Opinion of the Advocate-General



Opinion of the Advocate-General

I – Introduction

1. Not all debtors have a father like Goriot. Generosity and nobility of spirit are rare in the realm of the market since traders lack the advantages which allowed Delphine and Anastasie, ungrateful and vain daughters, to live and get into debt with such a lack of restraint at the expense of their devoted father, who, when he died in complete financial ruin, was still praising his offspring. (2)

2. The insolvency of an undertaking is no human comedy but the desperate conduct of those who are unable to meet their payments goes back to the origins of humanity. The law seeks to counteract the ruses of defaulting debtors in dire straits, although, on occasions, difficulties such as the ones identified by the Bundesgerichtshof (German Supreme Court) in the present case are encountered when the rules of law are implemented.

3. In that regard, the Bundesgerichtshof has referred to the Court of Justice for a preliminary ruling under Article 234 EC two questions concerning the interpretation of Article 3(1) of Regulation (EC) No 1346/2000 on insolvency proceedings (3) and Article 2(1) and (2) of Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. (4)

4. The referring court asks whether an action in the context of an insolvency to set a transaction aside is subject to the provisions of Regulation No 1346/2000 or to those of Regulation No 44/2001, for the purposes of determining the appropriate court to hear a cross-border dispute.

5. Actions in the context of an insolvency to set a transaction aside have their roots in the actio pauliana , a legal remedy governed by civil law which protects creditors against disposals of assets made by their debtors with the intention to defraud. Accordingly, it is necessary to examine the development and the current state of both remedies and to interpret the two regulations concerned with a view to establishing the correct jurisdiction.

II – The facts

6. Frick Teppichboden Supermärkte GmbH (‘the debtor’) paid EUR 50 000 to Deko Marty Belgium NV (‘the defendant’) on 14 March 2002. Although the defendant is a Belgian company established in Belgium, that sum was credited to a bank account the company holds with KBC Bank in Dusseldorf, Germany.

7. The following day, the debtor applied to commence insolvency proceedings before the Amtsgericht (Local Court), Marburg, and that application was granted on 1 June 2002. In the order opening the proceedings Mr Christopher Seagon (‘the applicant’) was appointed as liquidator.

8. The applicant brought an action to have the transaction set aside before the Landgericht (Regional Court), Marburg and claimed repayment of the EUR 50 000 paid to the defendant.

9. The Landgericht considered the applicant’s claim separately and dismissed it as inadmissible on the grounds that German courts were not entitled to rule on the applicant’s action because the defendant has its registered office in another State (Belgium) and Regulation No 1346/2000 does not apply to actions in the context of an insolvency to set a transaction aside. An appeal at last instance was brought against that judgment before the Bundesgerichtshof.

III – Legal framework

A – The Community legal framework

1. Regulation No 1346/2000 on insolvency proceedings

10. The case turns on the interpretation of the rules on international jurisdiction contained in Community insolvency law. However, it is appropriate to assess the general legal framework applicable to conflict of laws in this field, by also analysing the rules on the law applicable and the recognition of judgments.

11. Article 3(1) and (2) of Regulation No 1346/2000 sets out the rules on jurisdiction applicable to insolvency proceedings with a Community dimension.

‘ Article 3

International jurisdiction

1. The courts of the Member State within the territory of which the centre of a debtor’s main interests is situated shall have jurisdiction to open insolvency proceedings. In the case of a company or legal person, the place of the registered office shall be presumed to be the centre of its main interests in the absence of proof to the contrary.

2. Where the centre of a debtor’s main interests is situated within the territory of a Member State, the courts of another Member State shall have jurisdiction to open insolvency proceedings against that debtor only if he possesses an establishment within the territory of that other Member State. The effects of those proceedings shall be restricted to the assets of the debtor situated in the territory of the latter Member State.

…’

12. The provisions of Regulation No 1346/2000 governing the law applicable are closely linked to the article cited above. Thus, Article 4 provides:

‘ Article 4

Law applicable

1. Save as otherwise provided in this Regulation, the law applicable to insolvency proceedings and their effects shall be that of the Member State within the territory of which such proceedings are opened, hereafter referred to as the “State of the opening of proceedings”.

2. The law of the State of the opening of proceedings shall determine the conditions for the opening of those proceedings, their conduct and their closure. It shall determine in particular:

…

(m) the rules relating to the voidness, voidability or unenforceability of legal acts detrimental to all the creditors.’

13. As concerns acts detrimental to creditors, Article 13 qualifies the wording of Article 4.

‘ Article 13

Detrimental acts

Article 4(2)(m) shall not apply where the person who benefited from an act detrimental to all the creditors provides proof that:

– the said act is subject to the law of a Member State other than that of the State of the opening of proceedings, and

– that law does not allow any means of challenging that act in the relevant case.’

14. Chapter II of Regulation No 1346/2000 concerns the recognition and enforcement of judgments. Articles 16(1) and 25(1) and (2) are of particular significance for the purposes of the present case.

‘ Article 16

Principle

1. Any judgment opening insolvency proceedings handed down by a court of a Member State which has jurisdiction pursuant to Article 3 shall be recognised in all the other Member States from the time that it becomes effective in the State of the opening of proceedings.

…’

‘ Article 25

Recognition and enforceability of other judgments

1. Judgments handed down by a court whose judgment concerning the opening of proceedings is recognised in accordance with Article 16 and which concern the course and closure of insolvency proceedings, and compositions approved by that court shall also be recognised with no further formalities. Such judgments shall be enforced in accordance with Articles 31 to 51, with the exception of Article 34(2), of the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, as amended by the Conventions of Accession to this Convention.

The first subparagraph shall also apply to judgments deriving directly from the insolvency proceedings and which are closely linked with them, even if they were handed down by another court.

The first subparagraph shall also apply to judgments relating to preservation measures taken after the request for the opening of insolvency proceedings.

2. The recognition and enforcement of judgments other than those referred to in paragraph 1 shall be governed by the Convention referred to in paragraph 1, provided that that Convention is applicable.’

