JUDGMENT OF 22. 2. 1979 — CASE 133/78

In Case 133/78

REFERENCE to the Court under the Protocol of 3 June 1971 on the in­terpretation by the Court of Justice of the Convention of 27 September 1968on jurisdiction and the enforcement of judgments in civil and commercialmatters by the Bundesgerichtshof [Federal Court of Justice] for a preliminaryruling in the action pending before that court between

Henri Gourdain, Advocate, residing in Paris, as Liquidator of the SociétéFromme France Manutention,

and

Franz Nadler, residing at Wetzlar (Federal Republic of Germany),

on the interpretation of subparagraph 2 of the second paragraph of Article 1of the said Convention which provides that the said Convention shall notapply to bankruptcy and proceedings relating to the winding-up of insolventcompanies or other legal persons.

THE COURT

composed of: H. Kutscher, President, J. Mertens de Wilmars and LordMackenzie 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

JUDGMENT

Facts and Issues

The facts of the case, the course ofthe procedure and the observationssubmitted pursuant to Article 20 of the

Protocol on the Statute of the Court of

Justice of the EEC may be summarizedas follows:

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GOURDAIN v NADLER

I — Facts and procedure

The German company Fromme Förder­anlagen GmbH one of the objects ofwhich is to carry on the business ofmanufacturing handling equipment hadas its manager a Mr Nadler.

In order to market its products in Franceit formed in 1968 a subsidiary companywith limited liability under the name ofFromme France Manutention having ashare capital of 2 500 shares of which itowned 2 490.

As a result of the winding-up of theGerman company the French companyfound itself in a critical financial

situation and the court in a judgment of7 March 1974, which was upheld onappeal, declared that the conditionsexisted for the "liquidation des biens[winding-up of the affairs of a person,firm or company not expected tocontinue in business]"<appnote>1</appnote> of the Frenchcompany, the date when it declared itselfunable to meet its liabilities being 21September 1973. Mr Gourdain wasappointed "syndic [liquidator or trusteefor the creditors]"<appnote>1</appnote> and Mr Nadler wasregarded as de facto manager anddeprived of his right to direct, manage,conduct or supervise any commercialundertaking.

Furthermore by an order of the Courd'Appel, Paris, which became final on 15March 1976 Mr Nadler was ordered to

bear the company's debts up to theamount of FF 743 563.15 pursuant toArticle 99 of the French Law No 67-563

of 13 July 1967 on the "règlement judi­ciaire [administration of the affairs of aninsolvent person, firm or companyexpected to continue in business underthe supervision of the court]",<appnote>1</appnote> the"liquidation des biens", the "faillitepersonnelle [mandatory or optional depri­vation or prohibition by the court of theexercise of the rights required to carryon business where the debtor or manager

has been imprudent or dishonest]"<appnote>1</appnote> and"banqueroutes [ordinary and criminalbankruptcies]".<appnote>1</appnote>

In reliance on the Convention on

jurisdiction and enforcement ofjudgments in civil and commercialmatters of 27 September 1968, theapplicant, Mr Gourdain applied to theLandgericht [Regional Court] Limburgfor leave to enforce the order of the

Cour d'Appel, Paris, in the FederalRepublic of Germany.

The President of the LandgerichtLimburg by an order of 22 April 1977granted this application subject to certainterms but the Oberlandesgericht [HigherRegional Court] Frankfurt, by an orderof 7 September 1977, set aside thisdecision as it considered that the order

under Article 99 of the French Law of 13

July 1967 against Mr Nadler in personamas the de facto manager of a commercialcompany whose affairs are being woundup "is not a decision in a civil andcommercial matter but must be regardedfrom points of view which overlap asforming part of the winding-up, sincesuch an order, which is not known in the

German legal system, has its basis in thewinding-up of the trading companyconcerned and is part and parcel of thewinding-up proceedings, even if it wasthe outcome of contentious civil law

proceedings".

