March 2025 at the Court of Justice of the European Union (Further Update)
On 27 March 2025, the Court of Justice will hand down the judgment in case C-186/24, Auto1 European Cars.
The request for a preliminary ruling arises in relation to insolvency proceedings opened by the Landesgericht Linz (Regional Court of Linz) on May 2022. The main dispute opposes the insolvency practitioner to Auto1, a company headquartered in the Netherlands with a branch in Austria. it concerns the payment, which should (allegedly) have been made to the insolvency estate, of an amount corresponding to the value of a vehicle sold by the insolvent debtor to Auto1.
On 2 June 2022, the debtor sold a car to Auto1 for EUR 48,870. After the car was handed over in Austria, Auto1 paid the agreed purchase price into a German bank account provided by the debtor.
The insolvency practitioner filed a claim against Auto1 seeking payment of EUR 48,870, arguing that the car had been sold after the opening of the insolvency proceedings.
Auto1 contested this claim, arguing that the vehicle had not been in the debtor’s possession at the time when the insolvency proceedings were opened, and had therefore not been part of the insolvency estate. It contended that it maintained only a branch in Austria, but was established in the Netherlands, and that it – and not the Austrian branch – had made the credit transfer in Germany from a German bank. By way of consequence, the only domestic connection of the contract of sale at issue was that it had been signed in Austria and the vehicle had been handed over there. It further argued that the claim asserted by the appellant did not exist, because the foreign connection entailed the applicability of Article 31 of Regulation 2015/848. It claimed that it could only be held liable if it had known about the opening of insolvency proceedings, which had not been the case.
[NoA: according to said Article 31, ‘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 insolvency practitioner in those proceedings, the person honouring the obligation shall be deemed to have discharged it if he was unaware of the opening of the proceedings’]
Seized on appeal (Rekurs) by the insolvency practitioner, the Austrian Supreme Court has referred the following questions to the CJEU:
- Is Article 31(1) of Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (‘the 2015 Insolvency Regulation’) to be interpreted as meaning that obligations honoured for the benefit of the debtor which should have been honoured for the benefit of the practitioner in the insolvency proceedings also include, within the meaning of that provision, such obligations arising from a legal transaction which the debtor did not conclude until after the opening of insolvency proceedings and the transfer of powers to the insolvency practitioner?
If the above question is answered in the affirmative:
- Is Article 31(1) of Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (‘the 2015 Insolvency Regulation’) to be interpreted as meaning that the place in which an obligation is honoured within the meaning of that provision is the place from which the third party’s payment is made by credit transfer from a bank account there, even if the third party is established not in that Member State but in another Member State, while the conclusion of the legal transaction and the honouring of the debtor’s obligation took place not there but through a branch of the third party in yet another Member State, namely in the Member State in which the insolvency proceedings have been opened?
The decision will be taken by judges M. Gavalec, K. Jürimäe (reporting), and Z. Csehi. An opinion was not requested.