Initiative of the Federal Republic of Germany and the Republic of Finland with a view to the adoption of a Council Regulation on insolvency proceedings, submitted to the Council on 26 May 1999
C 221/8 EN Official Journal of the European Communities 3. 8. 1999 II (Preparatory Acts) COUNCIL INITIATIVE of the Federal Republic of Germany and the Republic of Finland with a view to the adoption of a Council Regulation on insolvency proceedings, submitted to the Council on 26 May 1999 (1999/C 221/06) THE COUNCIL OF THE EUROPEAN UNION, seeking to obtain a more favourable legal position (áforum shoppingí); Having regard to the Treaty establishing the European Community, and in particular Article 61(c) and Article 67(1) thereof, Having regard to the initiative of Germany and Finland, Having regard to the opinion of the European Parliament (1), Having regard to the Opinion of the Economic and Social Committee (2), whereas: (1) The European Union has set out the aim to establish an area of freedom, secuity and justice; (2) The proper functioning of the internal market necessitates an improvement insolvency proceedings with cross-border implications and this Regu- to achieve this lation needs to be adopted in order objective; to and speeding up of (3) This objective comes within the scope of judicial coop- eration in civil matters within the meaning of Article 65 of the Treaty; (4) Undertakings’ activities have more and more cross-border effects and are therefore increasingly being regulated by Community law. While the failure of such undertakings also affects the proper functioning of the internal market, there is a need for a Community act which permits coor- to be taken regarding an dination of insolvent debtor’s assets; the measures (6) These objectives cannot sufficient level Community level is therefore justified; at national degree therefore be achieved to a action at and (7) In accordance with the principle of proportionality the Regulation is confined to provisions governing jurisdiction for opening insolvency proceedings and for judgments which are delivered directly on the basis of the insolvency connected with such proceedings closely proceedings. contains provisions regarding the recognition of these judgments and the law applicable, which also satisfy that principle; and are In the Regulation addition, legal persons, (8) Insolvency proceedings relating to the winding-up of insolvent companies or other judicial arrangements, compositions and analogous proceedings the 1968 Brussels are excluded from the scope of Convention on Jurisdiction and the Enforcement of as Judgments amended by the Conventions on Accession to this Convention (4); and Commercial Matters (3), in Civil (9) To achieve the aim of improving and accelerating insolvency proceedings having cross-border effects, it is necessary and appropriate that the provisions on juris- diction, recognition and applicable law in this area be contained in a Community law measure which is binding and directly applicable in Member States; (10) This Regulation applies the debtor equally to all proceedings, whether is a natural person or a legal person, a trader or an individual. Insolvency proceedings concerning insurance undertakings, credit institutions, investment undertakings holding funds or securities for third parties and collective investment undertakings are excluded from the scope of this Regulation. Such under- (5) 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, (1) Opinion delivered on. (not yet published in the Official Journal) (2) Opinion delivered on. (not yet published in the Official Journal) (3) OJ L 299, 31. 12. 1972, p. 32. (4) OJ L 204, 2. 8. 1975, p. 28. OJ L 304, 30. 10. 1978, p. 1. OJ L 388, 31. 12. 1982, p. 1. OJ L 285, 3. 10. 1989, p. 1. OJ C 15, 15. 1. 1997, p. 1. 3. 8. 1999 EN Official Journal of the European Communities C 221/9 takings are not covered by the Regulation since they are subject to special arrangements and, to some extent, the national supervisory authorities have extremely wide- ranging powers of intervention; this background, (11) The Regulation acknowledges the fact that as a result of widely differing laws on property it is scarcely possible to introduce insolvency proceedings with universal scope in the entire Community. The application without exception of the law of the State of opening of proceedings would, against frequently lead to difficulties. for example, to the widely differing laws This applies, on preservation to be found in the Community. Furthermore, the preferential claims made by individual creditors in the insolvency proceedings are also, in some cases, completely different. The Regulation tries to take account of this in two different ways. On the one hand, provision is made for special references in the case of particularly significant rights and legal relationships (e. g. rights in rem and contracts of employment). On the other hand, national proceedings covering only assets situated in the State of opening are also allowed alongside main insolvency proceedings with universal scope; (12) A parallelism between main insolvency proceedings - recognised in other Member States - and secondary proceedings - enabling creditors in another Member State to invoke a local instrument in order to safeguard centralisation. their the main Mandatory in the proceedings Community; coordination with the need for unity interests - avoids rules of guarantee over-rigid (13) Insolvency proceedings may be opened in the Member the centre of his main State where the debtor has interests. Main insolvency proceedings have universal scope, they aim at encompassing all the debtor’s assets on a worldwide basis and at affecting all creditors, wherever located. The centre of main interests is taken as meaning a place with which a debtor regularly has very close contacts, in which his manifold commercial interests are concentrated and in which the bulk of his assets is for the most part situated. The creditor is also very familiar with that place; (14) The rules of jurisdiction set out in this Regulation is to say, establish only international they designate the Member State the courts of which may open insolvency proceedings. Territorial jurisdiction within that Member State must be established by the national law of the Member State concerned; jurisdiction, that (15) The rule on international jurisdiction in Article 3(1) enables the court having jurisdiction to open main insolvency proceedings to order provisional and protective measures to open time of proceedings. Preservation