Erste v Magyar Állam and others, not yet published.
2 On 1 May 2004, ten states, on 1 January 2007 two states joined the EU.
3 Croatia joined the EU on 1 July 2013.
4 The Hungarian Supreme Court (at the time of the proceedings: ‘Legfelsőbb Bíróság’, currently: ‘Kúria’) rendered a judgment on 6 December 2005 enjoining the Hungarian state to buy the shares.
5 Section 38(3) of Act IL of 1991 on the reorganization and the insolvency proceeding (in Hungarian: ‘1991. évi IL. törvény a csődeljárásról és a felszámolási eljárásról’).
6 Para 26.
7 Emphasis added.
8 See Opinion of AG Mazák in C-527/10 Erste v Magyar Állam and others, para 23 (‘That fact calls into question not only the applicability of that provision of the Regulation, but also the applicability ratione temporis of the Regulation itself to the present case. Consequently, before even dealing with the issue of the applicability of Art 5(1) of the Regulation, it is necessary to clarify the effects in time of the Regulation in the States which became Members of the European Union after its entry into force.’).
9 Emphasis added.
10 Art 3(2) of the Insolvency Regulation.
11 Opinion of AG Mazák (n 8), para 41.
12 Opinion of AG Mazák (n 8), para 43.
13 Opinion of AG Mazák (n 8), para 48.
14 Opinion of AG Mazák (n 8), para 31. For the reasoning behind this interpretation see paras 24–25 and 27–29.
15 Opinion of AG Mazák (n 8), para 47.
16 Para 30.
17 Para 35.
18 Para 36.
19 C-527/10 Erste v Magyar Állam and others, operative part.
20 Para 43.
21 Para 45 (emphasis added).
22 Art 3.
23 Arts 16–26.
24 Nagy, C, Az Európai Unió nemzetközi magánjoga (HVG-Orac 2006) 283Google Scholar.
25 Virgos, M and Garcimartín, F, The European Insolvency Regulation: Law and Practice (Kluwer Law International 2004) 30Google Scholar (‘with regard to its sphere of application in time, the Regulation has no retroactive effects’).
26 Para 303 of Virgos, M and Schmit, E, Report on the Convention on Insolvency Proceedings (1996)Google Scholar, Document 6500/96 of Council of the EU, 3 May 1996 (‘Virgos-Schmit Report’). Although the Report was not published in the Official Journal and it relates to the 1995 Draft Convention, it has considerable persuasive authority as to the Insolvency Regulation. The Report is available at <http://aei.pitt.edu/952/>.
27 See Virgos and Garcimartín (n 25) 30–1; Moss, G and Smith, T, ‘Commentary on Council Regulation 1346/2000 on Insolvency Proceedings’ in Moss, G, Fletcher, IF and Issacs, S (eds), The EC Regulation on Insolvency Proceedings: A Commentary and Annotated Guide (Oxford University Press 2002) 234Google Scholar; C Nagy (n 24) 287.
28 Para 304 of the Virgos-Schmit Report.
29 Para 304 of the Virgos-Schmit Report.
30 Case C-1/04 Susanne Staubitz-Schreiber [2006] ECR I-701.
31 Para 21.
32 [2003] OJ L 236/17.
33 Treaty of Accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia (2003), [2003] OJ L 236/33.
34 [2005] OJ L 157/11.
35 [2005] OJ L 157/203.
36 [2012] OJ L 112/10.
37 Art 3(3) of the Treaty of Accession.
38 [2012] OJ L 112/21.
39 80/934/ECC [1980] OJ L 266/1. Promulgated in Hungary by Act XXVIII of 2006.
