Insolvency challenges and state immunity

On 16.01.2025, the IX Civil Senate of the Federal Court of Justice referred the question to the European Court of Justice in an insolvency law avoidance case (case no. IX ZR 60/24) against the Polish tax authorities as to whether Art. 6 (1) EU Insolvency Regulation contains an implicit waiver of the principle of state immunity by the EU Member States with regard to the recognition of foreign insolvency proceedings if an insolvency administrator asserts under the applicable insolvency law that legal acts (such as payments) are contestable due to creditor prejudice.

A payment by the debtor domiciled in Germany for a registered import sales tax in the Republic of Poland pursuant to Section 130 (1) no. 2 InsO was contested. The later insolvency debtor informed the defendant - the Polish tax authorities - in November 2012 that it had filed for insolvency. After this, the insolvency debtor nevertheless made two more payments to the defendant in respect of VAT. After the opening of insolvency proceedings, the insolvency administrator (plaintiff) asserted avoidance claims against the Polish tax authorities pursuant to sections 130 (1) no. 2 and 143 InsO and requested the return of the two payments. The lower courts had dismissed the action brought against the Polish tax authorities as inadmissible and justified their decisions by stating that German jurisdiction was not available for the action for avoidance brought by the plaintiff in accordance with the principle of state immunity (Section 20 (2) GVG, Article 25 GG). The Court of Appeal (OLG Karlsruhe, Ref. 3 U 43/23), whose decision has attracted a great deal of attention in practice, has allowed an appeal against its ruling.

The legal issues to be decided are highly complex. Is an acta iure imperii (a legal act of a sovereign nature) even involved in the contested payments as legal acts pursuant to Section 129 InsO and is an indirect connection with the tax declaration or tax assessment sufficient in this respect? Is the principle of state immunity under international law relevant to avoidance claims that do not affect the legality of the tax assessment between the EU Member States? How are the provisions of the EU Insolvency Regulation of 20.05.2015 (Regulation EU 2015/848) - which in Section 6 (1) establish international jurisdiction for the courts of the Member State in which the insolvency proceedings have been opened and in Section 7 the law of that Member State as the applicable law - to be classified with regard to contested tax payments? Are secondary insolvency proceedings in Poland regarding the claims necessary and even possible?

The BGH stayed the proceedings and referred the question to the ECJ for a preliminary ruling under Article 267 TFEU as to whether Article 6(1) of Regulation (EU) 2015/848 (EU Insolvency Regulation) is to be interpreted as containing an implied waiver by the Member States of the European Union of the principle of sovereign immunity for actions by which the insolvency administrator asserts, in accordance with the applicable insolvency law, that legal acts against a Member State are voidable because they are detrimental to all creditors.

A very important and interesting insolvency law issue for insolvency proceedings with cross-border situations in the EU. Clarification by the ECJ is eagerly awaited.

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