measures both prior to and after the commencement of the insolvency proceedings are very important to guarantee the effectiveness of the insolvency proceedings. In this connection the Regulation from the request the the court affords two possibilities. On the one hand, competent for the main insolvency proceedings can also order provisional protective measures covering assets situated outside the country. Such measures are enforced in accordance with the third subparagraph of Article temporarily 25(1). On the other hand, a liquidator appointed prior to the opening of the main insolvency proceedings may, in the States in which an establishment belonging to the debtor is to be found and in which he would like to introduce secondary insolvency proceedings, apply for the preservation measures which are possible under the law of those States (Article 38); local establishment or (16) The right to request the opening of independent territorial proceedings is limited to local creditors and creditors of to cases where main the proceedings cannot be opened under the law of the Member State where the debtor has the centre of his main interest. The reason for this restriction on inde- pendent proceedings are that intended to be limited to what is absolutely necessary; such proceedings is (17) Cases may arise where the estate of the debtor is too complex to administer as a unit, where differences in the legal systems concerned are so great that difficulties may arise from the extension of effects deriving from the law of the State of the opening to the other States where the assets are located. For this reason the liquidator in the main proceedings may request the opening of secondary proceedings when the efficient administration of the estate so requires; by various cooperate sufficient liquidators must a exchanging (18) Main insolvency proceedings and independent insolvency proceedings may, however, contribute to effective real- isation of the total assets only if the parallel proceedings pending are coordinated. The main condition here is that in the particular of In order to ensure the dominant role of information. the main insolvency proceedings, the liquidator in such proceedings is given several possibilities for intervening in secondary insolvency proceedings which are pending at the same time. For example, he may apply for the opening of such proceedings, propose a restructuring plan or composition or apply for the assets in the secondary insolvency proceedings to be suspended; closely, amount realisation of (19) Every creditor, wherever domiciled in the Community, has the right to assert his claims in each of the insolvency proceedings pending in the Community relating to the debtor’s assets. This also applies to tax authorities and social insurance institutions. However, in order to ensure equal treatment of creditors, the distribution of proceeds must be coordinated. Every creditor may keep what he has received in the course of insolvency proceedings but may only participate in the distribution of total assets in other proceedings if creditors with the same standing have obtained the claims. A consolidated proportion survey must therefore be estab- lished for the Community; same proportion of their C 221/10 EN Official Journal of the European Communities 3. 8. 1999 the that (20) The Regulation provides for immediate recognition of judgments concerning the opening, conduct and closure of insolvency proceedings which come within its scope and of judgments handed down in direct connection with such insolvency proceedings. Automatic recognition attributed to the effects therefore means proceedings by the law of the State in which the proceedings were opened extend to all other Member States. Recognition of judgments delivered by the courts of the Member States must be based on the principle of mutual trust; to that end, grounds for non-recognition are reduced to the minimum necessary. This is also the basis on which any dispute is to be resolved where the courts of two Member States both claim competence to open the first main solvency proceedings. The decision of to open proceedings is to be recognised in the court other Member States without those Member States having the power to scrutinise the court’s decision; law. The term áapplicable lawí (21) The Regulation sets 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 in this Regulation refers to the internal law of the Member State, excluding its rules of private international law. Unless otherwise stated, the law of the Member State of the opening of the proceedings is applicable (lex concursus). This rule on conflict of laws is valid both for the main proceedings and for local proceedings. The lex concursus determines all the effects of the insolveny proceedings, both procedural and substantive, on the persons and legal relations concerned; it governs all the conditions for the opening, conduct and closure of the insolvency proceedings; (22) Automatic recognition of insolvency proceedings to which the opening State normally applies may the law of interfere with the rules under which transactions are carried out in other Member States. To protect legitimate expectations and the certainty of transactions in Member States other than that in which proceedings are opened, this Regulation provides for a number of exceptions to the general rule referred to in Articles 5 to 15 of the Regu- lation; (23) There is a particular need for a special reference diverging from the law of the opening State in the case of rights in rem, since these are of considerable importance for the granting of credit. The basis, validity and extent of such a right in rem are therefore normally determined according to the lex situs and are not affected by the opening of insolvency proceedings. The proprietor of in rem can therefore continue to assert his right to segre- gation or separate settlement of the collateral security. Where rights in rem are also covered by insolvency proceedings under the liquidator may the lex situs, request the opening of secondary insolvency proceedings If such inde- if the debtor has an establishment there. the right insolvency proceedings are not opened, the pendent security is covered by the universal insolvency seizure in the main solvency proceedings so that supplementary sale proceeds must be paid back into the total assets if the collateral security is sold; (24) If a set-off is not permitted under the law of the opening State, a creditor is nevertheless entitled to the set-off if it is