40 Emphasis added.
41 Regulation 593/2008 [2008] OJ L 177/6.
42 Art 28 (emphasis added). See Corrigendum to Regulation 593/2008. [2009] OJ L 309/87.
43 Regulation 864/2007 [2007] OJ L 199/40.
44 Art 31 (emphasis added).
45 Regulation 44/2001 [2001] OJ L 12/1.
46 Emphasis added.
47 Regulation 1347/2000 [2000] OJ L 160/19, Art 42.
48 Regulation 2201/2003 [2003] OJ L 338/1.
49 Art 42 of the Brussels II Regulation; art 64 of the Brussels IIa Regulation.
50 According to art 66(1) of the Brussels I Regulation: ‘[t]his Regulation shall apply only to legal proceedings instituted and to documents formally drawn up or registered as authentic instruments after the entry into force thereof.’ (emphasis added)
51 According to art 66(2) of the Brussels I Regulation: ‘if the proceedings in the Member State of origin were instituted before the entry into force of this Regulation, judgments given after that date shall be recognised and enforced in accordance with Chapter III, (a) if the proceedings in the Member State of origin were instituted after the entry into force of the Brussels or the Lugano Convention both in the Member State of origin and in the Member State addressed; (b) in all other cases, if jurisdiction was founded upon rules which accorded with those provided for either in Chapter II or in a convention concluded between the Member State of origin and the Member State addressed which was in force when the proceedings were instituted.’ (emphasis added)
52 According to art 42 of the Brussels II Regulation: ‘1. The provisions of this Regulation shall apply only to legal proceedings instituted, to documents formally drawn up or registered as authentic instruments and to settlements which have been approved by a court in the course of proceedings after its entry into force. 2. Judgments given after the date of entry into force of this Regulation in proceedings instituted before that date shall be recognised and enforced in accordance with the provisions of Chapter III if jurisdiction was founded on rules which accorded with those provided for either in Chapter II of this Regulation or in a convention concluded between the Member State of origin and the Member State addressed which was in force when the proceedings were instituted.’ (emphasis added)
53 According to art 64 of the Brussels IIa Regulation: ‘1. The provisions of this Regulation shall apply only to legal proceedings instituted, to documents formally drawn up or registered as authentic instruments and to agreements concluded between the parties after its date of application in accordance with art 72. 2. Judgments given after the date of application of this Regulation in proceedings instituted before that date but after the date of entry into force of Regulation (EC) No 1347/2000 shall be recognised and enforced in accordance with the provisions of Chapter III of this Regulation if jurisdiction was founded on rules which accorded with those provided for either in Chapter II or in Regulation (EC) No 1347/2000 or in a convention concluded between the Member State of origin and the Member State addressed which was in force when the proceedings were instituted. 3. Judgments given before the date of application of this Regulation in proceedings instituted after the entry into force of Regulation (EC) No 1347/2000 shall be recognised and enforced in accordance with the provisions of Chapter III of this Regulation provided they relate to divorce, legal separation or marriage annulment or parental responsibility for the children of both spouses on the occasion of these matrimonial proceedings.’ (emphasis added)
54 Law-Decree 13 of 1979.
55 Section 7(1) of Act V of 2006 on the publicity of firms, judicial registration procedure and the winding-up of firms.
56 Nagy, C: Private International Law in Hungary (Kluwer Law International 2012) 145–6Google Scholar, paras 411 and 413–414.
57 Ibid 147, paras 416–417.
58 See Section 73(2) of Hungarian Act on Private International Law. Reciprocity is not the pre-condition of the recognition and enforcement in the following cases: (a) foreign decisions on personal status, (b) foreign property decisions if the court's jurisdiction was based on the parties' agreement and this agreement complied with Sections 62/F-62/G of the Act.
59 Section 70 of Hungarian Act on Private International Law. See Nagy (n 56) 136–7, paras 379, 144 and para 409.
60 Para 100 (‘The Convention acknowledges the interest of each State in protecting its market's trade, in the form of respect of rights in rem acquired over assets of the debtor located in that country under the law that is applicable before the opening of the insolvency proceedings.’)
61 Para 26.
62 Hungarian Supreme Court's judgment of 13 November 2012 in Case Gfv. VII.30.236/2012/5.
63 Opinion of AG Mazák (n 8), para 41.
64 As to the interpretation of art 1(2)(c) of the Brussels I Regulation (which excludes insolvency matters from the Regulation's scope) see Case 133/78 Gourdain v Nadler [1979] ECR 733, para 4 (‘[I]t is necessary , if decisions relating to bankruptcy and winding-up are to be excluded from the scope of the convention, that they must derive directly from the bankruptcy or winding-up and be closely connected with the proceedings for the “liquidation des biens” or the “reglement judiciaire”.’). As to the interpretation of art 3 of the Insolvency Regulation see Case C-339/07 Seagon [2009] ECR I-767, para 21 (‘Taking into account that intention of the legislature and the effectiveness of the regulation, art 3(1) thereof must be interpreted as meaning that it also confers international jurisdiction on the Member State within the territory of which insolvency proceedings were opened in order to hear and determine actions which derive directly from those proceedings and which are closely connected to them.’ [emphasis added]); this formula was adopted also in Case C-191/10 Rastelli Davide, not published yet, para 20.
65 Section 64(1) of the Hungarian Act on Private International Law.
66 Section 18 of the Hungarian Act on Private International Law.