In answer to these considerations the

applicant submitted in his appeal that theopportunity offered by Article 99 of theFrench Law of 13 July 1967 ofproceeding in winding-up proceedingsagainst the de jure or de facto manager ofa legal person is not a legal applicationinherent in winding-up proceedings but acase of liability under civil law whichmust be dealt with in a civil action

brought by the "syndic".

1 — Translator's note. The English terms given do notpurport to be exact equivalents of the French terms,since concepts in the different legal systems arc notidentical.

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JUDGMENT OF 22. 2. 1979 — CASE 133/78

Consequently the decision which theBundesgerichtshof, before which thematter was brought has to give dependsupon the interpretation of the firstparagraph of Article 1 and of subpara­graph 2 of the second paragraph ofArticle 1 of the Convention which does

not apply to bankruptcy, proceedingsrelating to the winding-up of insolventcompanies or other legal persons, judicialarrangements, compositions and anal­ogous proceedings.

It is in these circumstances that by anorder dated 22 May 1978 the Bundes­gerichtshof referred to the Court ofJustice for a preliminary ruling thefollowing question:

"Is a judgment given by French civilcourts on the basis of Article 99 of the

French Law No 67-563 of 13 July 1967against the de facto manager of a legalperson for payment into the assets of acompany in liquidation to be regarded ashaving been given in bankruptcyproceedings, proceedings relating to thewinding-up of insolvent companies orother legal persons and analogousproceedings (subparagraph 2 of thesecond paragraph of Article 1 of theConvention) or is such a judgment adecision given in a civil and commercialmatter (first paragraph of Article 1 of theConvention)?"

The order of the Bundesgerichtshof wasentered at the Court Registry on 12 June1978.

In accordance with Article 20 of the

Protocol on the Statute of the Court of

Justice of the EEC written observationswere submitted by H. E. Brandner, Ad­vocate at the Bundesgerichtshof, on be­half of the appellant in the main action,by G. Greumer and O. C. Brändel,Advocates at the Bundesgerichtshof, onbehalf of the respondent in the mainaction, by Dr. G. Bebr, acting as Agent,on behalf of the Commission of the

European Communities and byM. W. Holtgrave, acting as Agent, onbehalf of the Government of the Federal

Republic of Germany.

II — Written observations sub­

mitted pursuant to Article20 of the Protocol on theStatute of the Court of

Justice of the EEC

A — Written observations of the"syndic", Mr Gourdain, theappellant in the main action

It is Mr Gourdain's view that if in

winding-up proceedings a French civilcourt orders the manager of a legalperson, pursuant to Article 99, to pay acertain sum into the assets of the

company, that is a decision concerning acivil and commercial matter within the

meaning of the first paragraph of Article1 of the Convention.

He argues that, although the rulecontained in Article 99, which isregarded as a rule for investigation intothe winding-up in order to ascertain theperson responsible, is laid down in theFrench Law of 13 July 1967 it is nothowever regarded by French learnedwriters as a legal procedure inherent inwinding-up proceedings but as aparticular type of action for a declarationas to liability (Schmidt KTS 1976 p. 18).

The question whether such investigationinto the winding-up in order to find outwho was responsible is not determined inthe context of proceedings by the generalbody of creditors before the "jugecommissaire [judge designated toexpedite and supervise the variousbankruptcy and winding-up proceedingsunder the authority of the court]"<appnote>1</appnote>(Article 8 of the French Law) but in thecontext of contentious proceedingsbefore the court having jurisdiction(Article 5) in which the parties are the"syndic" and the manager proceededagainst.

It will not be possible for the EuropeanConvention on bankruptcy, proceedingsrelating to the winding-up of insolventcompanies or other legal persons, judicialarrangements, compositions and anal-

1 — See Note 1, p. 735.

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GOURDAIN   NADLER

ogous proceedings which is still only inthe form of a preliminary draft toinclude a similar rule as to liability.