possible under the law applicable to the claim of the insolvent debtor. In this way, set-off acquires a kind of guarantee function based on legal provisions on which the creditor concerned can rely at the time when the claim arises; (25) There is also a need for special protection in the case of payment systems and financial markets. This applies for example to the position-closing agreements and netting agreements to be found in such systems as well as to the sale of securities and to the guarantees provided for such transactions as governed in particular by Council Directive 98/26/EC of 19 May 1998 on settlement finality in payment and securities settlement systems (1). the only law which is material For such transactions, should thus be that applicable to the system or market concerned. This provision is intended to prevent the possibility of mechanisms for the payment and settlement of transactions provided for in he payment and set-off systems or on the regulated financial markets of the Member States being altered in the case of insolvency of a business partner. For some of the cases involved here, Directive 98/26/EC contains special provisions which take precedence over the general rules in the Regulation; (26) In order to protect employees and jobs, the effects of insolvency proceedings on the continuation or termi- nation of employment and on the rights and obligations of all parties to such employment must be determined by the law applicable to the agreement in accordance with the general law. Any other insolvency-law questions, such as whether the employees’ claims are protected by prior right and what status such prior right may have, are determined by the law of the opening State; rules on conflict of (27) For business considerations, the main content of the decision opening the proceedings must be notified in the other Member States at the request of the liquidator. If in the Member State there there may be a ruling that notification is concerned, compulsory. is notification a In neither case, however, prior condition for recognition of the foreign proceedings; is an establishment (1) OJ L 166, 11. 6. 1998, p. 45. 3. 8. 1999 EN Official Journal of the European Communities C 221/11 (28) 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, the Regulation provides that such a payment shall have a debt-discharging effect; (29) The Regulation includes Annexes relating to the organi- sation of insolvency proceedings pursuant to the domestic law of the Member States. The Council reserves the right to amend these Annexes in order to take account of any amendments to the domestic law of the Member States; and the Treaty (30) In accordance with Articles 1 and 2 of the Protocols on the position of the United Kingdom and Ireland annexed, by the Treaty of Amsterdam, to the Treaty on European Union European Community, these Member States will not participate in adoption of this Regulation; therefore, this Regulation is not binding on either the United Kingdom or Ireland and is not applicable to them, unless these Member States exercise their rights pursuant to Articles 3 and 4 of that Protocol; establishing the establishing annexed, by (31) In accordance with Articles 1 and 2 of the Protocol on the position of Denmark the Treaty of Amsterdam, to the Treaty on European Union and the this Treaty European Community, Member State will not participate in adoption of this Regulation; therefore, this Regulation is not binding on Denmark and is not applicable to it, unless this Member State informs the Council pursuant to Article 7 of that Protocol that it no longer wishes to avail itself of all or the relevant part of that Protocol, the HAS ADOPTED THIS REGULATION: CHAPTER I GENERAL PROVISIONS Article 1 Scope This Regulation shall apply to collective insolvency 1. proceedings which entail the partial or total divestment of a debtor and the appointment of a liquidator. insurance This Regulation shall not apply to insolvency proceedings 2. concerning institutions, undertakings, investment undertakings which provide services involving the holding of funds or securities for third parties, or to collective investment undertakings. credit Article 2 Definitions For the purposes of this Regulation: (a) áinsolvency proceedingsí collective proceedings referred to in Article 1(1). These proceedings are listed in Annex A, which shall form an integral part of this Regulation; shall mean the (b) áliquidatorí shall mean any person or body whose function is to administer or liquidate assets of which the debtor has been divested or to supervise the administration of his affairs. Those persons and bodies are listed in Annex C, which shall form an integral part of this Regulation; the debtor, (c) áwinding-up proceedingsí shall mean insolvency proceedings involving realising the within the meaning of point assets of including where the proceedings have been closed by a composition or other measure termi- nating the insolvency, or closed by reason of the insuffi- ciency of the assets. Those procedures are listed in Annex B, which shall form an integral part of this Regulation; (a) (d) ácourtí shall mean the judicial body or any other competent body of a Member State empowered to open insolvency proceedings or to take decisions in the course of such proceedings; (e) ájudgmentí in relation to the opening of insolvency proceedings or shall include the decision of any court empowered to open such proceedings or to appoint a liquidator; the appointment of a liquidator (f) áthe time of the opening of proceedingsí shall mean the opening proceedings time judgment judgment or not; becomes effective, whether is is a final at which the (g) áthe Member State in which assets are situatedí shall mean, in the case of: - tangible property, the Member State within the territory of which the property is situated, - property and rights ownership of or entitlement which must be entered in a public register, Member State under register is kept, to the the authority of which the - claims, the Member State within the territory of which the third party required to meet them has the centre of his main interests, as determined in Article 3(1); (h) áestablishmentí shall mean any place of operations where the debtor carries out a non-transitory economic activity with human means and goods. C 221/12 EN Official Journal of the European Communities 3. 8. 