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COMI-Shift: Galapagos BidCo, C-723/20

Which insolvency court is competent to open the insolvency proceedings in a case where two different courts in two different Member States have been solicitated?


Preliminary Question

The main question raised in the case Galapagos BidCo. , C-723/20, is whether the courts of the Member State within the territory of which the centre of the debtor’s main interests is situated at the time when the debtor lodges the request to have insolvency proceedings opened retain international jurisdiction to open those proceedings if the debtor moves the centre of its main interests to the territory of another Member State after lodging the request but before the decision opening insolvency proceedings is delivered.

Judgement of the Court

The European Court of Justice has decided in the case Galapagos BidCo that Article 3(1) of Regulation 2015/848 must be interpreted as meaning that the court of a Member State with which a request to open main insolvency proceedings has been lodged retains exclusive jurisdiction to open such proceedings where the centre of the debtor’s main interests is moved to another Member State after that request has been lodged, but before that court has delivered a decision on it. Consequently, in so far as that regulation is still applicable to that request (Brexit in this case), the court of another Member State with which another request is lodged subsequently for the same purpose cannot, in principle, declare that it has jurisdiction to open main insolvency proceedings until the first court has delivered its decision and declined jurisdiction.

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Factual context

Galapagos is a holding company with its registered office in Luxembourg. In June 2019, it decided to move its central administration to Fareham (United Kingdom). On 22 August 2019, its directors, who had been appointed on 13 June 2019, lodged a request to open insolvency proceedings before the High Court of Justice (England and Wales), United Kingdom (‘the High Court’).

However, the following day, those directors were removed at the instigation of a group of creditors holding a share pledge and were replaced by a new director. The latter set up an office in Düsseldorf (Germany) for Galapagos and instructed the lawyers representing Galapagos to withdraw the request to open insolvency proceedings. However, that withdrawal did not take place because a group of creditors had joined that request. The High Court was yet to deliver a decision on that request.

On 23 August 2019, Galapagos lodged another request to open insolvency proceedings, this time before the Amtsgericht Düsseldorf (Germany), which appointed a temporary insolvency administrator and ordered preservation measures. However, on 6 September 2019, that court, hearing an immediate appeal brought by creditors, revoked its order and dismissed Galapagos’s request as inadmissible on the ground that it lacked jurisdiction.

On 6 September 2019, creditors of Galapagos lodged another request to open insolvency proceedings with the Amtsgericht Düsseldorf. The court, taking the view that the centre of Galapagos’s main interests was in Düsseldorf when that request was made, ordered the opening of the insolvency proceedings over the assets of Galapagos.

Galapagos Bidco., which is both a subsidiary and a creditor of Galapagos, brought an immediate appeal before the Landgericht Düsseldorf (Regional Court, Düsseldorf, Germany) in its capacity as creditor by which it sought to have the order of 9 September 2019 set aside, arguing that the Amtsgericht Düsseldorf (Local Court, Düsseldorf) did not have international jurisdiction, since Galapagos’s central administration had been transferred to Fareham in June 2019. That appeal was dismissed by order of 30 October 2019, and Galapagos BidCo., then brought an appeal before the Bundesgerichtshof (Federal Court of Justice, Germany).

At the time of filing the reference for a preliminary ruling by the German BGH on 17 December 2020, the High Court had not yet ruled on the insolvency petition.

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