CJEU: Derogation From Lex Concursus Should Be Interpreted Strictly

The author of this post is Anna Warberg who is a Senior Lecturer in Private Law at the University of Gothenburg.

On March 19, 2026, the Court of Justice rendered its judgment in SML, C-43/25, addressing the applicability of art. 13 of the Insolvency Regulation (1346/2000). The judgment clarifies that art. 13, containing a derogation from the general principle of lex concursus, should be interpreted strictly.

Background

The case concerns two companies, SML and Maplan. SML had granted two loans to Maplan, and Maplan had made payments and paid interest to SML towards the loans in question. Later, however, insolvency proceedings were opened against Maplan in Germany. SML brought an action before the German court requesting that the claims SML held regarding the loans would be entered in the liabilities of Maplan, as well as seeking preferential rights over claims that had been assigned to the first of the two loans as a security. The insolvency administrator disputed these requests and sought restitution of the sum and interest that Maplan had paid to SML, by way of an action to set aside the transactions due to insolvency.

One of the questions before the German courts in this case was what law should be applied. According to the referring court, an application of German law, lex concursus, meant that SML would be required to pay back what had been paid by Maplan, as SML’s claims would be regarded as lower ranking claims. SML argued that Austrian law should be applied because this was stipulated in the agreements of the loans. In that case, arguably, the loans could not be challenged.

The referring court thus asked for a clarification regarding the interpretation of art. 13 of the Insolvency Regulation. According to art. 4.2 (m) the law of the State of the opening of proceedings determines the rules relating to the voidness, voidability or unenforceability of legal acts detrimental to all the creditors. This provision is however according to art. 13 not applicable where the person who benefited from the detrimental act provides proof that the act is subject to another Member State’s law and that that law does not allow any means of challenging that act in the relevant case.

The first question asked by the referring court is thus, in short, whether the exception in art. 13 is applicable in this case. The referring court also asked further questions regarding the exception in art. 13, but these were not answered by the Court of Justice given the answer to the first question.

Judgment

As a starting point, the Court of Justice notes that it is not giving a ruling on the interpretation of national law and that it relies on the explanations provided by the referring court. The Court also notes that the request made by the insolvency administrator, in support of the action to set aside, seems to relate to the order of priority of creditors and their claims, rather than a competitive situation between creditors of the same rank. In this context, the Court thus interprets the main question from the referring court as whether a person can rely on art. 13 in response to a request for restitution submitted by the insolvency administrator, where the request seeks to ensure compliance with the ranking of claims according to lex concursus.

According to the Court, art. 13 must be interpreted strictly, given that it is an exception from art. 4.2 (m). The scope of the article should therefore be limited to the situations as envisaged in that article. That is, regarding issues relating to the voidness, voidability or unenforceability of legal acts detrimental to all the creditors. This does not include, according to the Court, rules relating to the ranking of claims or the claims to be lodged against the debtor´s estate. On the contrary, these issues are expressly regulated in art. 4.2 (g) and (i), and those articles are not included in the exception in art. 13. The Court thus concludes that the exception in art. 13 is not applicable regarding the specific question from the referring court in the case.

Comment

The judgment reinforces earlier case law regarding art. 13. The article, being an exception to the general rule of lex concursus, must thus be interpreted strictly and only relating to the specific situations envisaged in art. 4.2 (m). Given the Court’s interpretation of the issues of the case and that they were related to compliance with the ranking of claims, and not for instance the voidness of a legal act, the judgment may not be very surprising. It highlights, however, the relevance of how the issue at hand is interpreted, or categorized, by the Court as well as by the referring court.

The judgment is certainly also of interest when applying the recast Insolvency Regulation (2015/848). The corresponding art. 16 and art. 7.2 (m) respectively in the recast regulation have the same wording and were, in this regard, not changed during the revision of the regulation. The Court of Justice has also in its case-law regarding the revised regulation emphasized the need to interpret provisions strictly when they derogate from the main principle of lex concursus in the regulation, see Air Berlin, Joined Cases C-765/22 and C-772/22, p. 56-58.