2. Regulation No 44/2001

15. The general rules on jurisdiction and the recognition and enforcement of judgments are contained in Regulation No 44/2001, whose provisions transpose into Community law the 1968 Brussels Convention, which it supplanted. Article 1, which lays down the scope of the regulation, provides:

‘ Article 1

1. This Regulation shall apply in civil and commercial matters whatever the nature of the court or tribunal. It shall not extend, in particular, to revenue, customs or administrative matters.

2. The Regulation shall not apply to:

…

(b) bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings;

…’

B – The national legal framework

16. In German insolvency law, measures to protect assets are set out in Paragraph 129 et seq. of the Insolvenzordnung (Insolvency Code) of 5 October 1994.

17. However, German law lacks any specific rules on international jurisdiction for actions in the context of an insolvency to set a transaction aside. In line with Regulation No 1346/2000, Paragraphs 3 and 102 of the Insolvenzordnung, which concern international jurisdiction, do not provide for any matters expressly relating to actions to set a transaction aside.

18. Notwithstanding that legislative silence, by judgment of 11 January 1990, the Bundesgerichtshof held that such actions derive from insolvency proceedings and are closely connected those proceedings. (5) That judgment arose in a case concerning the jurisdiction of the German courts in insolvency proceedings with links to other Member States. The Bundesgerichtshof gave that classification of actions to set a transaction aside following an analysis of Article 1 of the Brussels Convention (now Regulation No 44/2001), the wording of which excluded insolvency from the scope of the convention. The Bundesgerichtshof ruled that the Brussels Convention was not applicable because an action to set aside comes within the insolvency proceedings and is therefore not covered by the rules of jurisdiction set out in the convention.

IV – The questions referred for a preliminary ruling

19. By order of 21 June 2007, the Bundesgerichtshof referred to the Court the following questions arising from the action brought by the liquidator, Mr Christopher Seagon, against Deko Marty Belgium NV:

‘(1) Do the courts of the Member State within the territory of which insolvency proceedings regarding the debtor’s assets have been opened have international jurisdiction under Regulation (EC) No 1346/2000 in respect of an action in the context of the insolvency to set a transaction aside that is brought against a person whose registered office is in another Member State?

(2) If the first question is to be answered in the negative:

Does an action in the context of the insolvency to set a transaction aside fall within Article 1(2)(b) of Regulation (EC) No 44/2001?’

20. Observations were lodged, within the time-limit laid down in Article 23 of the EC Statute of the Court of Justice, by the applicant and the defendant in the main proceedings, the Greek and Czech governments, and the Commission.

21. At the hearing on 11 September 2008, oral argument was presented by the legal representative of Mr Seagon and by the agents of the Greek Government and the Commission.

V – The first question

22. The referring court has submitted to the Court of Justice a question which requires an initial conceptual analysis. Essentially, it is necessary to determine whether a civil action, in this case, an action in the context of an insolvency to set a transaction aside, is part of the insolvency proceedings by reason of its connection with the insolvency. First of all, it is appropriate to pay particular attention to the action concerned, and to analyse its origins and subsequent development.

A – Actions in the context of an insolvency to set a transaction aside under Community law on conflicts of jurisdiction

1. Origin and evolution of the action to set aside in insolvency law

23. The protection of creditors against the fraudulent schemes of debtors has improved considerably with the passage of time. Roman law produced the first learned legal views on the matter, although those beginnings were not distinguished as being a model of moderation and equity. (6)

24. The actio per manus iniectio , the original version of the action to set aside, was an enforcement instrument which granted the creditor the right to sell the debtor as a slave, together with his family, or to kill him, if the debt was proved by judgment or confession. (7) Table III of the Law of the Twelve Tables enshrined in explicit terms the severity of the Roman procedural system, closing the table on debt with the famous maxim adversus hostem aeterna auctoritas esto (against an enemy, the right of property is valid forever). (8)

25. In around 150 to 125 BC, a praetor named Paulus, about whom little is known, (9) contributed to the removal of the excessive adherence to formalities from the earliest civil actions by creating a procedure that was personal and discretionary in nature, which enabled a creditor to revoke any acts carried out fraudulently and to his detriment by a debtor. (10) Centuries later, the Digest consolidated the most sophisticated version of the actio pauliana , by merging it, in its classical form, with the interdictum fraudatorium . (11) From that time, the actio pauliana was based on the concepts of alienatio (alienation), eventus fraudis (detriment), fraus (fraud) and participatio fraudis (knowledge of the fraud).

26. Two thousand years is sufficient time for the law and those who practise it to move forward. However, the genius of the Roman jurists ensured that the main features of the actio pauliana have survived intact to this day. Despite the differences between the legal systems of the Member States, the solutions which those systems offer in respect of disposals of assets in fraud of creditors have a common genetic code. Thus, nowadays the actio pauliana constitutes an exception to the principle of privity of contract and is contrary to the rule that a person who is not party to a contract may not benefit from or suffer its legal consequences. (12) The majority of the national legal systems recognise that what is at the heart of the action to set aside is not compensation but rather the preservation of a creditor’s rights over a debtor’s assets. From a procedural point of view, the action is brought against a third-party who has acquired the disputed asset, although the debtor is frequently named so that the judgment given may be enforced against him.

27. Over time, there have been significant changes to the actio pauliana in the sphere of insolvency proceedings. (13) The first alteration was to the name, since in insolvency law it took the title ‘action to set a transaction aside’. (14) The fundamental difference between the action to set aside in civil law and the action in the context of an insolvency to set a transaction aside lies in the effects which each action produces, since, under the general rules, those effects are confined to the individual creditors who have brought the action, whereas, under the insolvency rules, the effects apply to the whole of the assets and therefore benefit all the creditors, a typical feature which has become a general principle of insolvency law under the Latin maxim par conditio creditorum. (15)

28. In some national legal systems, such as the French one, the distinction between the rules of civil law and the rules of insolvency law also extends to the rules on nullity, since the liquidator may have certain acts declared automatically void, a feature which under the general scheme of the action to set aside is restricted to voidability. (16) That special feature is also found in United Kingdom law, where, depending on the reason behind them, acts may be declared automatically void. (17) In addition, it is appropriate to mention that insolvency law has dispensed with the subjective element of the actio pauliana , which required the applicant to prove the debtor’s fraudulent intention. In contrast to their civil law counterparts, provisions governing actions in the context of an insolvency to set a transaction aside generally include a presumption of fraud, thereby reversing the burden of proof. (18)

29. A further indication of the autonomous nature of the action in the context of an insolvency to set a transaction aside vis-à-vis the general civil action is the fact that the latter action is secondary in nature, since it may only be brought by a liquidator where the conditions laid down in insolvency law for bringing an action to set a transaction aside (usually, the limitation periods set out in insolvency legislation) are not satisfied. (19)

2. Actions in the context of an insolvency to set a transaction aside and the Community provisions on international jurisdiction

30. The civil action to set aside and its counterpart in insolvency law have been addressed in secondary Community legislation and the case-law of the Court. It has been found that, in Community law, a distinction between the type of action to be brought under the general law on debt and the specific proceedings to be brought in the sphere of insolvency has endured. That distinction is particularly important with regard to the rules on conflict of laws, since the outcome varies according to which classification is applicable.

