ECJ guidance on effect of moratoriums under the Credit Institutions Directive

ECJ guidance on effect of moratoriums under the Credit Institutions Directive

Can a moratorium under Icelandic law bind French creditors? Does Icelandic or French law govern the situation? Can an Icelandic bank lift the attachment orders served by the French creditor?

LBI hf v Kepler Capital Markets SA C-85/12 [2013] All ER (D) 301 (Oct)

A French creditor served attachment orders on a third party to guarantee payment of claim against Icelandic credit institution, LBI hf (formerly Landsbanki Islands hf) (LBI). The European Court of Justice (ECJ) made a preliminary ruling on the interpretation of Directive 2001/24/EC on the reorganisation and winding up of credit institutions (the Credit Institutions Directive). The proceedings were between an LBI, Kepler Capital Markets SA (Kepler) and Mr Giraux (the French creditor) and concerned two attachment orders instituted in France by Mr Giraux against LBI and LBI’s moratorium.

What are the key points of this case?

The ECJ confirmed that:

• a moratorium is a reorganisation or winding up measure under the Credit Institutions Directive
• the Credit Institutions Directive doesn’t preclude retrospective national provisions (here, the retrospective Icelandic moratorium provisions)—they could be effective against actions commenced in another member state (the French attachment orders) before the declaration of the moratorium
• the exception relating to lawsuits pending covers only proceedings on the substance, not individual enforcement actions arising from those lawsuits (eg attachment orders, as here)—individual enforcement actions are therefore governed by the lex concursus (law of the country where a court has opened insolvency proceedings, here, Icelandic law)

How did the issues arise?

The dispute arose after a LBI sought to lift attachment proceedings served in France by a cre

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About the author:
Kathy specialises in restructuring and cross-border insolvency. She qualified as a solicitor in 1995 and has since worked for Weil Gotshal & Manges and Freshfields. Kathy has worked on some of the largest restructuring cases in the last decade, including Worldcom, Parmalat, Enron and Eurotunnel.