Although it is true that investigation intothe winding-up in order to ascertain theperson responsible has a causalconnexion with the winding-up of thecompany it is founded on a system ofspecial liability which falls within generalcivil and commercial law. It is an

additional liability for the debts of thecompany and the only connexion withthe winding-up proceedings, which aredesigned to ensure a pro rataapportionment of the assets of thecompany between the creditors of thecompany, is the fact that the right ofaction vests in the "syndic". Thecreditors of the company could just aswell be given the right to bring directaction themselves; the right to instituteproceedings has only been vested in the"syndic" in his capacity as chiefexecutive of the company for practicalreasons so that proceeding against themanager who is liable does not dependupon whether or not the creditors of thecompany accept the risk of a directaction or on their decision to bring thisaction. All these considerations lead to

the conclusion that the action must be

classified as an action concerning a civilor commercial matter.

Mr Gourdain therefore submits that the

question referred to the Court beanswered as follows:

If during winding-up proceedings, aFrench civil court orders the de factomanager of a legal person, pursuant toArticle 99 of the French Law of 13 July1967, to pay a certain sum into the assetsof a company, its order is a decision in acivil and commercial matter within the

meaning of the first paragraph of Article1 of the Convention.

B — Written observations ofMr Nadler,the respondent in the main action

First the respondent in the main actionrequests the court to "set aside the order

for reference made by the Bundes­gerichtshof as being inadmissible". He infact takes the view that the answer to the

question as formulated would lead to theactual application of the law whereas theCourt's only task is to "determine in theabstract the content of Community lawby way of interpretation".

Secondly and -in the alternative herequests the Court in answer to thequestion referred to it to rule that theConvention does not apply to courtorders

(a) relating to the assets of a legalperson which are made inproceedings for the "liquidation desbiens" of a company or from whichsuch proceedings must be inferred,

(b) which are directed against de jure orde facto parts of the legal person and

(c) the purpose of which is to add somefunds to the assets of the companywith a view to the pro rata repaymentof the creditors without

(d) the obligation to make a contri­bution being founded on provisionsother than the rules applicable to the"liquidation des biens",

in so far as they fit into the generalpattern of bankruptcy and winding-upwithin the meaning of subparagraph 2 ofthe second paragraph of Article 1 of theConvention.

The respondent in the main action pointsout that, so long as the proposedEuropean Convention on bankruptcy,winding-up, arrangements, compositionsand similar proceedings has not comeinto being, subparagaph 2 of the secondparagraph of Article 1 of the Conventionon enforcement must be interpreted withreference to the specific features whichare peculiar to insolvency proceedings.

In proceedings for the "liquidation desbiens" all measures taken by the"syndic" for the purposes of drawing-upthe statement of the company's affairs ofnecessity form an integral part of thesaid proceedings.

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JUDGMENT OF 22. 2. 1979 — CASE 133/78

It is immaterial whether the "syndic" forthe purpose of drawing up the statementof the company's affairs relies on aspecial court concerned with winding-upor applies to an ordinary civil court. Onthe other hand the decisive factor is hatthe purpose of the court's decision givenon the application of the "syndic" is tocomplete the list of assets and that in lawthat decision is founded solely on thelegal provisions applicable to "liquidationdes biens".

Viewed from this angle all those rightswhich the "syndic" simply exercises inthe place of the insolvent person, firm orcompany and which are founded on alegal basis (a law or other legal act)other than proceedings for "liquidationdes biens" are governed by theConvention.

Similar pre-existing rights, which are notonly derived from the rules applicable tothe "liquidation des biens" must beenforced by the "syndic" before theordinary civil and commercial courts.The purpose of exercising rights of thiskind pertaining to assets is not to drawup the list of assets but to realise themforthwith with a view to the ultimate

satisfaction (pro rata) of the creditors.The fact that the "syndic" embarks onthe legal enforcement of these rights inthe place of the insolvent person, firm orcompany does not transform suchactions into proceedings in "bankruptcy"or "relating to the winding-up ofinsolvent companies or other legalpersons" within the meaning of subpara­graph 2 of the second paragraph ofArticle 1 of the Convention on

enforcement.

