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Rafael Arenas Garca

Este trabajo ha sido publicado en S. Grundmann y otros (dirs.), Festschrift fr Klaus J. Hopt zum 70. Geburtstag am 24. August 2010. Unternehmen, Markt und Verantwortung, Berln/Nueva York, Walter de Gruyter, 2010, t. I, pp. 321-335


Rafael Arenas Garca
SUMMARY: I. Introduction. II. Types of directors liability. III. Actions of the company against the directors. 1. The role of Art. 22(2) R 44/2001. 2. Forum domicilii and forum contractus. 3. Choice of forum agreements. IV. Liability vis--vis third parties. V. Liability for company debts. VI. Directors liability and insolvency. 1. Types of directors liability. 2. The action of wrongful trade. 3. Compensation for damages. 4. Directors liability for the debts of the company. VII. Conclusion.

I. INTRODUCTION 1. Probably K.J. Hopts Ideelle und wirtschaftliche Grundlagen der Aktien-, Bank- und Brsenrechtsentwicklung im 19. Jahrhundert1 was one of the works that helped me more in understanding company law. I will always be thankful to Professor Hopt for writing that article, which was so important for me when I was trying to find the links between company law and the regulation of commercial registers in the context of international commerce law2. Therefore it is for me an honour and a pleasure to participate in this liber amicorum, and right from the beginning I had no doubt that my article for Professor Hopt should deal with company law. I have chosen to write a contribution about private international law (PIL) problems regarding the liability of directors. Corporate governance is one of the most prominent issues in company law since the end of the XXth century, 3 and directors liability is a key element in the configuration of corporate governance. 4 Professor Hopt has also worked on these issues, 5 and he is an expert on the changes experienced by corporate governance and directors liability in the last decade. These changes have been broadly analysed in company law by scholars from both sides of the Atlantic, and the study of this type of liability has become a significant field of commercial law in many European countries and in the United States. In PIL, however, the interest for this subject has not been so intense. There are not many articles devoted to liability of directors from a PIL perspective, and some fundamental problems of this area have not yet been studied in depth. This article deals with some of these problems, and more precisely, with jurisdictional problems regarding the liability of directors; i.e., determining where a director may be sued in order to establish his/her personal liability linked with his/her role as director of a company. The analysis will be made from a European perspective, which means that we will focus the study of the application of EC Regulations 44/2001 and 1346/2000, paying less attention to domestic law. A key element in this study is the distinction between the different types of directors liability. We will deal with this distinction in the next epigraph and afterwards we will discuss the grounds of jurisdiction that can be used to sue directors, taking into account the categories established in epigraph II. The particularities of directors liability in insolvency cases deserve special attention; we will therefore devote the penultimate part of the article to this problem. II. TYPES OF DIRECTORS LIABILITY

Company law imposes certain duties on directors of companies. These are basically fiduciary duties whose goal is to ensure that the companies interests are protected. The way of achieving this goal depends mainly on the company model. If we consider the source of the directors duties and liabilities, the existing company models can be classified in two main groups. Some systems of corporate law allow the statutes to freely govern this issue, considering that the market will reward the best approaches; 6 but it is also possible to set the directors duties and liabilities in mandatory rules7. If we consider the content of the regulation, there are also different possibilities. In some cases the law only establishes general duties, 8 whereas in other cases the duties are more specific9. Another issue that must be considered is the level of diligence that can be demanded to the directors. The determination of such level has a great influence not only in company law, but also in the economic activity. 10 The breach of the fiduciary duties imposed on directors can cause damages to the company, to the shareholders and/or to the creditors of the company. If that is the case, the company itself can sue the liable directors. This kind of action against directors is well known and its purpose is to recover the assets of the company lost as a consequence of the directors wrongful actions. 11 In some countries, when the company does not act against its directors, the shareholders and the creditors of the company are allowed to sue the directors in behalf and in the interest of the company. 12 The purpose of the action against directors for breach of their fiduciary duties is to recover the assets lost by the company; but this obligation of compensation is not the sole consequence of the directors wrongful behaviour. It is also possible to impose on them an obligation to assume the company debts. In these cases, the creditors of the company can sue not only the company, but also its directors. This liability of directors for the company debts is established both by company law13 and by insolvency law14. The particularities of insolvency law deserve a specific treatment of this type of liability; consequently, in this article we will deal with these problems in epigraph VI. The behaviour of the directors can cause damages not only to the company, but also to third parties. Such parties can suffer an indirect damage as a consequence of a direct damage to the company assets, but it is usually not possible to sue the directors to obtain a compensation for this indirect damage; 15 when the damage to the third party is purely indirect, the only way to get compensation is through the actions that are aimed to recover the assets of the company, 16 which can also be used by the creditors of the company, as we have just pointed out. In some cases, directors directly cause damages to third parties. It is then necessary to draw a distinction between, on the one hand, the cases in which the director acts as a company director, and on the other hand, the cases in which the behaviour of the director is not linked to his/her condition of director. In the latter case, company law does not affect the action against the director. The fact that the person who causes the damage is the director of a company is irrelevant; we are therefore not going to consider these cases here. In the former case, i.e. when the damage is caused by a person acting as a company director, it must be pointed out that the company takes on the responsibility for the behaviour of the director; thus, in principle the person who suffers the damage must sue the company rather than the director. In some cases, however, it is also possible to sue the director. The applicable law will determine whether (i) the directors liability is subsidiary with regard to the companys liability, (ii) both the company and the director are jointly liable, or (iii) the companys liability is subsidiary with regard to the directors liability. In any of these cases the person suffering the damage is allowed to 3

