Knocking on different doors: the CJEU’s new roadmap for cross-border claims in insolvency

Key points

• When can a creditor pursue a claim against an insolvent debtor in an EU member state different from where the insolvency proceedings are taking place? This question, which sits at the intersection of cross-border insolvency law and civil jurisdiction, was recently addressed by the Court of Justice of the European Union (CJEU) in Oilchart International NV v O.W. Bunker (Netherlands) BV (Case C-394/22). The judgment provides important clarification on the relationship between the Brussels Recast Regulation (No 1215/2012) and the Insolvency Regulation (No 1346/2000), particularly regarding the scope of insolvency-related exclusions from civil jurisdiction rules.
•  The case illuminates a common practical challenge in cross-border commerce: when a creditor has both lodged a claim in insolvency proceedings in one member state but also wishes to pursue separate legal proceedings in another member state. The CJEU’s ruling offers significant guidance on how courts should approach this jurisdictional puzzle, emphasising the role of the lex fori concursus (the law of the state where insolvency proceedings are opened) in determining the permissibility of such parallel proceedings.
•  The court’s approach represents a nuanced understanding of the distinction between jurisdictional rules and applicable law in cross-border insolvency scenarios. By focusing on the underlying legal basis of claims rather than their procedural context, the CJEU has effectively drawn a line between actions that genuinely derive from insolvency proceedings and those that merely coincide with them. This distinction is crucial for practitioners navigating the complex landscape of cross-border debt recovery in the EU, particularly when dealing with insolvent debtors who have assets or operations across multiple jurisdictions.

Background

The dispute arose from a straightforward commercial transaction that evolved into a complex cross-border legal battle.

On 21 October 2014, Oilchart International NV (Oilchart), a Belgian company, provided bunkering services to the vessel Evita K at the port of Sluiskil in the Netherlands, acting on behalf of O.W. Bunker Netherlands BV (OWB). The following day, Oilchart issued an invoice to OWB for USD 116,471.45 (approximately EUR 107,229.44) for the fuel delivered.

The commercial relationship soon became complicated when, on 21 November 2014, OWB was declared insolvent by the District Court in Rotterdam. Oilchart responded to this development with a two-pronged approach: it submitted its claim for verification by OWB’s liquidators in the Netherlands insolvency proceedings, while simultaneously pursuing a series of precautionary vessel seizures to secure its position. These seizures led to bank guarantees being issued in Oilchart’s favor, which could be invoked based on either a Belgian court ruling or arbitral award against OWB or the relevant vessel owner.

The legal complexity intensified when, on 11 March 2015, Oilchart initiated proceedings before the Commercial Court in Antwerp against OWB, seeking payment of the unpaid invoice. ING Bank, which had an interest in the matter as an assignee of OWB’s claim in consideration for credit provided, intervened voluntarily in these proceedings. While the Belgian Commercial Court accepted it had jurisdiction, it ultimately declared Oilchart’s action inadmissible based on Netherlands insolvency law. This decision led to an appeal before the Antwerp Court of Appeal, which would eventually seek guidance from the CJEU on this intricate jurisdictional question.

This factual matrix presented the courts with a classic example of the tensions that can arise in cross-border insolvency situations, particularly when creditors attempt to pursue parallel paths of recovery in different jurisdictions. The key question that emerged was whether Oilchart’s Belgian proceedings were permissible given the existing Dutch insolvency proceedings, or whether they were precluded by the special jurisdictional rules governing insolvency matters in the EU.

Legal issues before the court

The central question before the CJEU required a careful navigation of the intersection between two key EU regulations: the Brussels Recast Regulation (No 1215/2012) governing civil and commercial matters, and the Insolvency Regulation (No 1346/2000). Specifically, the court needed to determine whether Oilchart’s action in Belgium fell within the scope of the insolvency exclusion under Art 1(2)(b) of the Brussels Recast Regulation.

The court had to address two fundamental issues:

• First, it needed to determine whether an action for payment brought against an insolvent company in one member state, which makes no mention of ongoing insolvency proceedings in another member state, falls within the scope of the insolvency exclusion. This required the court to apply its established “direct derivation and close connection” test – examining whether the action derives directly from insolvency proceedings and is closely connected with them.
• Second, and perhaps more significantly, the court had to consider the relationship between jurisdictional rules and applicable law in cross-border insolvency scenarios. This raised the complex question of whether the mere fact that a claim has been lodged in insolvency proceedings in one member state precludes parallel proceedings in another member state, or whether this question should be determined by the law of the state where the insolvency proceedings were opened (lex fori concursus).

The Antwerp Court of Appeal specifically sought guidance on whether Art 25(2) of the Netherlands Financial Law (NFW), which appeared to allow certain claims to be brought outside the insolvency proceedings, was compatible with Art 3(1) of the Insolvency Regulation. This raised broader questions about the interaction between national insolvency laws and EU jurisdictional rules.

Analysis

The CJEU’s decision represents a sophisticated reconciliation of competing principles in cross-border insolvency law, with far-reaching implications for creditors and insolvency practitioners across the EU. At its core, the judgment establishes a clear analytical framework that prioritises substance over form in determining jurisdictional questions.

