Can directors be employees? An array of answers are possible. A director may accept to perform the duties resulting from company law and the statutes of association by entering into eg a management contract, an agency agreement, or an employment contract. The diversity of plausible answers also impacts on EU private international law, as the applicability of the protective rules on jurisdiction in matters relating to employment contracts, contained in Art 18 et seq of the Brussels I Regulation Recast, depends on whether a relationship can be characterised as a ‘matter relating to an individual contract of employment’. At stake are among other things (1) the option of the director to sue the company in the courts of the place where he is domiciled, and (2) whether the company is restricted to pursue its actions against the director in the courts of the director’s domicile.
In his Opinion in C-603/17 EU:C:2019:65 Bosworth ea v Arcadia Petroleum ea, AG Saugmandsgaard Øe clarified the position of directors of a company in respect of the rules of jurisdiction applicable to employment contracts.
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Another Attempt to Create Order out of Chaos
In its preliminary ruling of 20 December 2017, the ECJ held that Article 1(2)(b) of the Brussels I Recast Regulation (which excludes certain insolvency proceedings from its scope of application) must be interpreted as meaning that it applies to an action for liability in tort brought against the members of a committee of creditors (hereinafter referred to as “CoC”) because of their conduct in voting on a restructuring plan in insolvency proceedings. Such an action is therefore excluded from the scope ratione materiae of the Brussels I Recast, and hence falls within the scope of Article 3(1) of the (old) Insolvency Regulation. Consequently, the competent court is the one which opened the insolvency procedure.
The facts of the case can be summarized as follows. VAV invest, a company incorporated under Slovak law whose assets were the subject of restructuring proceedings in Slovakia, submitted a restructuring plan. At its meeting, the CoC rejected the plan without providing any comprehensible reasons, which led to the frustration of the restructuring proceedings and the winding-up of VAV invest. Continue reading “ECJ on Article 1(2)(b) of the Brussels I Recast Regulation: Actions for Liability in Tort in Insolvency Proceedings”