INSOLVENCY — Foreign proceedings — Payments made during insolvency — Insolvent debtor in first member state requesting bank in second member state make payment to creditor — Bank unaware of insolvency proceedings and making payment day after judgment given in first member state divesting debtor of assets — Whether payment “for the benefit” of debtor such that bank deemed to have discharged obligation — Whether bank liable to make repayment — Council Regulation (EC) No 1346/2000, art 24(1) Van Buggenhout and another v Banque Internationale à Luxembourg SA (Case C-251/12); [2013] WLR (D) 353 ECJ: President of the Chamber M Ilešič (Rapporteur), Judges E Jarašiūnas, A Ó Caoimh, C Toader, C G Fernlund: 19 September 2013 A payment made at the behest of debtor subject to insolvency proceedings to one of the latter’s creditors did not fall within the scope of article 24(1) of Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings. That provision enabled a person who honoured an obligation “for the benefit of” a debtor, who was subject to insolvency proceedings opened in another member state , when it should have been honoured for the benefit of the liquidator, to be deemed to have discharged it if he was unaware of the opening of proceedings. The Court of Justice of the European Union so held on a reference from the Commercial Court, Brussels, Belgium, in proceedings between the claimants, Christian Van Buggenhout and Ilse Van de Mierop, acting as liquidators in the insolvency of Grontimmo SA and the defendant, Banque Internationale à Luxembourg SA, concerning whether or not the liquidators, who were appointed in Belgium insolvency proceedings, were entitled to an order that the defendant bank, which traded in Luxembourg, transfer back a payment it had made to one of Grontimmo’s creditors on 5 July 2006 because that payment was made after the commencement of insolvency proceedings in Belgium. The judgment divesting the claimant of its assets was given on 4 July 2006 and had been published in the Moiteur Belge on 14 July. It was not published in the Journal Officiel du Grand-Duché de Luxembourg. In those circumstances the Belgian court asked the Court of Justice of the European Union whether article 24(1) of the Regulation applied to a payment made on the order of a debtor subject to insolvency proceedings to one of its creditors. THE COURT ruled that according to the ordinary meaning of the expression “for the benefit of” honouring an obligation within the meaning of article 24(1) of Council Regulation EC No 1346/2000, “for the benefit of” a person subject to insolvency proceedings did not, prima facie, cover the situation in which an obligation was honoured on the order of that person for the benefit of one of its creditors. That according to other language versions of that Regulation meant only that an obligation was honoured in favour of that person. Article 24(1) concerned the debts of the insolvent debtor which became the debts of the general body of creditors after the opening of insolvency proceedings. It was therefore the debtors of the insolvent debtor who honoured an obligation that were protected by article 24(1). A bank which fulfilled an obligation contracted with regard to the insolvent debtor had not honoured that obligation “for the benefit of” the debtor, since the debtor was not in receipt of payment. Appearances: Messrs Van Buggenhout and Van de Mierop, acting as liquidators in the insolvency of Grontimmo SA, by themselves and by C Dumont de Chassart, V Horsmans for Banque Internationale à Luxembourg SA, M Grégoire, M Jacobs, L Van den Broeck and J -C Halleux, agents, for the Belgian Government, J Kemper and T Henze, agents, for the German Government, G de Bergues and B Beaupère‑Manokha, agents for the French Government, L Inez Fernandes and S Duarte Afonso, agents, for the Portuguese Government, M Wilderspin, agent, for the European Commission. Reported by: Susanne Rook, Barrister.
Posted on: Wed, 25 Sep 2013 11:10:26 +0000
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