sue the director, and it must therefore be established which courts have jurisdiction to decide on the matter. III. ACTIONS OF THE COMPANY AGAINST THE DIRECTORS 1. The role of Art. 22(2) Regulation 44/2001 Actions of the company against the directors are not included in Art. 22(2) Regulation 44/2001. The courts of the country where the company has its domicile assume exclusive jurisdiction only as regards the questions of the validity or dissolution of the company and the validity of the decisions of its organs. These actions do not fall into these categories so the exclusive ground of jurisdiction does not apply. However, this does not mean that Art. 22(2) Regulation 44/2001 is totally irrelevant in such cases. In order to file an action against one of its directors, the company must usually previously adopt a formal decision. The validity of this decision can only be ascertained before the courts designated by Art. 22(2) Regulation 44/2001. A problem can arise when the validity of the decision is contested by the director as a preliminary issue in the proceeding. As we will see immediately, the court competent to establish the liability of directors for the breach of their fiduciary duties is not necessarily the court of the companys domicile. When the action is brought in a State other than the one where the company has its domicile, the court will have no competence to examine the validity of the decisions adopted by the organs of the company. Traditionally, it was assumed that Art. 22 did not apply to ancillary matters17; hence, if the claim is not principally concerned with the validity of the company decision, deciding about this validity should not have posed a problem. However, this traditional interpretation of the Regulation must be re-examined in the light of the Luxembourg Courts case law on industrial property. The ECJ has established that the rules of Art. 22 of the Regulation (Art. 16 of the 1968 Brussels Convention) apply even when the validity of a patent is questioned as an exception before a court which is seized of a claim principally concerned with a patent infringement. It seems reasonable to adopt the same approach in company cases, which means that when the director, acting as a defendant in an action of company liability, contests the validity of the company decision to bring the action, the proceeding cannot go on unless the company has its seat in the forum State or in a third State. 2. Forum domicilii and forum contractus When the validity of the company decision is not questioned, the claim can be brought before the courts of the State of the directors domicile. It is also possible to bring the action in the courts competent under Art. 5. The relevant rule in Art. 5 is the contractual forum. The action of company liability must be characterised as contractual, since there is a free assumption of duties by the company towards the director and by the director towards the company18. The autonomous interpretation of matters relating to a contract includes the relationship between companies and their directors, even if some national orders consider that this kind of relationship cannot be defined as contractual19. As a consequence of the contractual characterization of the relationship between the company and the director, the action against the director can be brought in the courts of the Member State where the director is domiciled (Art. 2 of Regulation 44/2001) and also in the court of the place of performance of the obligation in question [Art. 5(1)], 4

i.e., the place where the director carries out his/her professional duties. The action is based in the lack of performance or the defective performance of the directors duties, and the place where the defendant acts as a director is the place where he/she can be sued under Art. 5(1). The solution is the same if instead of the general rule of Art. 5(1), we consider the specific rule for the provision of services. The contract between the company and the director should be characterised as a provision of services, since the director carries out an activity in return for remuneration20. This implies that, unless otherwise agreed, the place of performance of any obligation arising from the contract is the place where the services should be provided according to the contract. In most of cases, Art. 5(1) of the Regulation will allow suing the director in the courts of the place where the company has its central administration. 3. Choice of forum agreements Art. 23 of the Regulation also applies in these cases. As we have just seen, the action of company liability does not fall into the exclusive competences of Art. 22. Arts. 18-21 (individual contracts of employment) do not apply, since the special nature of the relationship between the company and the directors cannot be considered as an employment contract21. Therefore, it is possible to conclude an agreement on the competent courts to settle any dispute arising from the relationship between the company and the director. If this agreement exists the chosen courts are exclusively (unless otherwise established by the parties) competent to entertain the action of company liability. When the agreement is in writing, in a document signed by the director and a representative of the company, there should be no problem about its effectiveness; but it is also necessary to consider the cases in which the designation of the court has been made in the statutes of the company. It is doubtful that the assumption of the position of director can be interpreted as an agreement on the court choice made in the statutes. However, since the ECJ has established that clauses conferring jurisdiction in the statutes of a company limited by shares can be a valid agreement within the meaning of Art. 17 of the Brussels Convention (Art. 23 of Regulation 44/2001), 22 it is possible to argue that this kind of clauses can also be alleged by and against the companys directors. It is true that the relationship between the directors and the company is different than the relationship between the shareholders and the company; but that should not affect the binding character of the statutes for the directors. When they assume their function they agree, explicitly or implicitly, in the observance of the statutes, 23 so they cannot argue that the choice of jurisdiction agreements contained therein is not binding for them. We must also consider the case in which it is a third party (the company creditor) who acts against the director in behalf and in the interest of the company. The plaintiff has not concluded the choice of court clause; but such clause is binding for this plaintiff. The ECJ has established that the choice of forum agreement applies to third parties who, by virtue of the relevant national law, succeeded to the rights and obligations of one of the original parties to the agreement. 24 This is the case when a third party sues the director in behalf of the company. Of course, if the law governing the action does not prescribe that the creditor succeeds to the companys rights, the choice of law agreement should not be applicable to the action brought by the creditors of the company against its directors. 25 IV. LIABILITY VIS-A-VIS THIRD PARTIES 5

