Vol 11 (2014) - Issue 3

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Christian Van Buggenhout and Ilse Van de Mierop, acting as liquidators in the insolvency of Grontimmo SA, C-251/12, CJEU (19 September 2013)

Introduction
In the recent decision of Christian Van Buggenhout and Ilse Van de Mierop v Banque Internationale a Luxembourg SA, the Court of Justice of the European Union (the 'CJEU') was asked to determine the scope of Article 24(1) of Regulation (EC) No 1346/2000 of May 2000 on insolvency proceedings (OJ 2000 L 160, p. 1) (the 'Regulation'). In particular, whether Article 24(1) must been interpreted as meaning that a payment made on the order of a debtor subject to insolvency proceedings, to one of its creditors, falls within the scope of that provision.

The relevant statutory provisions
Recitals 4, 23 and 30 in the preamble to the Regulation state:
'(4) It is necessary for the proper functioning of the internal market to avoid incentives for the parties to transfer assets or judicial proceedings from one Member State to another, seeking to obtain a more favourable legal position (forum shopping).
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(23) This Regulation should set out, for the matters covered by it, uniform rules on conflict of laws which replace, within their scope of application, national rules of private international law. Unless otherwise stated, the law of the Member State of the opening of the proceedings should be applicable (lex concursus) …
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(30) It may be the case that some of the persons concerned are not in fact aware that proceedings have been opened and act in good faith in a way that conflicts with the new situation. In order to protect such persons who make a payment to the debtor because they are unaware that foreign proceedings have been opened when they should in fact have made the payment to the foreign liquidator, it should be provided that such a payment is to have a debt-discharging effect.'
Article 24 of the Regulation provides:
'1. Where an obligation has been honoured in a Member State for the benefit of a debtor who is subject to insolvency proceedings opened in another Member State, when it should have been honoured for the benefit of the liquidator in those proceedings, the person honouring the obligation shall be deemed to have discharged it if he was unaware of the opening of proceedings.
2. Where such an obligation is honoured before the publication provided for in Article 21 has been effected, the person honouring the obligation shall be presumed, in the absence of proof to the contrary, to have been unaware of the opening of insolvency proceedings; where the obligation is honoured after such publication has been effected, the person honouring the obligation shall be presumed, in the absence of proof to the contrary, to have been aware of the opening of proceedings.'

Factual background
The case revolves around the insolvency of Grontimmo SA ('Grontimmo'), a property development company, with its registered office in Antwerp (Belgium). Prior to the opening of insolvency proceedings in relation to Grontimmo, the company acquired a purchase option for EUR 1,400,000 issued by Kostner Development Inc. ('Kostner'). On 2 June 2006, Grontimmo’s directors gave Dexia Banque International a Luxembourg ('BIL') a written order to issue a cheque for EUR 1,400,000 for the benefit of Kostner.