The application brought pursuant toArticle 99 of the French Law of 13 July1967 is based solely on legal provisionsapplicable to the "liquidation des biens".It can only be made by the "syndic" andit is used for the purpose of makinggood, in the interests of the creditors,the deficiency between assets andliabilities caused by the officers of the

company. It is therefore a decision in"bankruptcy" or "proceedings relating tothe winding-up of insolvent companiesor other legal persons" and theConvention on enforcement does not

apply to it either.

Furthermore, according to therespondent in the main action, under thePreliminary Draft of a Convention onbankruptcy, winding-up, arrangements,compositions and similar proceedingscourt orders of the kind which are the

subject of the main action must beregarded as having been made in"bankruptcy" or "proceedings relating tothe winding-up of companies or otherlegal persons" so that their enforcementis not governed by the provisions of theConvention of 27 September 1968.

C — Written observations of theCommission

The Commission takes the view that the

Convention must be regarded as formingpart of the general agreements and assuch must in case of doubt be given awide interpretation and that inconsequence the exceptions specifiedtherein must be interpreted strictly "byreferring, first, to the objectives andscheme of the Convention and, secondly,to the general principles which stem fromthe corpus of the national legal systems"(Case 29/76 LTU Lufttransportunter­nehmen GmbH & Co KG v Eurocontrol

[1976] 2 ECR 1541, at p. 1551,paragraph 3 of the decision; Case 43/77,Industrial Diamond Supplies v Luigi Riza[1977] ECR 2175, at p. 2188, paragraph28 of the decision).

The ultimate objective of excluding"bankruptcy, proceedings relating to thewinding up of insolvent companies orother legal persons, judicialarrangements, compositions andanalogous proceedings" is to get asimple, centralized procedure whichproduces its effects in all the ContractingStates and, as far as concerns therecognition of the enforcement of

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GOURDAIN   NADLER

decisions in bankruptcy or proceedingsrelating to the winding up of insolventcompanies or other legal persons toensure that they produce their effectsimmediately and can be enforced atonce; it is only to this extent that aspecific solution is required.

Not every court decision relating tobankruptcy or proceedings relating tothe winding-up of insolvent companiesor other legal persons is thereforeexcluded from the scope of theConvention but only those which aredirectly connected with suchproceedings.

Moreover the text of the PreliminaryDraft of a Convention on bankruptcyand winding-up confirms this interpret­ation. Because of the considerable

differences found to exist between one

Member State and another it does not

contain any general definition ofbankruptcy and winding-up; on theother hand it lists the various bankruptcyand winding-up proceedings in eachMember State and a feature to be noted

is that the application provided for inArticle 99 of the French Law of 13 July1967 does not appear among thoseproceedings to which the futureConvention on bankruptcy andwinding-up is to be applied.

There is confirmation of this interpret­ation in Article 61 of the PreliminaryDraft of a Convention on bankruptcyand winding-up which provides that the"syndic" may bring actions concerningliability in order to defend the rights ofthe general body of creditors andexpressly provides that these actions fallwithin the field of application of thegeneral Convention. Moreover thisinterpretation is confirmed by theobjective of Article 99 of the FrenchLaw.

A comparison with Article 100 showsthat the "syndic" must first make anapplication, pursuant to Article 99, forcompensation for the damage suffered bythe company to be paid by the managers

of the said company if they have notmanaged the company with the requisiteenergy and diligence and it is only whenthe manager does not discharge hisliabilities that Article 100 provides for"règlement judiciaire" or "liquidationdes biens". The application made inaccordance with Article 99 may thereforebe considered as an action concerningliability and is only the first step inbankruptcy or winding-up proceedingswhich may be brought against themanager involved. Therefore theapplication made under Article 99 is anaction which is only instituted whenthere is a bankruptcy or winding-up.

With regard to general legal principles itshould finally be noted that in general itis civil or company law and not the lawof bankruptcy and the law relating to thewinding-up of companies which providesfor this type of legal application.For all these reasons the Commission

submits that the question referred by theBundesgerichtshof be answered asfollows:

"The decision of a French court based

on Article 99 of the French Law No

67-563 of 13 July 1967 which orders thede facto manager of a legal person to paya certain sum of money into the assets ofa company is a decision in a civil andcommercial matter within the meaning ofArticle 1 of the Convention on

jurisdiction and the enforcement ofjudgments in civil and commercialmatters and there are no grounds forregarding it as having been given inbankruptcy, winding-up or analogousproceedings."

D — Written observations of theGovernment of the FederalRepublic ofGermany

The Government of the Federal Republicof Germany is of the opinion that,according to the principles which theCourt of Justice laid down in Case 29/76LTU Lufttransportunternehmen GmbH &Co KG v Eurocontrol [1976] 2 ECR

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JUDGMENT OF 22. 2. 1979 — CASE 133/78

1541, at p. 1550, paragraph 3 of thedecision, the concepts "bankruptcy,proceedings relating to the winding-upof insolvent companies or other legalpersons, judicial arrangements, com­positions and analogous proceedings"used in subparagraph 2 of the secondparagraph of Article 1 of the Conventionon enforcement can be independentlyinterpreted directly on the basis of theobjectives and scheme of the Conventionwithout taking into consideration the lawof one of the Member States concerned.

This is the only appropriate method forobtaining an effective interpretation ofthe concept "analogous proceedings".Furthermore it is only in this way thatany uninterrupted link can be maintainedbetween the Convention on enforcement

and the Convention on bankruptcy andwinding-up which the Member States areat the present time preparing andlikewise it is only in this way that thescope of the Convention on enforcementcan similarly be made effective in itsentirety and that must apply even beforethe entry into force of the Conventionon bankruptcy and winding-up which isnow in draft form.

Subparagraph 2 of the second paragraphof Article 1 of the Convention on

enforcement was drawn up so as not toanticipate the preparatory work on aCommunity convention on bankruptcyand winding-up. Articles 12 and 61 ofthe Preliminary Draft of a Conventionon bankruptcy and winding-up readtogether prove that the latter is to beapplied, the Convention on executiononly applying in so far as specificreference is made to its application. Thisseparation of bankruptcy and winding-upmatters from civil matters is justified bythe circumstance that the recognition ofbankruptcy and winding-up decisions isgoverned by special principles derived inparticular from the fact that recognitionof the effects of general enforcement inother countries, in the context of

bankruptcy and winding-up proceedings,on property situated in national territory

would prove an appreciable obstacle tolegal proceedings on national territory,which could not be accepted without aspecific foundation in law, and to anencroachment on the sovereign powersof the State which has to recognize thedecision. This is why several MemberStates have so far objected to the

recognition of the effects which ageneral enforcement in other countriesmust have in their own territory.

The delimitation of the basic proceedingsin bankruptcy and winding-up isindicated in the Jenard report and in thecase of France, in the Schlosser report.

The recognition of individual decisionsmade in the basic bankruptcy orwinding-up proceedings in anotherMember State is meaningless unless theMember State which has to recognizethem also recognizes the bankruptcy orwinding-up in its entirety. That is thereason why the exception specified insubparagraph 2 of the second paragraphof Article 1 should, as far as concerns

proceedings of a subsidiary nature, beunderstood as meaning that it refers toall proceedings, but also only to thoseproceedings "arising directly from thebankruptcy and hence falling within thescope of the Bankruptcy Convention ofthe European Economic Community"(Jenard Report, Chapter III, IV, B). Thisinterpretation is also supported inter aliaby the fact that Article 27 of theConvention on enforcement does not

contain any provision which, in the caseof judgments given in the context ofbankruptcy or winding-up proceedings inconnexion with a particular applicationor contentious matter would allow a pre­liminary review similar to the reviewprovided for in Article 27 (4) of theConvention on enforcement in the case

of the exceptions listed in subparagraph1 of the second paragraph of Article 1.

An examination of French legislation andespecially of Article 99 of the FrenchLaw No 67-563 admits of the conclusion

that the object of the procedure provided

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GOURDAIN   NADLER

for in that Law, in the event of thewinding-up of a commercial company, isin fact to "go beyond the legal personand proceed against its managers, even ifthey are not themselves business men, inorder to penalize them for their misman­agement and in any case in order tomake possible a larger distribution to thecreditors" (Aubouin).

Thus the "liquidation des biens" exertsin general its influence on this procedurewhich enables the de facto manager'sproperty to be added to the assets of theinsolvent company.

It is with this in view that Article 12 of

the Preliminary Draft of a Convention ofthe European Communities onbankruptcy and winding-up givesexclusive jurisdiction to entertain suchactions concerning liability broughtagainst managers of companies to thecourts of the Contracting State in whicha winding-up order (of the legal person)has been made. In accordance with the

wishes of the Contracting States whichwere clearly expressed during thenegotiations on the Convention onenforcement the direct connexion with

the winding-up of the legal person makesit necessary to link such proceedings,also as far as concerns the recognition ofand the leave by way of exequatur toenforce such decisions exclusively, to the— future — field of application of thespecial Convention on bankruptcy andwinding-up.

Any other interpretation of subparagraph2 of the second paragraph of Article 1 ofthe Convention on enforcement entails

the risk of distorting the law ofbankruptcy and winding-up of certainMember States and does not take

account of the true nature of the

proceedings provided for in Law No67-563 as indicated in the context of this

Law.

In conclusion an order under Article 99

of the French Law 67-563 is directlyconnected with bankruptcy andwinding-up and does not fall within the

field of application of the Convention onenforcement. Having regard to theexisting wording of the texts it can onlybe enforced in the other Member States

of the Community by virtue of generalprinciples or, if any there be, on the basisof bilateral agreements concludedbetween Member States, since it can onlybe enforced on a multilateral basis after

the European Convention on bankruptcyand winding-up enters into force.

The question referred for a preliminaryruling by the Bundesgerichtshof shouldtherefore be answered as follows:

"Decisions founded on Article 99 of the

French Law No 67-563 of 13 July 1967,which order the de facto managers of alegal person to pay a certain sum into theassets of a company do not fall withinthe field of application of theConvention on enforcement in so far as

the decisions in question are made inbankruptcy or winding-up or analogousproceedings within the meaning ofsubparagraph 2 of the second subpara­graph of Article 1 of the Convention."

III — Oral procedure

The respondent in the main action,represented by Mr Jordan, theGovernment of the Federal Republic ofGermany, represented by Dr Pirrung andthe Commission of the EuropeanCommunities, represented by its LegalAdviser, Dr Bebr, acting as Agent,presented oral argument at the hearingon 18 January 1979.

They developed the arguments submittedin their written observations.

The representative of the GermanGovernment developed in greater detailshis arguments concerning the legal classi­fication of Article 99 of the French Law.

This article, which relates to the liabilityof managers, might be regarded, when ithas been analysed, as part of civil andcommercial law, but in fact it sets upvery special machinery concerningliability which only applies in bankruptcy

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JUDGMENT OF 22. 2. 1979 — CASE 133/78

and winding-up proceedings: it is thebankruptcy or winding-up which is thecause of the claim against the companywhich in turn is the cause of the

application concerning liability providedfor in Article 99 of the French Law.

The Commission of the EuropeanCommunities answered the questions putby the Court.

The Advocate General delivered his

opinion on 7 February 1979.

Decision

1 By an order of 22 May 1978 which was received at the Court Registry on12 June 1978 the Bundesgerichtshof [Federal Court of Justice], pursuant tothe Protocol of 3 June 1971 on the interpretation of the Convention of27 September 1968 on jurisdiction and the enforcement of judgments in civiland commercial matters (hereinafter referred to as "the Convention"),referred to the Court of Justice for a preliminary ruling a question on theinterpretation of subparagraph 2 of the second paragraph of Article 1 whichprovides that the Convention shall not apply to "bankruptcy, proceedingsrelating 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 Courd'Appel, Paris, dated 15 March 1976, which ordered the de facto manager ofa French company, in respect of which there had been a previous declarationthat the conditions existed for a "liquidation des biens", to bear a part of thecompany's debts pursuant to Article 99 of the French Law No 67-563 of 13July 1967 on the "règlement judiciare", the "liquidation des biens", the"faillite personnelle" <appnote>1</appnote> and "banqueroutes".<appnote>1</appnote> The "syndic" <appnote>1</appnote> of the saidcompany has applied for leave to enforce the order in the Federal Republicof Germany submitting that it relates to a special case concerning civilliability which falls within the field of application of the first paragraph ofArticle 1 of the Convention.