As it has been pointed out in epigraph I, the actions of directors can cause damages to third parties, or even to the shareholders. According to the nemo non-laedere rule, the third party may sue the director when the damage is not completely assumed by the company. The shareholders may use the same legal ground when the damage suffered is not indirectly derived from the damage caused to the company by the director. 26 In these cases, the action can be brought before the courts of the defendants domicile (Art. 2 of the Regulation 44/2001) and also before the courts of the place where the harmful event occurred [Art. 5(3) of the Regulation]. This forum must be interpreted in the sense that the defendant may be sued, at the option of the claimant, where the event which gives rise to liability in tort, delict or quasi-delict occurs or in the place where that event results in damage. 27 Therefore, directors may be sued where the act giving rise to the damage is carried out, but also where the damage occurs; however, that place, the place where the damage occurs, must be closely connected to the place where the event that causes the damage occurred; as has been stated by the ECJ case-law28 and it implies that it is not possible to sue the director in the claimants domicile or residence on the basis that this is the place where the claimant has suffered financial damage29. Choice of court (Art. 23 of the Regulation 44/2001) and jurisdiction based on the voluntary appearance of the defendant (Art. 24) shall also apply in this matter. It must be pointed out, however, that when the damage is linked with a relationship affected by a choice of court agreement concluded between the victim and the company, this agreement will not be relevant to the action brought against the director, even in the case that the agreement has been signed by the director acting in behalf of the company. Since the agreement binds the person who has suffered the damage with the company and not with the director, for the latter the choice of agreement is res inter alios acta and may not be alleged by or against him/her. V. LIABILITY FOR COMPANY DEBTS In epigraph II it was pointed out that in some cases directors are considered liable for the debts of a company. This happens when the registration has not been completed; 30 when the proceeding of dissolution of the company has not been initiated by the director, if the director was required to begin that proceeding31; and finally, in some cases linked to insolvency proceedings. Since the liability of directors in insolvency proceedings deserves a special treatment, in this epigraph we are not going to deal with those cases, and we will pay attention only to the first two possibilities. The cases in which directors are liable for company debts are probably the most complex of all situations involving the liability of directors, at least from a PIL perspective. The main problem is to determine whether the action brought against the director must be examined in the framework of company law or if, on the contrary, the directors liability must be judged as a guarantee linked to the relationship between the company and the creditor. The solution to this characterization problem is important not only for the determination of the applicable law, but also in relation with jurisdictional problems. We will here consider only the latter. Spanish courts have already dealt with these problems. The judgment of the Audiencia Provincial de Len (Seccin 3) of 7 May 200832 ruled on an action directed against a 6