1999 Article 3 (c) the respective powers of the debtor and the liquidator; International jurisdiction 1. The courts of the Member State within the territory of which the centre of a debtor’s main interests is situated shall have jurisdiction to open insolvency proceedings. In the case of a company or legal person, the place of the registered office shall be presumed to be the centre of its main interests in the absence of proof to the contrary. 2. Where the centre of a debtor’s main interests is situated within the territory of a Member State, the courts of another Member State shall have jurisdiction to open insolvency proceedings against that debtor only if he possesses an estab- lishment within the territory of that other Member State. The effects of those proceedings shall be restricted to the assets of the debtor situated in the territory of the latter Member State. 3. Where insolvency proceedings have been opened under paragraph 1, any proceedings opened subsequently under paragraph 2 shall be secondary proceedings. These latter proceedings must be winding-up proceedings. Territorial 4. in paragraph 2 may be opened prior to the opening of main insolvency proceedings in accordance with paragraph 1 only: proceedings insolvency referred to (a) where insolvency proceedings under paragraph 1 cannot be opened because of the conditions laid down by the law of the Member State within the territory of which the centre of the debtor’s main interests is situated; or (b) where the opening of territorial insolvency proceedings is requested by a creditor who has his domicile, habitual residence or registered office in the Member State within the teritory of which the establishment is situated, or whose claim arises from the oepration of that establishment. (d) the conditions under which set-offs may be invoked; (e) the effects of insolvency proceedings on current contracts to which the debtor is party; (f) (g) the effects of the insolvency proceedings on proceedings brought by individual creditors, with the exception of lawsuits pending; the claims which are to be lodged against the debtor’s the estate and the treatment of claims arising after opening of insolvency proceedings; (h) the rules governing the lodging, verification and admission of claims; (i) the rules governing the distribution of proceeds from the realisation of assets, the ranking of claims and the rights of creditors who have obtained partial satisfaction after the opening of insolvency proceedings by virtue of a right in rem or through a set-off; (j) the conditions for and the effects of closure of insolvency proceedings, in particular by composition; (k) creditors’ rights after the closure of insolvency proceedings; (l) who is to bear the costs and expenses incurred in the insolvency proceedings; (m) the rules relating to the voidness, voidability or unenforce- ability of legal acts detrimental to all the creditors. Article 4 Law applicable Article 5 Third parties’ rights in rem 1. Save as otherwise provided in this Regulation, the law applicable to insolvency proceedings and their effects shall be that of the Member State within the territory of which such proceedings are opened, hereafter referred to as the State of the opening of proceedingsí. 1. The opening of insolvency proceedings shall not affect the rights in rem of creditors or third parties in respect of tangible assets belonging to the debtor which are situated within the territory of another Member State at the time of the opening of proceedings. intangible, movable immovable or or 2. The law of the State of the opening of proceedings shall determine the conditions for the opening of those proceedings, their conduct and their closure. It shall determine in particular: The rights referred to in paragraph 1 shall in particular 2. mean: (a) against which debtors insolvency proceedings may be brought on account of their capacity; (a) the right to dispose of assets or have them disposed of and to obtain satisfaction from the proceeds of or income from those assets, in particular by virtue of a lien or a mortgage; (b) the assets which form part of the estate and the treatment of assets acquired by or devolving on the debtor after the opening of the insolvency proceedings; (b) the exclusive right to have a claim met, in particular a right the claim or by guaranteed by a lien in respect of assignment of the claim by way of a guarantee; 3. 8. 1999 EN Official Journal of the European Communities C 221/13 (c) the right to demand the assets from, and/or to require restitution by, anyone having possession or use of them contrary to the wishes of the party so entitled; Article 9 Payment systems and financial markets (d) a right in rem to the beneficial use of assets. 3. The right, recorded in a public register and enforceable against third parties, under which a right in rem within the meaning of paragraph 1 may be obtained, shall be considered a right in rem. Paragraph 1 shall not preclude the actions for voidness, 4. voidability or unenforceability laid down in Article 4(2)(m). 1. Without prejudice to Article 5, the effects of insolvency proceedings on the rights and obligations of the parties to a payment or settlement system or to a financial market shall be governed solely by the law of the Member State applicable to that system or market. 2. Paragraph 1 shall not preclude any action for voidness, voidability or unenforceability which may be taken to set aside payments or transactions under the law applicable to the relevant payment system or financial market. Article 6 Set-off Article 10 Contracts of employment 1. The opening of insolvency proceedings shall not affect the right of creditors to demand the set-off of their claims against is permitted by the law applicable to the insolvent debtor’s claim. the debtor, where such a set-off the claims of Paragraph 1 shall not preclude the actions for voidness, 2. voidability or unenforceability laid down in Article 4(2)(m). Article 7 Reservation of title The opening of insolvency proceedings against 1. the purchaser of an asset shall not affect the seller’s rights based on a reservation of title where at the time of the opening of proceedings the asset is situated within the territory of a Member State other than the State in which the proceedings were opened. 2. The opening of insolvency proceedings against the seller of an asset, after delivery of the asset, shall not constitute grounds for rescinding or terminating the sale and shall not prevent the purchaser from acquiring title where at the time of the opening of proceedings the asset sold is situated within the territory of a Member State other than the State of the opening of proceedings. 