CJEC, February 22, 1979, No 133-78

THE COURT

1 By an order of 22 May 1978 which was received at the court registry on 12 June 1978 the bundesgerichtshof (federal court of justice), pursuant to the protocol of 3 june 1971 on the interpretation of the convention of 27 september 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters (hereinafter referred to as ' ' the convention ' '), referred to the court of justice for a preliminary ruling a question on the interpretation of subparagraph 2 of the second paragraph of article 1 which provides that the convention shall not apply to ' ' bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings ' '.

2 This question has been referred to the court following an order by the cour d ' appel, paris, dated 15 march 1976, which ordered the de facto manager of a french company, in respect of which there had been a previous declaration that the conditions existed for a ' ' liquidation des biens ' ', to bear a part of the company ' s debts pursuant to article 99 of the french law no 67-563 of 13 july 1967 on the ' ' reglement judiciare ' ', the ' ' liquidation des biens ' ', the ' ' faillite personnelle ' ' and ' ' banqueroutes ' '. The ' ' syndic ' ' of the said company has applied for leave to enforce the order in the federal republic of germany submitting that it relates to a special case concerning civil liability which falls within the field of application of the first paragraph of article 1 of the convention.

The oberlandesgericht (higher regional court) frankfurt, before the matter was brought before the bundesgerichtshof, refused an application for leave by way of exequatur to enforce the order on the grounds that the order in personam under article 99 of the french law, which is not known in the german legal system, did not come within the scope of decisions in civil and commercial matters covered by the convention but was part of the proceedings for the ' ' liquidation des biens ' '.

It is in these circumstances that the bundesgerichtshof has referred to the court the following question:

' ' Is a judgment given by french civil courts on the basis of article 99 of the french law no 67-563 of 13 july 1967 against the de facto manager of a legal person for payment into the assets of a company in liquidation to be regarded as having been given in bankruptcy proceedings, proceedings relating to the winding-up of insolvent companies or other legal persons and analogous proceedings (subparagraph 2 of the second paragraph of article 1 of the convention) or is such a judgment a decision given in a civil and commercial matter (first paragraph of article 1 of the convention)?

' '

3 The convention, the particular aim of which is to secure the simplification of formalities governing the reciprocal recognition and enforcement of judgments of courts and tribunals and to strengthen in the community the legal protection of persons who are established there has laid down as a matter of principle that its scope includes ' ' civil and commercial matters ' ' without however defining this expression.

However because of the special nature of certain matters and of the profound differences between the laws of the contracting states the convention does not apply to certain fields including ' ' bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings ' ' without the meaning of these concepts being defined either.

As article 1 serves to indicate the scope of the convention it is necessary, in order to ensure, as far as possible, that the rights and obligations which derive from it for the contracting states and the persons to whom it applies are equal and uniform, that the terms of that provision should not be interpreted as a mere reference to the internal law of one or other of the states concerned.

By providing that the convention shall apply ' ' whatever the nature of the court or tribunal ' ' the first paragraph of article 1 shows that the concept of ' ' civil and commercial matters ' ' cannot be interpreted solely in the light of the division of jurisdiction between the various types of courts existing in certain states.

The concepts used in article 1 must be regarded as independent concepts which must be interpreted by reference, first, to the objectives and scheme of the convention and, secondly, to the general principles which stem from the corpus of the national legal systems.

4 As far as concerns bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings, according to the various laws of the contracting parties relating to debtors who have declared themselves unable to meet their liabilities, insolvency or the collapse of the debtor ' s creditworthiness, which involve the intervention of the courts culminating in the compulsory ' ' liquidation des biens ' ' in the interest of the general body of creditors of the person, firm or company, or at least in supervision by the courts, it 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 ' '.

In order to answer the question referred to the court by the national court it is therefore necessary to ascertain whether the legal foundation of an application such as that provided for in article 99 of the french law is based on the law relating to bankruptcy and winding-up as interpreted for the purposes of the convention.

5 The application under article 99, called an application to make good a deficiency in the assets, for which special provision is made in a law on bankruptcy and winding-up is made only to the court which made the order for the ' ' reglement judiciaire ' ' or the ' ' liquidation des biens ' '.

It is only the ' ' syndic ' ' - apart from the court which can make the order of its own motion - who can make this application on behalf of and in the interest of the general body of creditors with a view to the partial reimbursement of the creditors by respecting the principle that they rank equally and by taking account of any preferential rights lawfully acquired.

In this application, which derogates from the general rules of the law of liability, the de jure or de facto managers of the company are presumed to be liable and they can only discharge this burden by proving that they managed the affairs of the company with all the requisite energy and diligence.

The period of limitation of three years for the application runs from the date when the final list of claims is drawn up and is suspended for the duration of any scheme of arrangement which may have been entered into and begins to run again if such a scheme is terminated or declared void.

If the application directed against the manager of the company succeeds it is the general body of creditors which benefits, some assets being added to the funds to which they are entitled, as happens where the ' ' syndic ' ' establishes a claim which benefits the general body of creditors.

Furthermore, the court may order the ' ' reglement judiciaire ' ' or the ' ' liquidation des biens ' ' of those managers who have been made responsible for part or all of the liabilities of a legal person and who do not discharge the said liabilities, without having to verify whether the said managers are business men and whether they are unable to meet their liabilities.

6 It is quite apparent from all these findings that the legal foundation of article 99, the object of which, in the event of the winding-up of a commercial company, is to go beyond the legal person and proceed against its managers and their property is based solely on the provisions of the law of bankruptcy and winding-up as interpreted for the purpose of the convention.

A decision such as that of a french civil court based on article 99 of the french law no 67-563 of 15 july 1967 ordering the de facto manager of a legal person to pay a certain sum into the assets of a company must be considered as given in the context of bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons or analogous proceedings within the meaning of subparagraph 2 of the second paragraph of article 1 of the convention.

Costs

7 The costs incurred by the commission of the european communities and by the government of the federal republic of germany, which have submitted observations pursuant to article 20 of the protocol on the statute of the court of justice of the eec, are not recoverable.

As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the bundesgerichtshof, the decision as to costs is a matter for that court.

On those grounds,

The court,

In answer to the question referred to it by the bundesgerichtshof by an order of 22 may 1978, hereby rules:

A decision such as that of a french civil court based on article 99 of the french law no 67-563 of 15 july 1967, ordering the de facto manager of a legal person to pay a certain sum into the assets of a company must be considered as given in the context of bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons or analogous proceedings within the meaning of subparagraph 2 of the second paragraph of article 1 of the convention.