C-133/78

on the interpretation of subparagraph 2 of the second paragraph of Article 1 of the said Convention which provides that the said Convention shall not apply to bankruptcy and proceedings relating to the winding-up of insolvent companies or other legal persons.

THE COURT

composed of: H. Kutscher, President, J. Mertens de Wilmars and Lord Mackenzie Stuart (Presidents of Chambers), A. M. Donner, P. Pescatore, M. Sørensen, A. O'Keeffe, G. Bosco and A. Touffait, Judges,

Advocate General: G. Reischl

Registrar: A. Van Houtte

gives the following

which is to carry on the business of jurisdiction and enforcement of manufacturing handling equipment had judgments in civil and commercial as its manager a Mr Nadler. matters of 27 September 1968, the applicant, Mr Gourdain applied to the In order to market its products in France Landgericht [Regional Court] Limburg it formed in 1968 a subsidiary company for leave to enforce the order of the with limited liability under the name of Cour d'Appel, Paris, in the Federal Fromme France Manutention having a Republic of Germany. share capital of 2 500 shares of which it The President of the Landgericht owned 2 490. Limburg by an order of 22 April 1977 As a result of the winding-up of the granted this application subject to certain German company the French company terms but the Oberlandesgericht [Higher found itself in a critical financial Regional Court] Frankfurt, by an order of 7 September 1977, set aside this situation and the court in a judgment of decision as it considered that the order 7 March 1974, which was upheld on under Article 99 of the French Law of 13 appeal, declared that the conditions July 1967 against Mr Nadler in personam existed for the "liquidation des biens as the de facto manager of a commercial [winding-up of the affairs of a person, company whose affairs are being wound firm or company not expected to up "is not a decision in a civil and continue in business]"<appnote>1</appnote> of the French commercial matter but must be regarded company, the date when it declared itself from points of view which overlap as unable to meet its liabilities being 21 forming part of the winding-up, since September 1973. Mr Gourdain was such an order, which is not known in the appointed "syndic [liquidator or trustee German legal system, has its basis in the for the creditors]"<appnote>1</appnote> and Mr Nadler was winding-up of the trading company regarded as de facto manager and concerned and is part and parcel of the deprived of his right to direct, manage, winding-up proceedings, even if it was conduct or supervise any commercial the outcome of contentious civil law

Bundesgerichtshof, before which the mitted pursuant to Article matter was brought has to give depends 20 of the Protocol on the upon the interpretation of the first Statute of the Court of paragraph of Article 1 and of subpara- Justice of the EEC graph 2 of the second paragraph of Article 1 of the Convention which does A — Written observations of the not apply to bankruptcy, proceedings "syndic", Mr Gourdain, the relating to the winding-up of insolvent appellant in the main action companies or other legal persons, judicial It is Mr Gourdain's view that if in arrangements, compositions and anal- ogous proceedings. winding-up proceedings a French civil court orders the manager of a legal It is in these circumstances that by an person, pursuant to Article 99, to pay a order dated 22 May 1978 the Bundes- certain sum into the assets of the gerichtshof referred to the Court of company, that is a decision concerning a Justice for a preliminary ruling the civil and commercial matter within the

particular type of action for a declaration second paragraph of Article 1 of the as to liability (Schmidt KTS 1976 p. 18). Convention) or is such a judgment a decision given in a civil and commercial The question whether such investigation matter (first paragraph of Article 1 of the into the winding-up in order to find out Convention)?" who was responsible is not determined in the context of proceedings by the general The order of the Bundesgerichtshof was body of creditors before the "juge entered at the Court Registry on 12 June

action, by Dr. G. Bebr, acting as Agent, It will not be possible for the European on behalf of the Commission of the Convention on bankruptcy, proceedings European Communities and by relating to the winding-up of insolvent M. W. Holtgrave, acting as Agent, on companies or other legal persons, judicial behalf of the Government of the Federal arrangements, compositions and anal- Republic of Germany. 1 — See Note 1, p. 735.

