The JUDGMENT OF THE COURT of 10 March 2022 in case C 498/20, analyses the following case concerning the liability of the holding company towards its subsidiary for the termination of the financial support, which led to the declaration of insolvency of the subsidiary.
BMA NL and its holding company, BMA Groep BV, are companies established in the Netherlands. BMA AG, established in Germany, is the holding company of BMA Groep and therefore the ultimate holding company of BMA NL. BMA Groep, which has a 100 % shareholding in BMA NL, is its exclusive administrator.
Between 2004 and 2011, BMA AG granted loans to BMA NL for a total amount of EUR 38 million. At the beginning of 2012, BMA AG terminated the financial support to BMA NL. BMA NL then filed for insolvency proceedings.
ZK brought an action against BMA AG for delictual or quasi-delictual liability brought by an insolvency administrator against a third party alleged to have participated in causing damage to the creditors of an insolvent company. The action is brought in favour of the creditors as a whole, but not on their behalf, and is for the purpose of recovering their claims.
ZK claims that BMA AG acted in breach of its duty of care towards all of BMA NL’s creditors and that BMA AG is liable for the loss suffered by them.
According to the insolvency administrator, that breach consists, more specifically, in the fact that BMA AG failed to provide financial assistance to BMA NL, with the result that its bankruptcy was inevitable.
The Court considers in that judgment that the court of the seat of a company whose debts have become uncollectible because the parent company of that company has breached its duty of care towards the company’s creditors has jurisdiction to hear a class action for damages in tort, delict or quasi-delict brought by the insolvency practitioner of that company.
Article 4 of Regulation (EC) No. No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (‘Rome II’) must be interpreted as meaning that the law applicable to an obligation to pay damages under the duty of care of the ultimate holding company of an insolvent company is, in principle, the law of the country in which that company is established, in principle, that of the country in which the latter is established, even if the pre-existence of a financial assistance agreement between those two companies, which provides for a choice of forum clause, is a circumstance which may establish manifestly closer links with another country.