31. In Reichert , (20) the Court was required to carry out an interpretation to determine whether the action paulienne under French law was subject to the jurisdiction laid down in the Brussels Convention (now Regulation No 44/2001) for personal actions or for actions in rem. The dispute between Mr and Mrs Reichert and Dresdner Bank concerned the fraudulent donation of immovable property in France to the couple’s son. Dresdner Bank brought an action paulienne against Mr and Mrs Reichert before a court in France, the country where the immovable property was situated, thus relying on the principle of locus rei sitae . In the light of a challenge to the jurisdiction of the French courts, the Tribunal de grande instance de Grasse referred to the Court of Justice for a preliminary ruling a question concerning the application of the Brussels Convention to the action paulienne.

32. The Court examined the definition of the action paulienne, concluding that it was a personal rather than an action in rem, and that, therefore, courts of the locus rei sitae did not have jurisdiction. The Court analysed the nature of the action paulienne in French law and ruled that it ‘is based on the creditor’s personal claim against the debtor and seeks to protect whatever security he may have over the debtor’s estate. If successful, its effect is to render the transaction whereby the debtor has effected a disposition in fraud of the creditor’s rights ineffective as against the creditor alone.’ (21) Although the Court did not make an explicit ruling to that effect, it is apparent from the judgment that jurisdiction lies with the courts in the defendant’s State of domicile. (22)

33. Following that analysis of the action governed by civil law, it must be noted that the view of the Court has been considerably different when examining actions in the context of an insolvency to set a transaction aside. In Gourdain , (23) the Court was required to define such actions, also in the light of provisions of the 1968 Brussels Convention, holding that the convention did not apply when the action brought was connected with proceedings for the liquidation of assets or the suspension of payments.

34. It is well known that subparagraph 2 of the second paragraph of Article 1 of the Brussels Convention, together with Article 1(2)(b) of Regulation No 44/2001 which is now applicable, excluded from the scope of the convention certain matters such as ‘bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings’. In Gourdain , the Court found that actions in the context of an insolvency were caught by the definition of ‘analogous proceedings’, but with the proviso that such actions 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”’. (24)

35. Accordingly, whereas the Court held that the action paulienne under civil law fell within the scope of the Brussels Convention, it ruled that actions in the context of an insolvency to set a transaction aside were not covered by the convention on the grounds that subparagraph 2 of the second paragraph of Article 1 excluded them from its conflicts of laws rules.

36. I must point out that, in Gourdain , the Court gave as the reason for that exclusion the direct relationship between the action and the insolvency proceedings. (25) However, in that judgment the Court does not put forward an autonomous Community definition of actions in the context of an insolvency to set a transaction aside. On the contrary, the Court sets out a number of general criteria, which do have a Community dimension and may then be applied to the actions provided for in the legal systems of the Member States. (26) Using the same methodology, the Court acknowledged the existence of a link between the insolvency proceedings and the action under French law (disputed in the main proceedings in that case), having regard to a number of factors. First, under French law, which governed the main proceedings, the action is brought only before the court which made the insolvency order; second, only the liquidator or the court (of its own motion) may bring the action; third, the action is brought on behalf of and in the interest of the general body of creditors; and fourth, a different limitation period is provided for under the insolvency provisions. (27)

37. Actions in the context of an insolvency to set a transaction aside have not received the same attention in secondary legislation. Regulation No 1346/2000 on insolvency proceedings is certainly ambiguous on this subject, a matter which I will discuss later.

38. However, the 1995 Brussels Convention on insolvency proceedings, which was drawn up under the auspices of the European Community but never entered into force because not all the Member States agreed to sign it, warrants a separate mention. (28) Although the failed instrument is similar in content to Regulation No 1346/2000, its provisions are accompanied by an explanatory report, drawn up and negotiated by the Member States. (29) The report was drafted by Professor Miguel Virgós Soriano, professor at the Universidad Autónoma, Madrid and the Luxembourg magistrate Etienne Schmit, who were also involved in drafting the convention. (30) In paragraph 77 of the report, the authors state with authority that, although the convention does not enshrine the procedural principle of vis atractiva concursus , it does partially address that principle. Citing the Gourdain judgment, the authors assert that there is an element of attraction when ‘actions [are] directly derived from insolvency and in close connection with the insolvency proceedings’. They conclude by stating that ‘[l]ogically, to avoid unjustifiable loopholes between the two Conventions, these actions are now subject to the Convention on insolvency proceedings and to its rules of jurisdiction ’. (31)

3. Summary

39. The rules governing insolvency proceedings have diverged significantly from the general provisions of civil law, to the extent that the traditional actio pauliana has become a very different action in the insolvency law of the Member States. The Court has given rulings on both types of action in cases concerning conflicts of jurisdiction at Community level, holding that civil actions are subject to the general rules of jurisdiction in the Brussels Convention (now Regulation No 44/2001) but that actions in the context of an insolvency to set a transaction aside are excluded from that convention. Since the rules on international jurisdiction do not apply to insolvency proceedings or to ‘analogous proceedings’, the Court has taken the view that, even though actions to set aside do not have an autonomous community definition, they are part of insolvency proceedings where they are closely connected with those proceedin gs. That connection is determined by reference to the nature of each action as it is defined in the relevant national legislation.

