Tallinna Ringkonnakohus; 2022-03-09; 2-21-11098/17
Decision by national courts in the field of European Union law — ECLI:2022:2.21.11098.2367
Date: 2022-03-09
Subject matter: Judicial cooperation in civil matters
Origin: Estonia

82022EE0309(51)_ENG_SUMJURE
JURE summary
JURE summary
This case regards the eligibility of an insolvency claim and a related jurisdiction question brought before the Tallinna Ringkonnakohus (hereinafter ‘the Court of Appeal’).
A creditor company (hereinafter ‘the plaintiff’) requested the Harju Maakohus (hereinafter ‘the Court of First Instance’) to declare the insolvency of a debtor company domiciled in Estonia (hereinafter ‘the defendant’) following an outstanding debt arising from a loan provided to the defendant.
In the loan agreement, the parties agreed to repay the loan in a 1-year period, which had already passed. However, the defendant alleged that the loan was further renewed and prolonged during a web conference between the parties. The defendant also alleged that the proceedings should be governed by German law and heard before the German courts under the loan agreement provisions. The defendant also brought a negative declaratory action against the plaintiff before a German court.
The Court of First Instance relied on the PankrS (1). It explained that insolvency proceedings could be granted only in case of an unambiguous, enforceable and non-contestable claim, which is not the current case. The plaintiff did not sufficiently substantiate its insolvency claim. The defendant’s objections are sufficient to cast doubt on the claim. The Court of First Instance confirmed the existence of a jurisdiction clause in favour of the German courts and cited Article 25(1)(a) to (c) of the Brussels I Regulation (recast) (2), according to which the jurisdiction shall lie with the German courts.
Before the Court of Appeal, the plaintiff alleged an erroneous application of the Brussels I Regulation (recast) since Article 1(2)(b) provides that this Regulation shall not apply to bankruptcy. The plaintiff also alleged a breach of PankrS and maintained that no oral agreement on an extension of the loan agreement was agreed upon between the parties. Therefore, the loan was already due but unpaid.
The first instance findings not granting the action were upheld, but the reasoning was partially changed. The Court of Appeal confirmed that the defendant had submitted such objections and evidence that determining the enforceability of the plaintiff’s claim requires fact-finding beyond the scope of bankruptcy proceedings. Therefore, the plaintiff’s action requesting the declaration of the defendant’s bankruptcy cannot succeed. The Court of Appeal confirmed that the Brussels I Regulation (recast) does not apply to the present case as follows from its Article 1(2)(b). However, the jurisdiction of the Estonian courts could be established under Article 3(1) of the Regulation (EU) 2015/848 (3), according to which ‘the courts of the Member State within the territory of which the centre of the debtor’s main interests is situated shall have jurisdiction to open insolvency proceedings’.
Therefore, the Estonian courts could hear the case but could not grant the application for bankruptcy, which is why the plaintiff’s appeal must be dismissed.
(1) Pankrotiseadus (Insolvency Law).
(2) 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.
(3) Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings.