Cross-Border Insolvency

ECJ, ERSTE Bank Hungary, C -527/10, July 05, 2012

The question referred to the European Court of Justice was whether the Article 5(1) of Council Regulation (EC) No. 1346/2000 dated May 29, 2000 regarding insolvency proceedings was applicable in the context of civil proceedings concerning the existence of a right in rem, Namely, the question pertained to a security circumstance in which the property to which that right referred, such as a sum of money paid into court, was situated in a state which had not yet been a Member State of the European Union when the insolvency proceedings had been opened in an Member State, but which then became a Member State when the action which gave rise to the judicial proceedings had been brought.

First, ECJ stated that the Regulation itself applied ratione temporis, as insolvency proceedings were opened in a Member State after its entry into force set for May 31, 2002.

ECJ reiterated then that, following from Articles 16(1) and 17(1) of the Regulation,,the judgment opening insolvency proceedings in a Member State was to be recognized in all other Member States from the time that it became effective in the State of the opening of the proceeding, adding that it was with no further formalities to produce the same...