3. Paragraphs 1 and 2 shall not preclude the actions for voidness, voidability or unenforceability laid down in Article 4(2)(m). The effects of insolvency proceedings on employment contracts and relationships shall be governed solely by the law of the Member State applicable to the contract of employment. Article 11 Effects on rights subject to registration insolvency proceedings on the rights of The effects of the debtor in immovable property, a ship or an aircraft subject to registration in a public register shall be determind by the law of the Member State under the authority of which the register is kept. Article 12 Community patents and trade marks For the purposes of this Regulation, a Community patent, a Community trade mark or any other similar right established by Community law may be included only in the proceedings referred to in Article 3(1). Article 13 Detrimental acts Article 4(2)(m) shall not apply where the person who benefited from a legal act detrimental to all the creditors provides proof that: Article 8 Contracts relating to immovable property The effects of insolvency proceedings on a contract conferring the right to acquire or make use of immovable property shall be governed solely by the law of the Member State within the territory of which the immovable property is situated. - the said act is subject to the law of a Member State other than that of the State of the opening of proceedings, and - that law does not allow any means of challenging that act in the relevant case. C 221/14 EN Official Journal of the European Communities 3. 8. 1999 Article 14 Protection of third-party purchasers Where, by an act concluded after the opening of insolvency proceedings, the debtor disposes, for consideration, of: same effects in any other Member State as under the law of the State of the opening of proceedings, unless the Regulation provides otherwise and as long as no proceedings referred to in Article 3(2) are opened in that other Member State. - an immovable asset, or - a ship or an aircraft subject to registration in a public register, or - securities whose existence presupposes registration in a register laid down by law, the validity of that act shall be governed by the law of the State within the territory of which the immovable asset is situated or under the authority of which the register is kept. Article 15 Effects of insolvency proceedings on lawsuits pending The effects of insolvency proceedings on a lawsuit pending concerning an asset or a right of which the debtor has been divested shall be governed solely by the law of the Member State in which that lawsuit is pending. CHAPTER II RECOGNITION OF INSOLVENCY PROCEEDINGS Article 16 Principle 1. Any judgment opening insolvency proceedings handed down by a court of a Member State which has jurisdiction pursuant the other to Article 3 shall be recognised in all Member States from the time that it becomes effective in the State of the opening of proceedings. This rule shall also apply where, on account of his capacity, insolvency proceedings cannot be brought against the debtor in other Member States. 2. Recognition of the proceedings referred to in Article 3(1) shall not preclude the opening of the proceedings referred to in Article 3(2) by a court in another Member State. The latter proceedings shall be secondary proceedings within the meaning of Chapter III. 2. The effects of the proceedings referred to in Article 3(2) may not be challenged in other Member States. Any restriction of the creditors’ rights, in particular a stay or discharge, shall produce effects vis-à-vis assets situated within the territory of another Member State only in the case of those creditors who have given their consent. Article 18 Powers of the liquidator 1. The liquidator appointed by a court which has juris- diction pursuant to Article 3(1) may exercise all the powers conferred on him by the law of the State of the opening of proceedings in another Member State, as long as no other insolvency proceedings have been opened there nor any pres- ervation measure to the contrary has been taken there further to a request for the opening of insolvency proceedings in that State. He may in particular remove the debtor’s assets from the the Member State in which they are situated, territory of subject to Articles 5 and 7. The liquidator appointed by a court which has juris- 2. diction pursuant to Article 3(2) may in any other Member State claim through the courts or out of court that movable property was removed from the territory of the State of the opening of proceedings to the territory of that other Member State after the opening of the insolvency proceedings. He may also bring any action to set aside which is in the interests of the creditors. 3. In exercising his powers, the liquidator shall comply with the law of the Member State within the territory of which he intends to take action, in particular with regard to procedures for the realisation of assets. Those powers may not include coercive measures or the right to rule on legal proceedings or disputes. Article 19 Proof of the liquidator’s appointment The liquidator’s appointment shall be evidenced by a certified copy of the original decision appointing him or by any other certificate issued by the court which has jurisdiction. Article 17 Effects of recognition 1. The judgment opening the proceedings referred to in Article 3(1) shall, with no further formalities, produce the A translation into the official language or one of the official languages of the Member State within the territory of which he intends to act may be required. No legalisation or other similar formality shall be required. 3. 8. 1999 EN Official Journal of the European Communities C 221/15 Article 20 Article 24 Return and imputation Honouring of an obligation to a debtor 1. A creditor who, after the opening of the proceedings referred to in Article 3(1) obtains by any means, in particular through enforcement, total or partial satisfaction of his claim on the assets belonging to the debtor situated within the territory of another Member State, shall return what he has obtained to the liquidator, subject to Articles 5 and 7. 