The Oberlandesgericht [Higher Regional Court] Frankfurt, before thematter was brought before the Bundesgerichtshof, refused an application forleave by way of exequatur to enforce the order on the grounds that the orderin personam under Article 99 of the French Law, which is not known in theGerman legal system, did not come within the scope of decisions in civil andcommercial matters covered by the Convention but was part of theproceedings for the "liquidation des biens".

1 — See Note 1, p. 735.

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It is in these circumstances that the Bundesgerichtshof has referred to theCourt the following question:

"Is a judgment given by French civil courts on the basis of Article 99 of theFrench Law No 67-563 of 13 July 1967 against the de facto manager of alegal person for payment into the assets of a company in liquidation to beregarded as having been given in bankruptcy proceedings, proceedingsrelating to the winding-up of insolvent companies or other legal persons andanalogous proceedings (subparagraph 2 of the second paragraph of Article 1of the Convention) or is such a judgment a decision given in a civil andcommercial matter (first paragraph of Article 1 of the Convention)?"

3 The Convention, the particular aim of which is to secure the simplification offormalities governing the reciprocal recognition and enforcement ofjudgments of courts and tribunals and to strengthen in the Community thelegal protection of persons who are established there has laid down as amatter of principle that its scope includes "civil and commercial matters"without however defining this expression.

However because of the special nature of certain matters and of theprofound differences between the laws of the Contracting States theConvention does not apply to certain fields including "bankruptcy,proceedings relating to the winding-up of insolvent companies or other legalpersons, 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, inorder to ensure, as far as possible, that the rights and obligations whichderive from it for the Contracting States and the persons to whom it appliesare equal and uniform, that the terms of that provision should not beinterpreted as a mere reference to the internal law of one or other of theStates concerned.

By providing that the Convention shall apply "whatever the nature of thecourt or tribunal" the first paragraph of Article 1 shows that the concept of"civil and commercial matters" cannot be interpreted solely in the light ofthe division of jurisdiction between the various types of courts existing incertain States.

The concepts used in Article 1 must be regarded as independent conceptswhich must be interpreted by reference, first, to the objectives and scheme ofthe Convention and, secondly, to the general principles which stem from thecorpus of the national legal systems.

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4 As far as concerns bankruptcy, proceedings relating to the winding-up ofinsolvent companies or other legal persons, judicial arrangements,compositions and analogous proceedings, according to the various laws ofthe Contracting Parties relating to debtors who have declared themselvesunable to meet their liabilities, insolvency or the collapse of the debtor's cre­ditworthiness, which involve the intervention of the courts culminating in thecompulsory "liquidation des biens" in the interest of the general body ofcreditors of the person, firm or company, or at least in supervision by thecourts, it is necessary, if decisions relating to bankruptcy and winding-up areto be excluded from the scope of the Convention, that they must derivedirectly from the bankruptcy or winding-up and be closely connected withthe proceedings for the "liquidation des biens" or the "règlement judiciaire".

In order to answer the question referred to the Court by the national court itis therefore necessary to ascertain whether the legal foundation of anapplication such as that provided for in Article 99 of the French Law is basedon the law relating to bankruptcy and winding-up as interpreted for thepurposes of the Convention.

5 The application under Article 99, called an application to make good adeficiency in the assets, for which special provision is made in a law onbankruptcy and winding-up is made only to the court which made the orderfor the "règlement judiciaire" or the "liquidation des biens".

It is only the "syndic" — apart from the court which can make the order ofits own motion — who can make this application on behalf of and in theinterest of the general body of creditors with a view to the partialreimbursement of the creditors by respecting the principle that they rankequally and by taking account of any preferential rights lawfully acquired.

