ERSTE Bank Hungary Nyrt v Magyar Állam and Others.
Date: 2012-07-05
33. It should also be observed that it follows from Articles 16(1) and 17(1) of the Regulation that the judgment opening insolvency proceedings in a Member State is to be recognised in all the other Member States from the time that it becomes effective in the State of the opening of proceedings and that it is, with no further formalities, to produce the same effects in any other Member State as under the law of the State of the opening of proceedings (Case C-444/07 MG Probud Gdynia  [2010] ECR I-417, paragraph 26).
34. As is shown by recital 22 in the preamble to the Regulation, the rule of priority laid down in Article 16(1) thereof is based on the principle of mutual trust. It is indeed that mutual trust which has enabled not only the establishment of a compulsory system of jurisdiction which all the courts within the purview of the Regulation are required to respect, but also as a corollary the waiver by the Member States of the right to apply their internal rules on recognition and enforcement in favour of a simplified mechanism for the recognition and enforcement of judgments handed down in the context of insolvency proceedings (Case C-341/04 Eurofood IFSC  [2006] ECR I-3813, paragraphs 39 and 40, and MG Probud Gdynia , paragraphs 27 and 28).
38. Article 4(1) of the Regulation then lays down the rule that the determination of the court with jurisdiction entails determination of the law which is to apply. According to that provision, as regards both the main insolvency proceedings and secondary insolvency proceedings, the law of the Member State within the territory of which proceedings are opened ( lex concursus ) is applicable to the insolvency proceedings and their effects (see, to that effect, Eurofood IFSC , paragraph 33; MG Probud Gdynia , paragraph 25; and Case C-191/10 Rastrelli Davide e C. [2011] ECR I-13209, paragraph 16). As stated in Recital 23 in the preamble to the Regulation, that law governs all the conditions for the opening, conduct and closure of the insolvency proceedings.
40. Thus, as regards rights in rem, Article 5(1) of the Regulation states that the opening of insolvency proceedings does not affect the rights in rem of creditors or third parties in respect of assets belonging to the debtor which are situated within the territory of another Member State at the time of the opening of proceedings.
41. The scope of that provision is clarified by recitals 11 and 25 in the preamble to the Regulation, according to which there is a need for a special reference ‘diverging from the law of the opening State’ in the case of rights in rem, since these are of considerable importance for the granting of credit. Thus, according to recital 25, the basis, validity and extent of such a right in rem should therefore normally be determined according to the lex situs  and not be affected by the opening of insolvency proceedings.
42. Therefore, Article 5(1) of the Regulation must be understood as a provision which, derogating from the rule of the law of the State of the opening of the proceedings, allows the law of the Member State on whose territory the asset concerned is situated to be applied to the right in rem of a creditor or a third party over certain assets belonging to the debtor.