2. In order to ensure equal treatment of creditors a creditor who has, in the course of insolvency proceedings, obtained a dividend on his claim shall share in distributions made in other proceedings only where creditors of the same ranking or category have, in those other proceedings, obtained an equivalent dividend. Article 21 Publication 1. The liquidator may request that notice of the judgment opening insolvency proceedings and, where appropriate, the decision appointing him be published in any other Member State in accordance with the publication procedures provided in that State. Such publication shall also specify the for liquidator appointed and whether the jurisdiction rule applied is that pursuant to Article 3(1) or (2). However, any Member State within the territory of which 2. the debtor has an establishment may require mandatory publi- cation. any authority empowered to that effect in the Member State where the proceedings referred to in Article 3(1) are opened shall take all necessary measures to ensure such publication. In such cases, liquidator or the Article 22 Registration in a public register 1. The liquidator may request that the judgment opening the proceedings referred to in Article 3(1) be registered in the land register, the trade register and any other public register kept in the other Member States. However, any Member State may require mandatory 2. the liquidator or any authority registration. In such cases, empowered to that effect in the Member State where the proceedings referred to in Article 3(1) have been opened shall take all necessary measures to ensure such registration. 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 the person honouring the obligation shall be proceedings, deemed to have discharged it the opening of proceedings. if he was unaware of 2. Where such an obligation is honoured before the publi- cation 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. Article 25 Recognition and enforceability of other judgments is Judgments handed down by a court whose judgment 1. concerning the opening of proceedings recognised in accordance with Article 16 and which concern the course and closure of insolvency proceedings, and compositions approved by that court shall also be recognised with no further shall be enforced in accordance with Articles 31 to 51 of the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, as amended by the Conventions of Accession to this Convention, with the exception of Article 34(2). formalities. Such judgments The first subparagraph shall also apply to judgments deriving directly from the insolvency proceedings and which are closely linked with them, even if they were handed down by another court. The first subparagraph shall also apply to judgments relating to preservation measures taken after the request for the opening of insolvency proceedings. The recognition and enforcement of 2. judgments other than those referred to in paragraph 1 shall be governed by the Convention referred to in paragraph 1, provided that that Convention is applicable. 3. The Member States shall not be obliged to recognise or enforce a judgment referred to in paragraph 1 which might result in a limitation of personal freedom or postal secrecy. Article 23 Costs Article 26 Public policy The costs of the publication and registration provided for in Articles 21 and 22 shall be regarded as costs and expenses incurred in the proceedings. Any Member State may refuse insolvency proceedings opened in another Member State or to enforce a judgment handed down in the context of such proceedings to recognise C 221/16 EN Official Journal of the European Communities 3. 8. 1999 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. CHAPTER III SECONDARY INSOLVENCY PROCEEDINGS Article 27 Opening of proceedings The opening of the proceedings referred to in Article 3(1) by a court of a Member State and which is recognised in another Member State (main proceedings) shall permit the opening, in that other Member State a court of which has jurisdiction pursuant to Article 3(2), of secondary insolvency proceedings without the debtor’s insolvency being examined in that other State. These latter proceedings must be among the proceedings listed in Annex B. Their effects shall be restricted to the assets of the debtor situated within the territory of that other Member State. Article 31 Duty to cooperate and communicate information Subject 1. to the rules restricting the communication of information, the liquidator in the main proceedings and the liquidators in the secondary proceedings shall be duty bound to communicate information to each other. They shall immediately communicate any information which may be relevant to the other proceedings, in particular the progress made in lodging and verifying claims and all measures aimed at terminating the proceedings. Subject to the rules applicable to each of the proceedings, 2. the liquidator in the main proceedings and the liquidators in the secondary proceedings shall be duty bound to cooperate with each other. 3. The liquidator in secondary proceedings shall give the liquidator in the main proceedings an early opportunity of submitting proposals on the liquidation or use of the assets in the secondary proceedings. Article 28 Applicable law the law Save as otherwise provided in this Regulation, applicable to secondary proceedings the Member State within the territory of which the secondary proceedings are opened. shall be that of Article 32 Exercise of creditors’ rights Any creditor may lodge his claim in the main proceedings 1. and in any secondary proceedings. Article 29 Right to request the opening of proceedings The opening of secondary proceedings may be requested by: (a) the liquidator in the main proceedings; (b) any other person or authority empowered to request the opening of insolvency proceedings under the law of the Member State within the territory of which the opening of secondary proceedings is requested. The liquidators in the main and any secondary 2. proceedings shall lodge in other proceedings claims which have already been lodged in the proceedings for which they were appointed, provided that the interests of creditors in the latter proceedings are served thereby, subject to the right of creditors to oppose that or to withdraw the lodgement of their claims where the law applicable so provides. The liquidator in the main or secondary proceedings shall 3. be empowered to participate in other proceedings on the same basis as a creditor, in particular by attending creditors’ meetings. Article 30 Advance payment of costs and expenses Where the law of the Member State in which the opening of secondary proceedings is requested requires that the debtor’s assets be sufficient to cover in whole or in part the costs and expenses of the proceedings, the court may, when it receives such a request, require the applicant to make an advance payment of costs or to provide appropriate security. Article 33 Stay of liquidation 1. The court, which opened the secondary proceedings, shall stay the process of liquidation in whole or in part on receipt of a request from the liquidator in the main proceedings, provided that in that event it may require the liquidator in the main proceedings to take any suitable measure to guarantee the interests of the creditors in the secondary proceedings and of individual classes of creditors. Such a request from the is manifestly of no liquidator may be rejected only if it 3. 