The complications of concurrent jurisdiction—Comite d’entreprise de Nortel networks SA and others v Rogeau

The complications of concurrent jurisdiction—Comite d’entreprise de Nortel networks SA and others v Rogeau

Can several courts have concurrent jurisdiction to decide the same issue? Stefan Ramel, a barrister at Guildhall Chambers, examines a recent ruling in Europe and attempts to simplify the matter.

Original news

Comite d’entreprise de Nortel networks SA and others v Rogeau: C-649/13 [2015] All ER (D) 143 (Jun)

The Court of Justice of the European Union (CJEU) gave a preliminary ruling, deciding, among other things, that arts 3(2) and 27 of Council Regulation (EC) 1346/2000 on insolvency proceedings (the EC Reg) should be interpreted as meaning that the courts of the member state in which secondary insolvency proceedings had been opened had jurisdiction concurrently with the courts of the member state in which the main proceedings had been opened, to rule on the determination of the debtor’s assets falling within the scope of the effects of those secondary proceedings.

How did the issue arise, and what was the chronology?

The comité d’entreprise of Nortel Networks SA (NNSA) started proceedings seeking relief relating to a sum of money standing to the credit of NNSA’s account. Specifically, it sought relief in relation to whether those funds could be used to make a deferred severance payment to employees that NNSA was contractually obliged to make pursuant to a memorandum settling action entered into with those employees on 21 July 2009—post-insolvency and after the secondary proceedings were opened. The French insolvency practitioner, Mr Rogeau, had not made the payment because, under a coordinating protocol dated 1 July 2009 entered into between the English and French insolvency proceedings, certain expenses had to be paid first. Mr Rogeau sought to join the English administrators in the comité d’entreprise’s action.

Does the EC Reg apply?

The CJEU concluded that the EC Reg applies to the proceedings. It reached that conclusion on the basis that the rights and obligations on which the action before the French court was based derived directly from insolvency proceedings, and were closely connected with the case. It does not appear, however, that the CJEU supplied its reasons for reaching that particular conclusion. Plainly, it would have assisted practitioners if it had done.

Which court has jurisdiction to hear the dispute—the French courts (secondary proceedings) or English court (main proceedings)?

Both. The CJEU considered that the English court

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About the author:

Stephen qualified as a solicitor in 2005 and joined the Restructuring and Insolvency team at Lexis®PSL in September 2014 from Shoosmiths LLP, where he was a senior associate in the restructuring and insolvency team.

Primarily focused on contentious and advisory corporate and personal insolvency work, Stephen’s experience includes acting for office-holders on a wide range of issues, including appointments, investigations and the recovery and realisation of assets (including antecedent transaction claims), and for creditors in respect of the impact on them of the insolvency of debtors and counterparties.