40. That legislative and case-law framework formed the applicable law before the entry into force of Regulation No 1346/2000 on insolvency proceedings. In my view, it is essential to determine next whether the adoption of that provision confirms or amends the points I have set out above.

B – Actions in the context of an insolvency to set a transaction aside and Regulation No 1346/2000

41. The question referred for a preliminary ruling by the Bundesgerichtshof may be reduced simply to the following: does Article 3(1) of Regulation No 1346/2000, which lays down provisions on jurisdiction in the field of insolvency, apply to actions in the context of an insolvency to set a transaction aside, even though it does not expressly state as much?

42. Contrary to the assertions of the applicant and the defendant, I do not believe that in the present case there are any lacunae in the Community legislation. The analogy principle comes into play when the law does not provide a solution to the problem. Where there is no applicable provision, pursuant to the analogy principle, a legal practitioner may invoke another provision with an identical legal basis and identical subject-matter. (32) That may not occur in the present proceedings because there are applicable rules (Article 3(1) of Regulation No 1346/2000), in addition to other articles in the same legislation which assist with the resolution of the proceedings.

43. There is, however, a pitfall with regard to interpretation, which calls for an analysis of Article 3(1). That is where the uncertainties of the referring court lie. There is no lacuna and instead it is necessary to carry out an interpretation.

1. Regulation No 1346/2000 and its conflicts of laws rules

44. Regulation No 1346/2000 appears to remain silent on the matter of jurisdiction for bringing an action in the context of an insolvency to set a transaction aside, but Article 3(1) of the regulation contains a general rule of jurisdiction based on the jurisdiction of the State within the territory of which the centre of a debtor’s main interests is situated. (33)

45. That rule is capable of providing a straightforward solution, bolstered by another argument put forward by the defendant. Article 18(2) of Regulation No 1346/2000, which sets out the powers of the liquidator, confers on the liquidator the right to ‘bring any action to set aside which is in the interests of the creditors’, from which it may be inferred that, by providing that the liquidator may bring such actions without adopting a rule of jurisdiction in that regard, the Community legislature wished to exclude actions to set aside from the scope of the regulation. It follows from the same argument that international jurisdiction is provided for in Regulation No 44/2001 or in the separate rules of national law.

46. Notwithstanding the logic of that argument advanced by the defendant, to my mind, the reply of the applicant is more persuasive since, although, unlike Article 3(1), Article 18(2) of Regulation No 1346/2000 refers nominally to actions to set aside, such an a contrario interpretation must be applied with caution. (34) The wording of recital 6 in the preamble to Regulation No 1346/2000, which reflects the uncertainties of the institutions with regard to the issue of jurisdiction and actions in the context of an insolvency to set a transaction aside, is evidence of that need for caution. After stating that the provisions of the regulation are intended to comply with the principle of proportionality, the recital goes on to state that the Regulation ‘should be confined to provisions governing jurisdiction for opening insolvency proceedings and judgments which are delivered directly on the basis of the insolvency proceedings and are closely connected with such proceedings’. The recital points out that the regulation goes further than that, since it also concerns ‘the recognition of those judgments and the applicable law which also satisfy that principle’.

47. The intention of the Council to resolve the difficulties inherent in cases such as the present one is clearly and unequivocally demonstrated, which moves me to minimise the importance of Article 18(2) when it comes to interpreting Article 3(1).

48. An analysis of the scheme of Regulation No 1346/2000 leads to an outcome which differs from the one proposed by the defendant, (35) since Article 4(2)(m) and the second subparagraph of Article 25(1) lay down rules on the law applicable and the recognition of judgments with regard to actions in the context of an insolvency to set a transaction aside. The fact that the second subparagraph of Article 25(1) contains such a rule is of particular significance, since, by referring to the provisions on recognition and enforcement laid down in Regulation No 44/2001, the article provides that those provisions ‘shall also apply to judgments deriving directly from the insolvency proceedings and which are closely linked with them, even if they were handed down by another court’. That is a clear reference to the Gourdain judgment, which bolsters the position of the applicant. (36)

49. Regulation No 1346/2000 does not differentiate between the rules on jurisdiction and the rules on recognition. In fact, the two sets of rules feed off one another, since the judgments which must be recognised under Article 25 concern the matters which come under the jurisdiction of the court seised of the insolvency proceedings. (37)

50. For the reasons set out, the intention of the Council in laying down the procedural rules governing actions in the context of an insolvency to set a transaction aside is clear. The analysis of Regulation No 1346/2000 demonstrates that there is not a total but rather a partial silence. That factor contributes to the solution which I will propose to the Court, but before that I must consider the role played by Regulation No 44/2001.

2. The interpretation of Regulations No 1346/2000 and No 44/2001

51. In order to ensure that Article 3(1) of Regulation No 1346/2000 confers overarching jurisdiction on the court seised of the insolvency proceedings, it is appropriate to establish whether, pursuant to the Gourdain case-law, Regulation No 44/2001 excludes actions in the context of an insolvency to set a transaction aside.

52. The defendant claims that the entry into force of Regulation No 1346/2000 brought about a substantial change in the legislative framework which modified the terms of the Gourdain judgment, discussed above, in that subparagraph 2 of the second paragraph of Article 1 of the 1968 Brussels Convention was interpreted broadly owing to the fact that there was only one Community instrument in the field and accordingly no risk of overlapping. The Gourdain judgment was, therefore, the final link in a chain the only pendant on which was a single piece of legislation in the field concerned. The defendant maintains that, following the adoption of Regulation No 1346/2000, the need to prevent lacunae in the rules on jurisdiction required a different interpretation of the aforementioned provision, now Article 1(2)(b) of Regulation No 44/2001. In the view of the defendant, since there is already a provision governing jurisdiction in the field of insolvency, it must be interpreted restrictively. That view would leave the determination of international jurisdiction to the autonomous national rules, in this case the rules of German law.