Although it is true that investigation into question as formulated would lead to the the winding-up in order to ascertain the actual application of the law whereas the Court's only task is to "determine in the person responsible has a causal abstract the content of Community law connexion with the winding-up of the by way of interpretation". company it is founded on a system of special liability which falls within general Secondly and -in the alternative he civil and commercial law. It is an requests the Court in answer to the additional liability for the debts of the question referred to it to rule that the company and the only connexion with Convention does not apply to court

action. All these considerations lead to the conclusion that the action must be in so far as they fit into the general classified as an action concerning a civil pattern of bankruptcy and winding-up or commercial matter. within the meaning of subparagraph 2 of Mr Gourdain therefore submits that the the second paragraph of Article 1 of the Convention. question referred to the Court be answered as follows: The respondent in the main action points If during winding-up proceedings, a out that, so long as the proposed French civil court orders the de facto European Convention on bankruptcy, manager of a legal person, pursuant to winding-up, arrangements, compositions Article 99 of the French Law of 13 July and similar proceedings has not come 1967, to pay a certain sum into the assets into being, subparagaph 2 of the second of a company, its order is a decision in a paragraph of Article 1 of the Convention civil and commercial matter within the on enforcement must be interpreted with reference to the specific features which meaning of the first paragraph of Article 1 of the Convention. are peculiar to insolvency proceedings. In proceedings for the "liquidation des B — Written observations ofMr Nadler, biens" all measures taken by the "syndic" for the purposes of drawing-up the respondent in the main action the statement of the company's affairs of First the respondent in the main action necessity form an integral part of the requests the court to "set aside the order said proceedings.

C — Written observations of the Similar pre-existing rights, which are not Commission only derived from the rules applicable to the "liquidation des biens" must be The Commission takes the view that the enforced by the "syndic" before the Convention must be regarded as forming ordinary civil and commercial courts. part of the general agreements and as The purpose of exercising rights of this such must in case of doubt be given a kind pertaining to assets is not to draw wide interpretation and that in up the list of assets but to realise them consequence the exceptions specified forthwith with a view to the ultimate therein must be interpreted strictly "by satisfaction(pro rata) of the creditors. referring, first, to the objectives and The fact that the "syndic" embarks on scheme of the Convention and, secondly, the legal enforcement of these rights in to the general principles which stem from the place of the insolvent person, firm or the corpus of the national legal systems" company does not transform such (Case 29/76 LTU Lufttransportunter- actions into proceedings in "bankruptcy" nehmen GmbH & Co KG v Eurocontrol or "relating to the winding-up of [1976] 2 ECR 1541, at p. 1551, insolvent companies or other legal paragraph 3 of the decision; Case 43/77, persons" within the meaning of subpara- Industrial Diamond Supplies v Luigi Riza graph 2 of the second paragraph of [1977] ECR 2175, at p. 2188, paragraph Article 1 of the Convention on 28 of the decision). enforcement. The ultimate objective of excluding The application brought pursuant to "bankruptcy, proceedings relating to the Article 99 of the French Law of 13 July winding up of insolvent companies or 1967 is based solely on legal provisions other legal persons, judicial applicable to the "liquidation des biens". arrangements, compositions and It can only be made by the "syndic" and analogous proceedings" is to get a it is used for the purpose of making simple, centralized procedure which good, in the interests of the creditors, produces its effects in all the Contracting the deficiency between assets and States and, as far as concerns the liabilities caused by the officers of the recognition of the enforcement of

is that the application provided for in "The decision of a French court based

Article 99 of the French Law of 13 July on Article 99 of the French Law No

1967 does not appear among those 67-563 of 13 July 1967 which orders the proceedings to which the future de facto manager of a legal person to pay Convention on bankruptcy and a certain sum of money into the assets of winding-up is to be applied. a company is a decision in a civil and commercial matter within the meaning of There is confirmation of this interpret- Article 1 of the Convention on ation in Article 61 of the Preliminary jurisdiction and the enforcement of Draft of a Convention on bankruptcy judgments in civil and commercial and winding-up which provides that the matters and there are no grounds for "syndic" may bring actions concerning regarding it as having been given in liability in order to defend the rights of bankruptcy, winding-up or analogous the general body of creditors and proceedings." expressly provides that these actions fall within the field of application of the general Convention. Moreover this D — Written observations of the interpretation is confirmed by the Government of the Federal objective of Article 99 of the French Republic of Germany Law. The Government of the Federal Republic A comparison with Article 100 shows of Germany is of the opinion that, that the "syndic" must first make an according to the principles which the application, pursuant to Article 99, for Court of Justice laid down in Case 29/76 compensation for the damage suffered by LTU Lufttransportunternehmen GmbH & the company to be paid by the managers Co KG v Eurocontrol [1976] 2 ECR