In this application, which derogates from the general rules of the law ofliability, the de jure or de facto managers of the company are presumed to beliable and they can only discharge this burden by proving that they managedthe affairs of the company with all the requisite energy and diligence.

The period of limitation of three years for the application runs from the datewhen the final list of claims is drawn up and is suspended for the duration ofany scheme of arrangement which may have been entered into and begins torun again if such a scheme is terminated or declared void.

If the application directed against the manager of the company succeeds it isthe general body of creditors which benefits, some assets being added to thefunds to which they are entitled, as happens where the "syndic" establishes aclaim which benefits the general body of creditors.

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Furthermore, the court may order the "règlement judiciaire" or the"liquidation des biens" of those managers who have been made responsiblefor part or all of the liabilities of a legal person and who do not dischargethe said liabilities, without having to verify whether the said managers arebusiness men and whether they are unable to meet their liabilities.

6 It is quite apparent from all these findings that the legal foundation of Article99, the object of which, in the event of the winding-up of a commercialcompany, is to go beyond the legal person and proceed against its managersand their property is based solely on the provisions of the law of bankruptcyand winding-up as interpreted for the purpose of the Convention.

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 alegal person to pay a certain sum into the assets of a company must beconsidered as given in the context of bankruptcy, proceedings relating to thewinding-up of insolvent companies or other legal persons or analogousproceedings within the meaning of subparagraph 2 of the second paragraphof Article 1 of the Convention.

Costs

7 The costs incurred by the Commission of the European Communities and bythe Government of the Federal Republic of Germany, which have submittedobservations pursuant to Article 20 of the Protocol on the Statute of theCourt of Justice of the EEC, are not recoverable.

As these proceedings are, in so far as the parties to the main action areconcerned, in the nature of a step in the action pending before the Bun­desgerichtshof, the decision as to costs is a matter for that Court.

On those grounds,

THE COURT,

in answer to the question referred to it by the Bundesgerichtshof by an orderof 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 managerof a legal person to pay a certain sum into the assets of a company must

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OPINION OF MR REISCHL — CASE 133/78

be considered as given in the context of bankruptcy, proceedings relatingto the winding-up of insolvent companies or other legal persons oranalogous proceedings within the meaning of subparagraph 2 of thesecond paragraph of Article 1 of the Convention.

Kutscher Mertens de Wilmars Mackenzie Stuart Donner Pescatore

Sørensen O'Keeffe Bosco Touffait

Delivered in open court in Luxembourg on 22 February 1979.

A. Van Houtte

Registrar

H. Kutscher

President

OPINION OF MR ADVOCATE GENERAL REISCHL

DELIVERED ON 7 FEBRUARY 1979 <appnote>1</appnote>

Mr President,Members of the Court,

In March 1974 proceedings were begunfor the winding-up of the French limitedliability company "Fromme FranceManutention", Paris, after the Germanparent company had become insolvent.The applicant and appellant on a pointof law in the main proceedings, in whichthe present request for a preliminaryruling originated, was appointed "syndic[liquidator or trustee for the creditors]".<appnote>2</appnote>Since the assets of the French companywere not sufficient to pay its debts, inJune 1974, on application by the"syndic", the defendant and respondenton a point of law in the main action,who had been managing director of theGerman parent company and —

apparently since 1971 — also managingdirector of the French company, was asde facto manager of the French companymade a party to the proceedings for thewinding-up of that company. This wasdone pursuant to French Law No 67-753of 13 July 1967 on the "règlementjudicaire [administration of the affairs ofan insolvent person, firm or companyexpected to continue in business underthe supervision of the court]",<appnote>2</appnote> the"liquidation des biens [the winding-up ofan insolvent person, firm or company notexpected to continue in business]",<appnote>2</appnote> the"faillite personnelle [mandatory oroptional deprivation or prohibition bythe Court of the exercise of rightsrequired to carry on business when the

1 — Translated from the German.

2 — Translator's note. The English terms given do notpurport to be exact equivalents of the French terms,since concepts in the different legal systems are notidentical.

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