53. However, the defendant’s position is totally unconvincing, since it would be possible to accept such a position only if it were really the case that Article 3(1) of Regulation No 1346/2000 fails to lay down any rules on jurisdiction with regard to actions in the context of an insolvency to set a transaction aside. In line with the argument advanced by the Czech Government in its written observations, there is nothing to indicate that the Community legislation on insolvency is silent on the matter; moreover, the fact that the two regulations exist side by side strengthens the principle of the absence of lacunae, although not in the way claimed by the defendant. (38)

54. The consistency of Community law entails two consequences. The first is that when the general provision is silent or refers, implicitly or explicitly, to another provision, it is necessary to look for the rule of jurisdiction in the special provisions. The second consequence is that the large number of Community provisions means that any reference to national law would be superfluous, not only because of the scheme of the relationship between provisions but also for reasons connected with the effectiveness of the rules on jurisdiction and recognition laid down in the Community rules on conflict of laws. (39)

55. Accordingly, the Gourdain judgment is in good health and provides useful guidance for resolving the present proceedings. (40) Rather than weakening the usefulness of that judgment, the adoption of Regulation No 1346/2000 increases it. Since there is no uniform action to set aside in Community law, the nature of the action and its subsequent connection with the insolvency proceedings is of particular importance. (41) Thus, an analysis of the action to set aside in German law offers sufficient reasons to rely on Gourdain and to establish which regulation contains the rule of jurisdiction. (42)

56. Paragraph 129 et seq. of the Insolvenzordnung, 1994 provides that the action in the context of an insolvency to set a transaction aside has the following features. The action is governed exclusively by insolvency law and may be brought only in the context of an insolvency, (43) and legal standing to bring the action rests solely with the liquidator who must be acting to protect the interests of the general body of creditors. (44) Further, in seeking to protect the assets of the debtor, the action is brought vis-à-vis dispositions preceding the opening of the insolvency proceedings, and there is a limitation period for that purpose. (45)

57. The fact that the proceedings are adversarial rather than collective, as is the case in the context of insolvency, is not sufficient for a finding that there is no connection between the action to set aside and the insolvency proceedings. (46) All the indications are that the action is closely linked to the judicial declaration of insolvency, which only the liquidator has legal standing to apply for, thereby demonstrating its undeniable connection with the insolvency proceedings.

58. Therefore, the joint interpretation of Regulations No 44/2001 and No 1346/2000 in the light of the Gourdain case-law leads me to agree that an action in the context of an insolvency to set a transaction aside does not come under the general Community provisions on jurisdiction. Accordingly, the connection must be found in the provisions of Regulation No 1346/2000, and specifically in Article 3(1) of that regulation. That view is bolstered by a number of considerations relating to the legislative policy underlying Community insolvency law. I will examine that point in the next section before finishing with an important qualification of the foregoing considerations.

3. The aims of the action in the context of an insolvency to set a transaction aside and the legislative policy underlying Regulation No 1346/2000

59. Community action in the field of insolvency is based on the need for effectiveness and legal certainty. In order to avoid a complicated legislative framework which discourages financial transactions within the European Union, Regulation No 1346/2000 sets out clear guidelines which provide stability and consistency in such important fields as jurisdiction, applicable law, and the recognition and enforcement of judgments. There have been other developments in the secondary legislation on the subject, all of which have the same aim and together form the body of Community insolvency law . (47) In short, it is a body of law which is fully dedicated to the aim of ensuring that there is consistency in the adoption of judicial decisions. (48)

60. Recital 4 in the preamble to Regulation No 1346/2000 expresses that concern in the context of conflict of laws, stating that: ‘[i]t is necessary for the proper functioning of the internal market to avoid incentives for the parties to transfer assets or judicial proceedings from one Member State to another, seeking to obtain a more favourable legal position (forum shopping)’. With that aim in mind, the regulation provides for a universal international insolvency model based, on a single definition of all collective proceedings, regardless of the territory in which they were opened. (49) The advantages of that model are easily visible, since it provides for a predictable system, discourages forum shopping and reduces the costs of the proceedings. (50) Nevertheless, universalism has drawbacks, notably the situation in which it leaves certain local creditors, particularly when they are isolated and have fewer resources than other creditors to bring proceedings in a Member State where they do not reside. However, the overall benefits of the universal model speak for themselves, especially when regard is had to the true purpose of all insolvency proceedings, namely, the reorganisation of an undertaking and guaranteeing credit. The clear reduction of costs which results from the centralisation of all the proceedings is a decisive incentive when it comes to opting for universal international insolvency proceedings, which is what, in general terms, Regulation No 1346/2000 provides for. (51)

61. Some uncertainty has arisen concerning the financial sense of separating actions in the context of an insolvency to set a transaction aside. The Greek and Czech governments maintain (52) that there would be a significant distortion of the universal principle laid down in Regulation No 1346/2000, in that the liquidator would be required to bring actions in a number of Member States in accordance with the rules of international jurisdiction laid down in instruments other than the regulation. It would also foster legislative differences, and traders would seek the most favourable jurisdiction, thereby disrupting the normal course of insolvency proceedings. (53) Although it would give creditors residing in the State where the liquidator brings proceedings a certain advantage, it is important to remember the global interests which the insolvency proceedings seek to protect, which are not only the interests of individual creditors but also those of the general body of creditors and the total liabilities. (54)

62. However, there are circumstances in which the universal model is unsatisfactory. For example, I refer to cases where there is a connection outside the Community, in which the guarantee that the judgment handed down in the Member State of the opening of proceedings will be recognised in a non-Member country, where the debtor’s assets are situated, is reduced. Moreover, centralising jurisdiction for insolvency proceedings does not always lower the costs, and there are cases in which it would be more advantageous to bring actions in the Member State where the assets are situated in order not to waste time or money on recognition and enforcement proceedings.

63. For all of the foregoing reasons, it is appropriate to qualify the universalism of Regulation No 1346/2000 with regard to actions in the context of an insolvency to set a transaction aside.

4. Is the jurisdiction laid down in Regulation No 1346/2000 alternative or exclusive?

64. Community legislation on insolvency contains a number of different types of rules on jurisdiction. The provisions provide for exclusive jurisdiction for the opening, conduct and termination of the proceedings, and for actions deriving directly from those proceedings. By contrast, jurisdiction for preservation measures is alternative in nature.