1541, at p. 1550, paragraph 3 of the would prove an appreciable obstacle to decision, the concepts "bankruptcy, legal proceedings on national territory, proceedings relating to the winding-up which could not be accepted without a of insolvent companies or other legal specific foundation in law, and to an persons, judicial arrangements, com- encroachment on the sovereign powers positions and analogous proceedings" of the State which has to recognize the used in subparagraph 2 of the second decision. This is why several Member paragraph of Article 1 of the Convention States have so far objected to the on enforcement can be independently recognition of the effects which a interpreted directly on the basis of the general enforcement in other countries objectives and scheme of the Convention must have in their own territory. without taking into consideration the law The delimitation of the basic proceedings of one of the Member States concerned. in bankruptcy and winding-up is This is the only appropriate method for indicated in the Jenard report and in the obtaining an effective interpretation of case of France, in the Schlosser report. the concept "analogous proceedings". Furthermore it is only in this way that The recognition of individual decisions any uninterrupted link can be maintained made in the basic bankruptcy or between the Convention on enforcement winding-up proceedings in another and the Convention on bankruptcy and Member State is meaningless unless the winding-up which the Member States are Member State which has to recognize at the present time preparing and them also recognizes the bankruptcy or likewise it is only in this way that the winding-up in its entirety. That is the

bankruptcy and hence falling within the scope of the Bankruptcy Convention of enforcement was drawn up so as not to the European Economic Community" anticipate the preparatory work on a (Jenard Report, Chapter III, IV, B). This Community convention on bankruptcy interpretation is also supported inter alia and winding-up. Articles 12 and 61 of by the fact that Article 27 of the the Preliminary Draft of a Convention Convention on enforcement does not on bankruptcy and winding-up read contain any provision which, in the case together prove that the latter is to be of judgments given in the context of applied, the Convention on execution bankruptcy or winding-up proceedings in only applying in so far as specific connexion with a particular application reference is made to its application.

on property situated in national territory that the object of the procedure provided

GOURDAIN NADLER

for in that Law, in the event of the field of application of the Convention on winding-up of a commercial company, is enforcement. Having regard to the in fact to "go beyond the legal person existing wording of the texts it can only and proceed against its managers, even if be enforced in the other Member States

they are not themselves business men, in of the Community by virtue of general order to penalize them for their misman- principles or, if any there be, on the basis agement and in any case in order to of bilateral agreements concluded make possible a larger distribution to the between Member States, since it can only creditors" (Aubouin). be enforced on a multilateral basis after

Thus the "liquidation des biens" exerts the European Convention on bankruptcy in general its influence on this procedure and winding-up enters into force. which enables the de facto manager's The question referred for a preliminary property to be added to the assets of the ruling by the Bundesgerichtshof should insolvent company. therefore be answered as follows:

It is with this in view that Article 12 of "Decisions founded on Article 99 of the

JUDGMENT OF 22. 2. 1979 — CASE 133/78

and winding-up proceedings: it is the The Commission of the European bankruptcy or winding-up which is the Communities answered the questions put cause of the claim against the company by the Court. which in turn is the cause of the

application concerning liability provided The Advocate General delivered his for in Article 99 of the French Law. opinion on 7 February 1979.

Decision

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 "règlement judiciare", the "liquidation des biens", the "faillite personnelle" <apnote>1</apnote> and "banqueroutes".<apnote>1</apnote> The "syndic" <apnote>1</apnote> 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.

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.

JUDGMENT OF 22. 2. 1979 — CASE 133/78

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.

GOURDAIN NADLER

Furthermore, the court may order the "règlement 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.

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

OPINION OF MR REISCHL — CASE 133/78

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.

Mr President, apparently since 1971 — also managing Members of the Court, director of the French company, was as In March 1974 proceedings were begun de facto manager of the French company for the winding-up of the French limited made a party to the proceedings for the liability company "Fromme France winding-up of that company. This was Manutention", Paris, after the German done pursuant to French Law No 67-753 parent company had become insolvent. of 13 July 1967 on the "règlement judicaire [administration of the affairs of The applicant and appellant on a point of law in the main proceedings, in which an insolvent person, firm or company the present request for a preliminary expected to continue in business under ruling originated, was appointed "syndic the supervision of the court]",<apnote>2</apnote> the [liquidator or trustee for the creditors]".<apnote>2</apnote> "liquidation des biens [the winding-up of Since the assets of the French company an insolvent person, firm or company not were not sufficient to pay its debts, in expected to continue in business]",<apnote>2</apnote> the June 1974, on application by the "faillite personnelle [mandatory or "syndic", the defendant and respondent optional deprivation or prohibition by the Court of the exercise of rights on a point of law in the main action, who had been managing director of the required to carry on business when the German parent company and — 2 — Translator's note. The English terms given do not purport to be exact equivalents of the French terms, since concepts in the different legal systems are not 1 — Translated from the German. identical.