European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

Pursuant to Article 33 of Regulation No 2015/848, any “Member State may refuse to recognize insolvency proceedings opened in another Member State or to enforce a judgment handed down in the context of such proceedings where the effects of such recognition or enforcement would be manifestly contrary to that State's public policy, in particular its fundamental principles or the constitutional rights and liberties of the individual”. 

According to the Court of Justice, case law relating to the application of Article 45(1) of Regulation No 1215/2012 on the public policy clause may be transposed as part of the interpretation of Article 33 of Regulation No 2015/848: the public policy clause can only be used in exceptional cases , i.e. where recognition is at variance to an unacceptable degree with the legal order of the State in which recognition is sought and constitutes a breach of a fundamental principle, such as the right to be heard, which a person concerned by such proceedings enjoys . Now, all restrictions to the right of creditors to participate in proceedings in accordance with the equality of arms principle, insofar as they are liable to entail a refusal of recognition, must be duly justified and surrounded by procedural guarantees ensuring that persons concerned by such proceedings actually have the opportunity to challenge the measures adopted in urgency .

Regulation No 1346/2000 provided that Member States were not obliged to recognize or enforce a judgment which concerns the course and closure of insolvency proceedings which might result in a limitation of the personal freedom or postal secrecy. This second ground of refusal has not been maintained under Regulation No 2015/848.

As part of the application of Regulation No 44/2001, see Case C-78/95 Hendrikman and Feyen v Magenta Druck & Verlag [1996] ECR I-4943, LawLex200900001176JBJ.

Case C-341/04 Eurofood IFSC [2006] ECR I-3813, LawLex200900000401JBJ. By contrast, the non-hearing of staff representatives before the decision opening the insolvency proceedings is taken cannot justify a refusal to recognize that judgment under the public policy clause where it does not constitute a manifest breach of the fundamental right to be heard which any person concerned by these proceedings enjoys.

Case C-341/04 Eurofood IFSC [2006] ECR I-3813, LawLex200900000401JBJ.

386. Grounds for non-recognition