65. The particular features of actions in the context of an insolvency to set a transaction aside mean that jurisdiction for deciding such actions is not always exclusive. As a number of writers have pointed out, jurisdiction for such actions is relatively exclusive , which is to be construed as meaning that it comes within the powers of the liquidator. (55) I agree with those who maintain that bringing an action to set a transaction aside is a right of action in the hands of the liquidator. Accordingly, it is for the liquidator alone to bring the most appropriate actions in the course of the proceedings for the purposes of protecting the assets as a whole.

66. That assertion is supported by Article 18(2) of Regulation No 1346/2000, which provides that the liquidator ‘may in any other Member State claim through the courts or out of court that moveable property was removed from the territory of the State of the opening of proceedings to the territory of that other Member State after the opening of the insolvency proceedings’. (56) The article goes on to provide that the liquidator may ‘bring any action to set aside which is in the interests of the creditors’. It may logically be presumed that such an action may be brought in any Member State, as stated in the first sentence of the article. (57)

67. The same approach may also be inferred from the second subparagraph of Article 25(1) of the regulation. With regard to the rules concerning the recognition and enforcement of judgments, that provision lays down an obligation to recognise judgments ‘deriving directly from the insolvency proceedings and which are closely linked with them, even if they were handed down by another court ’. Thus the regulation provides that judgments arising from an action in the context of the insolvency to set a transaction aside may be adopted by the court seised of the insolvency proceedings or by another court which is situated either in the same Member State or in a different one.

68. That power of the liquidator is consistent with the tasks he carries out during the insolvency proceedings. Article 2(b) of Regulation No 1346/2000 defines liquidator as a person or body whose function is to ‘administer or liquidate assets of which the debtor has been divested or to supervise the administration of his affairs’. The powers and obligations of liquidators vary between the Member States but have the general feature of exclusive responsibility for the principal formalities in any insolvency proceedings. The liquidator protects the assets and the par conditio creditorum , and he instigates the compositions and reorganisation plans which enable an undertaking to overcome the crisis. In line with the strategic decisions which the liquidator must take, he must choose between different jurisdictions when it comes to bringing actions to protect the assets.

C – Corollary

69. In those circumstances, it is my view that, in accordance with Article 3(1) of Regulation No 1346/2000, a national court which is seised of insolvency proceedings has jurisdiction to hear an action in the context of the insolvency to set a transaction aside brought against a defendant whose registered office is in another Member State. Since that jurisdiction is relatively exclusive, it is for the liquidator to choose the forum which, having regard to the connections of the contested disposition, is most suitable for protecting the assets.

VI – The second question

70. The second question from the referring court is framed in such a way that it is subject to the Court giving a negative reply to the first question. Accordingly, in the light of the reply I propose to the first question, it is not necessary to analyse the second question.

71. However, should the Court disagree with the view put forward in this Opinion, it would be necessary to rely on the principle of the absence of lacunae between Regulation No 44/2001 and Regulation No 1346/2000. Pursuant to that principle and to the principle of the consistency of Community law, the rules of jurisdiction applicable to actions in the context of an insolvency to set a transaction aside with a Community dimension are contained in those regulations. If the Court finds that Article 3(1) of Regulation No 1346/2000 does not apply to such actions, they would come under Regulation No 44/2001 and the rules of international jurisdiction laid down therein.

72. That is not the most desirable outcome because it would be tantamount to ruling that the Gourdain case-law has become obsolete following the adoption of Regulation No 1346/2000. In those circumstances, the Court would be required to provide a consistent and full statement of the law offering a convincing alternative to the one it laid down in that case. (58)

73. The other solution, namely, the determination of international jurisdiction in accordance with national rules on conflicts of jurisdiction, would be contrary to the effectiveness sought by both regulations, as I have explained in paragraph 53 of this Opinion.

74. My proposal is bolstered by the unfortunate consequences which would result from a negative reply to the first question, in accordance with the reductio ad absurdum theory. I am therefore moved to stress more forcefully the arguments I have put forward in relation to the first question from the referring court.

VII – Conclusion

75. In the light of the foregoing considerations, I propose that the Court should reply to the questions referred for a preliminary ruling by the Bundesverwaltungsgericht, declaring that:

Article 3(1) of Regulation No 1346/2000 must be interpreted as meaning that a national court which is seised of insolvency proceedings has jurisdiction to hear an action in the context of the insolvency to set a transaction aside brought against a defendant whose registered office is in another Member State.

(1) .

(2) – H. de Balzac, Père Goriot , translated by A.J. Krailsheimer, Oxford University Press, Oxford, 1991.

(3) – Council Regulation of 29 May 2000 (OJ 2000 L 160, p. 1).

(4) – Council Regulation of 22 December 2000 (OJ 2001 L 12, p. 1).

(5) – Judgment of the Bundesgerichtshof of 11 January 1990 (IX ZR 27/89).

(6) – The Spanish Roman law specialist Xavier D'Ors began a work by describing the setting aside of fraudulent acts as one of the most difficult and disputed areas in the whole of Roman law ( El interdicto fraudatorio en el derecho romano clásico , Rome-Madrid, 1974, p. 1).

(7) – The manus iniectio procedure was carried out as follows. If 30 days had passed since the declaratory judgment was handed down and the debtor had not paid, the creditor would take the debtor, by force if necessary, before the judge and state ‘you were ordered to pay me 10 000 sesterces and you have not paid them and I therefore take possession of you under judgment for 10 000 sesterces’ (Gaius 4, 21).

(8) – Some commentators are of the opinion that this statement proves the existence of a rule to the effect that there was no limitation period for personal debts. Others take the view that the term ‘enemy’ refers to individuals who did not have Roman citizenship, against whom a creditor was entitled to take action at any time. Whatever the correct interpretation is, whether the rule was disproportionate or discriminatory, Roman law developed along more subtle lines.

(9) – The mysterious praetor Paulus has been the source of great debate between Roman law specialists. Some argue that he was the jurist Paul, a praetorian prefect in 222 BC, while others maintain that the name comes from a procedure which was developed in the Byzantine period. Those views are described by Planiol, M., Traité élémentaire de droit civil , 8th ed., LGDJ, Paris, 1920-1921, No 1413, and, in more detail, by Collinet, P., ‘L’origine byzantine du nom de la Paulienne’, Nouvelle revue historique de droit français et étranger , 43, 1919.

