Jurisdiction concerning annex actions in the context of the insolvency and Brussels Ibis regulations

• Author: Zoltan Fabok
• Published date: 01 June 2020
• DOI: http://doi.org/10.1002/iir.1379
• Date: 01 June 2020

RESEARCH ARTICLE

Jurisdiction concerning annex actions in the

context of the insolvency and Brussels Ibis

regulations

Zoltan Fabok

DLA Piper Posztl, Nemescsói, Györfi-

Tóth & Partners Law Firm, Budapest,

Hungary

Correspondence

Zoltan Fabok, Fellow of INSOL

International, Special Counsel at DLA

Piper Hungary, Budapest, Hungary,

Visiting Lecturer at Eötvös Loránd

University, Budapest, Hungary.

Email: zoltan.fabok@dlapiper.com

Abstract

The legislation of the European Union has addressed

the private international law aspects of civil and com-

mercial matters and those of insolvency cases sepa-

rately. While the Brussels Ibis Regulation (and its

predecessors) focuses on “classic”civil of commercial

cases, insolvency proceedings are subject to the (recast)

Insolvency Regulation. However, the close interference

between the two related areas of law—commercial and

insolvency—results in a category of cases that are com-

mercial and contentious in nature, and so they would

tend to gravitate towards the Brussels regime, but yet

they are so closely connected to the insolvency pro-

ceedings that justifies a special approach. This article

focuses on the question of international jurisdiction

regarding these “annex actions”in the context of the

EU law. It will attempt to explore the historical roots of

the current provisions and the evolution of both the

European legislation and the relevant case law. The

examination of this progression provides a better

understanding of the current legislation and answers

some questions apparently left open in the recast Insol-

vency Regulation.

Received: 26 February 2020 Revised: 20 April 2020 Accepted: 18 May 2020

DOI: 10.1002/iir.1379

© 2020 INSOL International and John Wiley & Sons Ltd

204 Int Insolv Rev. 2020;29:204–233.wileyonlinelibrary.com/journal/iir

1|INTRODUCTION—THE CONCEPT OF ANNEX ACTIONS

The question of jurisdiction concerning annex (insolvency-related) actions is in the focus of this

paper. Accordingly, the issues and uncertainties regarding the categorisation of the annex

actions are not addressed in this paper. For our purposes, now it is sufficient to recount the

well-known Gourdain formula,

1

pursuant to which those proceedings deriving directly from the

insolvency proceedings and being closely linked with them fall, from a procedural point of

view, outside the terrain of the civil and commercial cases and therefore within the aegis of the

insolvency matters. Although in some particular cases, the delineation between annex and non-

annex actions has been problematic,

2

it appears that, generally, the decisive criterion adopted

by the CJEU to identify the area within which an action falls is not the procedural context of

which that action is part, but the legal basis thereof.

3

According to that approach, it must be

determined whether the right or the obligation that respects the basis of the action finds its

source in the common rules of civil and commercial law or in the derogating rules specific to

insolvency proceedings.

4

2|THE PRE-SEAGON PERIOD

2.1 |The European vis attractiva rule in the early European

insolvency initiatives

The concept of vis attractiva concursus means that the national court which opened the insol-

vency proceedings has sole jurisdiction to deal not only with the insolvency proceedings them-

selves, but also with any disputes arising from the insolvency.

5

In cross-border context, the vis

attractiva rule concerns the allocation of the international jurisdiction to the courts of the state

where the insolvency proceedings have been opened. The territorial (i.e., domestic) allocation

of the jurisdictional power among courts within a state belongs to the domestic law.

The 40-year long drafting process of what was then called the Insolvency Convention started

in 1960.

6

The first important product was the 1970 Preliminary Draft Convention.

7

Regarding

those actions arising from the bankruptcy, two main features of the draft deserve attention. On

the one hand, the draft explicitly defined those types of proceedings, which qualify as insol-

vency-related.

8

On the other hand, Article 17 clearly and explicitly provided that:

“[t]he courts of the State in which the bankruptcy proceedings have been instituted

shall have exclusive jurisdiction to entertain proceedings arising from [those annex

proceedings].”

9

(emphasis added)

The second draft,

10

finalised and published eventually in 1982,

11

followed the same path.

Accordingly, Article 15 of the 1982 Draft Convention provided that:

“the courts of the State in which the bankruptcy has been opened shall have exclu-

sive jurisdiction to entertain proceedings concerning [proceedings classified as

annex proceedings].”

12

(emphasis added)

The 1990 Istanbul Convention,

13

a convention drafted under the aegis of the Council of

Europe which lacking a sufficient number of ratifications has not entered into force,

14

was

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