8. 1999 EN Official Journal of the European Communities C 221/17 interest to the creditors in the main proceedings. Such a stay of the process of liquidation may be ordered for up to three months. It may be continued or renewed for similar periods. Article 36 Subsequent opening of the main proceedings The court referred to in paragraph 1 shall terminate the 2. stay of the process of liquidation: - at the request of the liquidator in the main proceedings, - of its own motion, at the request of a creditor or at the request of the liquidator in the secondary proceedings if that measure no longer appears justified, in particular, by the interests of creditors in the main proceedings or in the secondary proceedings. Article 34 Measures ending secondary insolvency proceedings 1. Where the law applicable to secondary proceedings allows for such proceedings to be closed without liquidation by a rescue plan, a composition or a comparable measure, the liquidator in the main proceedings shall be empowered to propose such a measure himself. Closure of the secondary proceedings by a measure referred to in the first subparagraph shall not become final without the consent of the liquidator in the main proceedings; failing his agreement, however, the financial interests of the creditors in the main proceedings are not affected by the measure proposed. it may become final if 2. Any restriction of creditors’ rights arising from a measure referred to in paragraph 1 which is proposed in secondary proceedings, such as a stay of payment or discharge of debt, may not have effect the debtor’s assets not in respect of covered by those proceedings without the consent of all the creditors having an interest. the process of During a stay of to Article 33, only the liquidator liquidation ordered 3. pursuant in the main proceedings or the debtor, with the former’s consent, may propose measures laid down in paragraph 1 of this Article in the secondary proceedings; no other proposal for such a measure shall be put to the vote or approved. Where the proceedings referred to in Article 3(1) are opened following the opening of the proceedings referred to in Article 3(2) in another Member State, Articles 31 to 35 shall apply to those opened first, those proceedings so permits. the progress of in so far as Article 37 Closure and conversion of earlier proceedings The liquidator in the main proceedings may request that proceedings listed in Annex A previously opened in another Member State be converted into winding-up proceedings if this the creditors in the main proves to be in the interests of proceedings. The court with jurisdiction pursuant to Article 3(2) shall order conversion into one of the proceedings listed in Annex B. Article 38 Preservation measures Where the court of a Member State which has jurisdiction pursuant to Article 3(1) appoints a temporary administrator the debtor’s assets, in order to ensure the preservation of that temporary administrator shall be empowered to request any measures to secure and preserve any of the debtor’s assets situated in another Member State provided for under the law of that State, for the period between the request for the opening of insolvency proceedings and the judgment opening the proceedings. CHAPTER IV PROVISION OF INFORMATION FOR CREDITORS AND LODGEMENT OF THEIR CLAIMS Article 39 Right to lodge claims Any creditor who has his habitual residence, domicile or registered office in a Member State other than the State of the opening of proceedings, including the tax authorities and social security authorities of Member States, shall have the right to lodge claims in the insolvency proceedings in writing. Article 35 Assets remaining in the secondary proceedings If by the liquidation of assets in the secondary proceedings it is possible to meet all claims allowed under those proceedings, the liquidator appointed in those proceedings shall immediately transfer any assets remaining to the liquidator in the main proceedings. Article 40 Duty to inform creditors 1. As soon as insolvency proceedings are opened in a Member State, the court of that State having jurisdiction or the liquidator appointed by it shall immediately inform known C 221/18 EN Official Journal of the European Communities 3. 8. 1999 creditors who have their habitual residences, domiciles or registered offices in the other Member States. Article 44 Relationshsip to Conventions That information, provided by an individual notice, shall 2. in particular include time limits, the penalties laid down in regard to those time limits, the body or authority empowered to accept the lodgement of claims and the other measures laid down. Such notice shall also indicate whether creditors whose claims are preferential or secured in rem need lodge their claims. Article 41 Content of the lodgement of a claim A creditor shall send copies of supporting documents, if any, and shall indicate the nature of the claim, the date on which it arose and its amount, as well as whether he alleges preference, security in rem or a reservation of title in respect of the claim and what assets are covered by the guarantee he is invoking. After its entry into force, in 1. in the relations respect of between Member States, the Conventions concluded between two or more Member States, in particular: the matters referred to therein, this Regulation replaces, - the Convention between Belgium and France on Juris- diction and the Validity and Enforcement of Judgements, Arbitration Awards and Authentic Instruments, signed at Paris on 8 July 1899, - the Convention between Belgium and Austria on Bank- ruptcy, Winding-up, Arrangements, Compositions and Suspension of Payments (with Additional Protocol of 13 June 1973), signed at Brussels on 16 July 1969, - the Convention between Belgium and the Netherlands on Jurisdiction, Bankruptcy and the Validity and Territorial and Judgments, Arbitration Awards Enforcement of Authentic Instruments, signed at Brussels on 28 March 1925, Article 42 Languages - the Treaty between Germany and Austria on Bankruptcy, Winding-up, Arrangements and Compositions, signed at Vienna on 25 May 1979, The information provided for in Article 40 shall be 1. the official language or one of provided in the official languages of the opening of proceedings. For that purpose a form shall be used bearing the heading Invitation to lodge a claim. Time limits to be observedí in all the official languages of the European Union. the State of 2. Any creditor who has his habitual residence, domicile or registered office in a Member State other than the State of the opening of proceedings may lodge his claim in the official language or one of the official languages of that other State. In that event, however, the lodgement of his claim shall bear the heading Lodgement of claimí in the official language or languages of the State of the opening of one of the official proceedings. In addition, he may be required to provide a translation, into that language, of the lodgement of claim. CHAPTER V TRANSITIONAL AND FINAL PROVISIONS Article 43 Applicability in time The provisions of this Regulation shall apply only to insolvency proceedings opened after its entry into force. Acts done by a debtor before the entry into force of the Regulation shall continue to be governed by the law which was applicable to them at the time they were done. - the Convention between France and Austria on Jurisdiction, Recognition and Enforcement of Judgments on Bankruptcy, signed at Vienna on 27 February 1979, - the Convention between France and Enforcement of Matters, signed at Rome on 3 June 1930, Judgmens in Civil Italy on the and Commercial - the Convention between Italy and Austria on Bankruptcy, Winding-up, Arrangements and Compositions, signed at Rome on 12 July 1977, - the Convention between the Kingdom of the Netherlands and the Federal Republic of Germany on the Mutual Recog- nition and Enforcement of Judgments and other Enforceable Instruments in Civil and Commercial Matters, signed at The Hague on 30 August 1962, - the Convention between Denmark, Finland, Norway, Sweden and Iceland on Bankruptcy, signed at Copenhagen on 11 November 1933, - the European Convention on Certain International Aspects of Bankruptcy, signed at Instanbul on 5 June 1990. The Conventions 2. referred to in paragraph 1 shall continue to have effect with regard to proceedings opened before the entry into force of this Regulation. 3. 8. 1999 EN Official Journal of the European Communities C 221/19 3. This Regulation shall not apply: - in any Member State, to the extent that it is irreconcilable with the obligations arising in relation to bankruptcy from a convention concluded by that State with one or more third countries before the entry into force of this Regu- lation. Article 46 Entry into force This Regulation shall enter into force on. This Regulation shall be binding in its entirety and directly applicable in the Member States in accordance with the Treaty establishing the European Community. Article 45 Amendment of the Annexes Done at Brussels,. The Annexes to this Regulation may be amended by decision of the Council. For the Council The President ANNEX A BELGIQUE - BELGI¸ - La faillite/Het faillissement - Concordat judiciaire/Het gerechtelijk akkoord DEUTSCHLAND - Das Konkursverfahren - Das gerichtliche Vergleichsverfahren - Das Gesamtvollstreckungsverfahren - Das Insolvenzverfahren ELLAS - —ôþ÷åıóç - ˙ Ø ØŒÞ ŒŒÆŁ æØóç - ˙ ðæïóøæØíÞ ØÆ÷åßæØóç å ÆØæ Æò. ˙ Øï Œçóç ŒÆØ ç ØÆ÷åßæØóç ôøí Øóôøôþí - ˙ ıðÆªøªÞ å Ø÷åßæçóçò ıðü åðßôæïðï ìå Œïðü ôç óı· Æłç óıìöøí Æò ìå ôïıò ØóôøôÝò ESPAÑA - Concurso de acreedores - Quiebra - Suspensión de pagos FRANCE - Liquidation judiciaire - Redressement judiciaire avec nomination d’un administrateur C 221/20 EN Official Journal of the European Communities 3. 8. 1999 ITALIA - Fallimento - Concordato preventivo - Liquidazione coatta amministrativa - Amministrazione straordinaria - Amministrazione controllata LUXEMBOURG - Faillite - Gestion contrôlØe - Concordat prØventif de faillite (par abandon d’actif) - RØgime spØcial de liquidation du notariat NEDERLAND - Het faillissement - De sursØance van betaling ÖSTERREICH - Das Konkursverfahren - Das Ausgleichsverfahren - Das Vorverfahren PORTUGAL - O processo de falŒncia - Os processos especiais de recuperaçªo de empresa, ou seja: - A concordata - O acordo de credores - A reestruturaçªo financeira - A gestªo controlada SUOMI - FINLAND - Konkurssi/konkurs - Yrityssaneeraus/företagssanering SVERIGE - Konkurs - Offentligt ackord - Företagsrekonstruktion 3. 8. 1999 EN Official Journal of the European Communities C 221/21 ANNEX B BELGIQUE - BELGI¸ - La faillite/Het faillissement DEUTSCHLAND - Das Konkursverfahren - Das Gesamtvollstreckungsverfahren - Das Insolvenzverfahren ELLAS - —ôþ÷åıóç - ˙ Ø ØŒÞ ŒŒÆŁ æØóç ESPAÑA - Concurso de acreedores - Quiebra - Suspensión de pagos basada en la insolvencia definitiva FRANCE - Liquidation judiciaire ITALIA - Fallimento - Liquidazione coatta amministrativa LUXEMBOURG - Faillite - RØgime spØcial de liquidation du notariat NEDERLAND - Het faillissement ÖSTERREICH - Das Konkursverfahren PORTUGAL - O processo de falŒncia SUOMI - FINLAND - Konkurssi/konkurs SVERIGE - Konkurs C 221/22 EN Official Journal of the European Communities 3. 8. 1999 ANNEX C BELGIQUE - BELGI¸ - Le curateur/de curator - Le juge dØlØguØ/de rechter-commissaris DEUTSCHLAND - Konkursverwalter - Vergleichsverwalter - Sachwalter (nach der Vergleichsordnung) - Verwalter - Insolvenzverwalter - Sachwalter (nach der Insolvenzordnung) - Treuhänder ELLAS - ı·í ØŒïò - ˇ ðæïóøæØíüò ØÆ÷ ØæØóôÞò. ˙ Ø ØŒïı· Æ å ØôæïðÞ ôøí Øóôøôþí - ˇ Ø ØŒüò ŒŒÆŁÆæØóôÞò - ˇ åðßôæïðïò ESPAÑA - Depositario-administrador - Interventor o interventores - Síndicos - Comisario FRANCE - ReprØsentant des crØanciers - Mandataire liquidateur - Administrateur judiciaire - Commissaire à l’exØcution de plan ITALIA - Curatore - Commissario liquidatore LUXEMBOURG - Le curateur - Le commissaire - Le liquidateur - Le conseil de gØrance de la section d’assainissement du notariat NEDERLAND - De curator in het faillissement - De bewindvoerder in de sursØance van betaling 3. 8. 1999 EN Official Journal of the European Communities C 221/23 ÖSTERREICH - Masseverwalter - Ausgleichsverwalter - Sachwalter - Treuhänder - Besonderer Verwalter - Vorläufiger Verwalter - das Konkursgericht PORTUGAL - Gestor judicial - LiquidatÆrio judicial - Comissªo de Credores SUOMI - FINLAND - Pesänhoitaja/boförvaltare - Selvittäjä/utredare SVERIGE - Förvaltare - God man - Rekonstruktör