(10) – Ankum, J.A., De geschiedenis der ‘actio pauliana’, Zwolle Tjeenk Willink, 1962; Coing, H., ‘Simulatio und Fraus in der Lehre des Bartolus und Baldus’, Festschrift P. Koschaker , volume III, 1939, p. 402 et seq.; D'Ors, X., op. cit., p. 203; Gutiérrez, F., Diccionario de Derecho Romano , Editorial Reus, Madrid, 1982, p. 25; and Torrent, A., Manual de Derecho Privado Romano , Librería General, Zaragoza, 1995, p. 381.

(11) – Digest, Book XXII, Volume I, 38.4: ‘The proceeds of the actio fabiana must also be restored and therefore, in the actio pauliana , whereby the alienation of property effected in fraud of the creditors is revoked, the praetor intervenes to ensure that everything is left as if nothing was alienated, which is just, because the term ‘you will restore’, which the praetor uses in this edict, has a sufficiently broad meaning to include the restoration of the proceeds’ (Paulo 6 ad Plaut.).

(12) – A principle which the Latin maxim defines as res inter alios acta aliis neque nocere, neque prodesse potest .

(13) – Forner Delaygua, J.J. (ed.), La protección del crédito en Europa: la acción pauliana, Bosch, Barcelona, 2000, carries out a comparative analysis of the actio pauliana in the sphere of both civil law and insolvency law.

(14) – Also called a revocatory action, a term which comprises other specific actions for the restitution of assets.

(15) – The principle has a number of names and different definitions, as pointed out by Beltrán, E., ‘Artículo 49’, Rojo, A. and Beltrán, E., Comentario a la Ley Concursal , Thomson-Civitas, Pamplona, 2004, p. 990: equal treatment of creditors, pooling of losses, creditors’ settlement or proportionality. With regard to German law, see Balz, M. and Landfermann, H.-G., Die neuen Insolvenzgesetze , 2nd ed., Dusseldorf, 1999.

(16) – On French law, see Terré, F., Simler, P. and Lequette, Y., Droit Civil. Les obligations , Dalloz, 7th ed., Paris, 1999, pp. 969 to 970.

(17) – Goode, R., Principles of Corporate Insolvency Law , Sweet & Maxwell, London, 2005, pp. 411 to 413.

(18) – In Italian law, for example, Royal Decree 267/1942 amended article 708 et seq. of the Commercial Code of 1885 in order to remove the subjective requirements from insolvency proceedings. The need to prove fraud was also removed from Spanish law by Article 71 of Law 22/2003 of 9 July on insolvency.

(19) – With regard to French law, it is pertinent to cite the judgment of the Cour de cassation (commercial chamber) of 8 October 1996. Spanish law provides for the same solution and, according to academic opinion, the ordinary civil action is secondary to the action in the context of an insolvency to set a transaction aside. That is the view of León, F., ‘Artículo 71. Acciones de reintegración’, Rojo, A. And Beltrán, E., op. cit., pp. 1319 and 1320.

(20) – Case C-115/88 Reichert and Kockler [1990] ECR I-27.

(21) – Ibid, paragraph 12.

(22) – That view was confirmed in Case C-261/90 Reichert and Kockler [1992] ECR I-2149. Borrás, A., Revista Jurídica de Catalunya , 1990, p. 1133 et seq., and 1992, p. 2149, discussed both judgments. See also Forner Delaygua, J.J., ‘La acción pauliana ante el TJCE’, Revista de Instituciones Europeas , Centro de Estudios Políticos y Constitucionales, 1991, pp. 635 to 637.

(23) – Case 133/78 Gourdain [1979] ECR 733.

(24) – Ibid, paragraph 4.

(25) – Bermejo Gutiérrez, N. and Rodríguez Pineau, E., ‘Normas de protección de acreedores: entre el derecho de sociedades y el derecho concursal’, InDret , No 4, 2006, pp. 22 to 23, and Enriques, L. and Gelter, M., ‘Regulatory Competition in European Company Law and Creditor Protection’, European Business Organization Law Review , No 7, 2006, p. 440.

(26) – That has resulted in the Gourdain case-law being applied by national courts, which adapt it to each type of action in the context of an insolvency to set a transaction aside, as demonstrated by the judgments of inter alia the Tribunal de Bari, Italy, of 27 January 2004, RDIPP, 2004, pp. 1386 to 1390; the Arrondissementsrechtbank Leeuwarden of 31 May 1979; the High Court, Chancery Division (Manchester) of 5 May 2005, ILP, 2005-9, p. 552 et seq.; and the Cour de Cassation (Chambre commercial) of 24 May 2005, RCDIP, vol. 94, 2005, p. 489 et seq. In that connection, see Bermejo Gutiérrez, N. and Rodríguez Pineau, E., op. cit., pp. 22 to 23.

(27) – Judgment in Gourdain , paragraph 5.

(28) – The Convention, opened for signature in Brussels on 22 November 1995, was signed on that day by the plenipotentiaries of Belgium, Denmark, Germany, Greece, Spain, France, Italy, Luxembourg, Austria, Portugal, Finland and Sweden.

(29) – Council document No 6500/1/96 REV1 DRS (CFC).

(30) – The names of the authors of the report explains why it is usually referred to as the Virgós-Schmit Report.

(31) – Emphasis added.

(32) – On the definition of a lacuna and the use of analogy in the theory of legal argument, see Perelman Ch., (ed.), Le problème des lacunes en droit , Bruylant, Brussels, 1968, and Díez-Picazo, L., Experiencias jurídicas y teoría del derecho , Ariel, Barcelona, 1973, pp. 280 to 283.

(33) – That rule does not mean that Regulation 1346/2000 has adopted the principle of vis atractiva concursus . Paragraph 77 of the Virgós-Schmit Report confirms this, stating that: ‘Certain Contracting States recognise a “vis attractiva concursus” in their national law, by virtue of which the Court which opens the insolvency proceedings has within its jurisdiction not only the actual insolvency proceedings but also all the actions arising from the insolvency. Although the projection of this principle in the international domain is controversial, the 1982 Community Draft Convention contained a provision in Article 15 which ... was inspired by the “vis attractiva” theory. This Article conferred on the courts of the State of the opening of insolvency proceedings jurisdiction over a wide series of actions resulting from the insolvency. Neither this precept nor this philosophy has been adopted in this Convention’.