The court’s two-step analysis

In what may be its most significant contribution, the court articulated a clear two-step approach to determining whether an action falls within the insolvency exclusion.

• First, the court emphasised that the decisive factor is not the procedural context of the action, but rather its legal basis. This means looking beyond the superficial characteristics of the claim to examine whether the right or obligation at its heart stems from ordinary civil and commercial law or from specific insolvency rules.
• Second, the court considered the closeness of the connection between the action and the insolvency proceedings.

A victory for commercial reality

The court’s approach represents a triumph of commercial pragmatism over formal categorisation. By holding that Oilchart’s claim for payment – based on a pre-insolvency contract for goods delivered – remained fundamentally a commercial law matter, the court recognised that the mere existence of parallel insolvency proceedings does not automatically transform the nature of such claims. This is particularly significant for creditors who may need to pursue multiple paths to recovery, especially where bank guarantees or other security interests are involved.

The lex fori concursus principle: a subtle, but crucial distinction

Perhaps the most sophisticated aspect of the court’s reasoning lies in its treatment of the relationship between jurisdiction and applicable law. While the court found that the Brussels Recast Regulation could apply to the Belgian proceedings (meaning they were not automatically precluded), it emphasised that the actual admissibility of such parallel proceedings would be governed by the law of the state where insolvency proceedings were opened (in this case, Dutch law). This nuanced approach achieves two important objectives:

• it preserves the integrity of the EU’s jurisdictional framework while;
• it respects the primacy of insolvency law in determining how claims against an insolvent debtor should be treated.

Practical implications

The judgment has several important practical consequences for stakeholders in cross-border insolvency scenarios:

1. Creditors now have clearer guidance on when they can pursue claims in courts outside the jurisdiction of the main insolvency proceedings.
2. The decision reinforces the importance of understanding the insolvency law of the state where main proceedings are opened, as this will ultimately determine the admissibility of parallel proceedings.
3. The ruling may encourage more strategic use of security interests and guarantees that can be enforced outside of main insolvency proceedings.

Future considerations

While the judgment provides welcome clarity, it also raises interesting questions about the potential for forum shopping and the need for harmonisation of substantive insolvency laws across the EU. Creditors may now be incentivised to structure their transactions in ways that maximise their ability to pursue claims in multiple jurisdictions, while still respecting the primacy of the lex fori concursus.

The CJEU’s decision opens important strategic opportunities for practitioners handling cross-border insolvency matters, while simultaneously highlighting the complexities they must navigate. At the heart of the practical implications lies a delicate balance: while creditors may now have clearer pathways to pursue claims in courts outside the main insolvency jurisdiction, they must carefully consider how such actions interact with the governing insolvency law of the state where main proceedings are opened.

For practitioners advising clients in cross-border transactions, this means adopting a more nuanced and strategic approach to both transaction planning and dispute resolution. The familiar practice of securing rights through mechanisms like bank guarantees or other security interests takes on renewed significance, as these instruments may provide valuable alternatives for enforcement independent of insolvency proceedings. However, such strategies must be carefully weighed against the risk of challenge under the applicable insolvency law.

The judgment also underscores the critical importance of understanding national insolvency laws in relevant jurisdictions. Gone are the days when a superficial understanding of the EU insolvency framework sufficed; practitioners must now develop a deeper appreciation of how different national insolvency regimes treat parallel proceedings. This may often necessitate obtaining local law advice early in the transaction planning stage, particularly in jurisdictions where enforcement might eventually be sought.

Documentation practices also merit careful consideration. The way claims are documented and presented can significantly impact their characterisation as either insolvency-related or ordinary commercial claims. This distinction, as the CJEU’s decision makes clear, can have profound implications for jurisdictional questions. Practitioners should, therefore, ensure clear documentation of the underlying commercial relationship and maintain detailed records that could help establish the independent commercial nature of their claims.

When advising clients who are creditors of potentially distressed companies, practitioners must now engage in a more sophisticated cost-benefit analysis. This includes weighing the relative merits of participating in insolvency proceedings versus pursuing separate actions, considering the cost implications and likelihood of success in different jurisdictions, and evaluating how different enforcement strategies might affect overall recovery prospects.

Looking forward, the increased potential for forum shopping and the complex interplay between EU regulations and national insolvency laws suggests that this area will continue to evolve. Practitioners must stay attuned to developments in relevant national insolvency laws and their potential impact on cross-border recovery strategies. The key to successful navigation of this landscape lies in combining sophisticated legal analysis with practical commercial judgment, always keeping in mind that while the CJEU has clarified the jurisdictional framework, the ultimate success of any strategy will depend on its careful execution within the constraints of applicable national insolvency laws.

In conclusion, while the Oilchart decision provides welcome clarity on important jurisdictional questions, it also serves as a reminder of the complexity inherent in cross-border insolvency matters. Success in this area requires not just understanding the legal framework, but also developing sophisticated strategies that take into account the interplay between EU regulations, national insolvency laws, and practical commercial considerations.

The CJEU’s message is clear: you can chase your debtor across borders, but insolvency law is a homebody.

Article by Callum Red-Hutchings – first published by LexisNexis (Corporate Rescue and Insolvency, February 2025)