(34) – The interpretation of Article 18(2) advanced by the defendant is severely criticised by Pannen, K. (ed.), European Insolvency Regulation , De Gruyter, Berlin, 2007, p. 125. In the latter’s opinion, the draftsmen of the regulation were fully aware of the difficulties raised by actions connected with insolvency proceedings.

(35) – The defendant is supported by the Greek and Czech governments.

(36) – That view is shared by Duursma-Kepplinger, H.-C., Duursma, D. and Chalupsky, E., Europäische Insolvenzverordnung , Springer, Vienna – New York, 2002, p. 441.

(37) – In that connection, it is appropriate to cite the authoritative opinions of Virgós, M. and Garcimartín, F., Comentario al Reglamento Europeo de Insolvencia, Thomson-Civitas, Pamplona, 2003, p. 66: ‘suffice it to state that the Insolvency Regulation does not differentiate between the rules on jurisdiction and the rules on recognition/enforcement with regard to their material scope, since they were drafted as parallel rules. As a result, the range of judgments referred to in Article 25 serves to specify the matters or disputes which fall within the jurisdiction of the court seised of the insolvency proceedings’.

(38) – On the principle of the absence of lacunae, see Sánchez Lorenzo, S. and Fernández Rozas, J.C., Derecho Internacional Privado , 3rd ed., Thomson-Civitas, Pamplona, 2004, pp. 64 to 67, and Virgós, M. y Garcimartín, F., op. cit., pp. 62 and 63.

(39) – Virgós, M. and Garcimartín, F., op. cit., p. 63, cite by way of example the absurd consequences of such an approach.

(40) – However, the Gourdain judgment does not apply only to actions in the context of an insolvency to set a transaction aside. The rule laid down by the Court in Gourdain is also satisfied in disputes between the liquidator and the debtor concerning whether an asset is part of the estate in bankruptcy; disputes about the powers of the liquidator to take decisions regarding the fulfilment of contractual relationships in force; and actions for liability against liquidators.

(41) – See in that regard, Pannen, K. (ed.), op. cit., pp. 122 and 123.

(42) – Ibid., p. 124.

(43) – Paragraph 129 et seq. of the Insolvenzordnung.

(44) – Paragraph 129(1) of the Insolvenzordnung.

(45) – Paragraphs 130, 132 and 133 of the Insolvenzordnung.

(46) – That argument is capable of giving rise to quite ridiculous outcomes, since the insolvency proceedings must, without any exceptions, comply with the adversarial principle, which is an integral guarantee of the fundamental right to effective legal protection. It might be possible to argue that insolvency proceedings are different from ordinary civil proceedings, but to my mind that claim is excessively concerned with procedural matters. Insolvency proceedings are required to comply with all the legal safeguards, including the principle of the universal nature of the proceedings laid down in Regulation 1346/2000.

(47) – In addition to Regulation 1346/2000, that body of law includes Directive 2001/17/EC of the European Parliament and of the Council of 19 March 2001 on the reorganisation and winding-up of insurance undertakings (OJ 2001 L 110, p. 28); Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems (OJ 1998 L 166, p. 45); Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 on the reorganisation and winding-up of credit institutions (OJ 2001 L 125, p. 15); and Directive 2002/47/EC of the European Parliament and of the Council of 6 June 2002 on financial collateral arrangements (OJ 2002 L 168, p. 43).

(48) – Recital 8 in the preamble to Regulation 1346/2000 states that it is necessary ‘to achieve the aim of improving the efficiency and effectiveness of insolvency proceedings having cross-border effects’. That aim is repeated in recital 16.

(49) – As the regulation intimates, forum shopping, is not a completely unlawful practice. The Community legislation counters the opportunistic and fraudulent use of the right to choose a forum, which is very different to the demonisation for the sake of it of a practice which on occasions it is appropriate to encourage. I argued as much in my opinion in Case C-1/04 Staubitz-Schreiber [2006] ECR I-701, paragraphs 70 to 77.

(50) – Westbrook, J.L., ‘A Global Solution to Multinational Default’, Michigan Law Review , vol. 98, 2000, p. 2313 et seq.; and, in the same volume, Guzmán, A., ‘International Bankruptcy: in Defence of Universalism’, p. 2186 et seq.

(51) – In the judgment in Case C-1/04 Staubitz-Schreiber , paragraphs 25 and 26, a case concerning the universal nature of the rules on international jurisdiction in Regulation 1346/2000, the Court confirmed that view, holding that the regulation seeks ‘to avoid incentives for the parties to transfer assets or judicial proceedings from one Member State to another, seeking to obtain a more favourable legal p osition. That objective would not be achieved if the debtor could move the centre of his main interests to another Member State between the time when the request to open insolvency proceedings was lodged and the time when the judgment opening the proceedings was delivered and thus determine the court having jurisdiction and the applicable law. Such a transfer of jurisdiction would also be contrary to the objective, stated in the second and eighth recitals in the preamble to the Regulation, of efficient and effective cross-border proceedings, as it would oblige creditors to be in continual pursuit of the debtor wherever he chose to establish himself more or less permanently and would often mean in practice that the proceedings would be prolonged’.

(52) – Section IV, paragraphs 2 and 3 of the Greek Government’s observations, and Section 4.2, paragraph 16 of the Czech Government’s observations.

(53) – Judgment in Staubitz-Schreiber , paragraph 28.

(54) – Although there are conflicting definitions of insolvency proceedings, some of which refer to the realisation of assets and others to the preservation of assets, I agree with certain academic legal writers who argue that the two types of proceedings have a common denominator, namely, ‘the attainment of an ideal of justice’ as Bermejo Gutiérrez, N. Créditos y quiebra, Civitas, Madrid, 2002, pp. 467 to 468, suggests.

(55) – Virgós, M. y Garcimartín, F., op. cit., pp. 69 to 71.

(56) – Emphasis added.

(57) – Pannen, K., op. cit., pp. 329 and 330, and the Virgós-Schmit Report, paragraph 167 et seq.

(58) – Needless to say, should the Court overturn the Gourdain case-law, it follows that when it gives judgment in these proceedings it must sit as the Grand Chamber.