Portuguese company and its directors based on arts 104 and 105 of the Spanish Law on Limited Liability Companies33. The Spanish court established that, according to Regulation 44/2001, the directors might only be sued before the courts of the Member State of their domicile (Art. 2 of the Regulation). The solution adopted by the Spanish courts does not take into account that the liability of directors in this case is an extension of the liability of the company. When the creditor brings a contractual action against the company, the action against the director has the same contractual nature as the action against the company. The only role of company law is to determine when the liability of a company can be extended to its directors, but the action that the creditor of the company brings against the director shares the nature of the action exercised against the company. Considering what we have just said, it should be possible to consider that the courts where the company may be sued on the basis of art 5(1) of Regulation 44/2001 are also competent for the action against the directors of the company. However, the ECJ case law does not support this interpretation, since the principle of relativity of contracts has been interpreted very narrowly. It would be difficult to admit, according to the case law of the Luxembourg Court, that the contractual forum can be used against a defendant, the director, who has not freely assumed obligations towards the plaintiff. 34 Similarly, Art. 5(3) could not be used to sue the director when the liability of the company must be characterized as non-contractual (tort, delict or quasi-delict). 35 It is possible, however, to sue the director, domiciled in one Member State, in the Member State of the domicile of the company (or to sue the company in the courts of the directors domicile) on the basis of art 6(1) of the Regulation. Under Art. 6(1) it is possible to sue a plurality of defendants in the courts of the place where any one of them is domiciled. This possibility requires that the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. This is the case when the company and its director or directors are sued on the basis of the same cause of action. VI. DIRECTORS LIABILITY AND INSOLVENCY 1. Types of directors liability The cases in which the action against the director is related with insolvency proceedings deserve special attention. It is common for directors to assume certain obligations in case that the company becomes insolvent. In British Law, Art. 214 Insolvency Act 1986 establishes that directors can be required by the court to contribute to the assets of the company as compensation to the creditors of the company. The obligation of compensation arises from wrongful trading. Directors are not allowed to continue trading after the moment they knew or ought to have known that the company was insolvent. The regulation is different in Spain, though its goal is also to force the beginning of the insolvency proceeding when the financial situation of the company requires it. The Spanish Ley Concursal36 (Insolvency Law) establishes (Art. 172.337) that directors can be forced to pay to the creditors of a company when the court considers that the directors are responsible of the insolvency. Art. 165 of the Spanish Insolvency Law establishes that if directors have not requested the opening of the insolvency proceeding when they should have, there is a presumption that they are responsible of the insolvency38. German Law deals with the same problem in a different way. Paragraph 42(2) BGB establishes that directors who have not opened the 7

insolvency proceeding when it was required will be held liable for the damages suffered by the creditors of the company39. British, German and Spanish law deal with the directors liability and all of them link this liability with the failure in the duty to apply for the beginning of the insolvency proceeding when the situation of the company demands this measure, but the consequences of this liability are different in the United Kingdom, in Germany and in Spain. In accordance with the British Insolvency Act, directors must contribute to the company assets, whereas Spanish law establishes that directors are responsible of the companys debts; and German law provides that directors can be sued on the basis of non contractual liability. The practical result of these different approaches could be the same, but the legal nature of the consequences for directors are different. In one case, directors are required to contribute to the assets of the company (UK); in the other one, they are responsible for the damage to the creditors (Germany) and, finally, in Spain, directors become debtors in the obligations of the company. The different nature of each case prevents a global consideration of all these cases. We will therefore deal with them separately. 2. The action of wrongful trade The easier case is the first one, the provision of Art. 214 Insolvency Act 1986. The action of wrongful trade and its equivalent in other countries are excluded from Regulation 44/2001 ex art 1.2.b), 40 an exclusion which has been confirmed by the ECJ41. Additionally, other circumstances contribute to consider that these type of proceedings are excluded from the material scope of the Regulation: the close relationship between the directors liability and the insolvency proceeding; the fact that the purpose of the directors contribution is to increase the assets of the company in order to satisfy the creditors in the insolvency proceeding; or, finally, the fact that the contribution of the director can only be requested by the court competent for the insolvency proceeding or -in other cases- by the syndic. 42 This exclusion implies the parallel inclusion in the scope of Regulation 1346/2000. It is true that this complementary character of both instruments (Regulation 44/2001 and Regulation 1346/2000) has not been established expresis verbis either in Regulation 44/2001 or in Regulation 1346/2000, and there are some doubts about this complementariness43; but the ECJ nevertheless assumed it in its judgment of 12 February 200944. In consequence, the court seised of the insolvency proceeding is also competent for the request addressed to the directors of completing the companys assets. 3. Compensation for damages We must now consider the cases in which the directors have not opened the insolvency proceeding in time and that delay has caused damage. The person who suffered that damage may sue the directors in order to obtain compensation45. The main problem is to determine which of the Regulations applies. In this case, the possibility of applying the Insolvency Regulation is not so clear. From a substantial point of view, the claim must be characterized as non-contractual46 and it is not necessary to sue the director in the insolvency proceeding. Moreover, the basis of the claim is not insolvency law, which implies that the Insolvency Regulation does not apply, at least when the claim is not raised in the insolvency proceeding47. Consequently, Regulation 44/2001 applies. Therefore, when the director is sued in the insolvency proceeding in order to obtain a compensation for damages, the court seised of the insolvency proceeding is also 8

competent for the claim for damages; on the other hand, when the director is sued in an independent proceeding, the competence will be determined by Regulation 44/2001, which means that the claim may be brought before the courts of the State where the defendant has its domicile and also in the courts designated by Arts. 5 and 6; Arts. 23 and 24 will also apply. 4. Directors liability for the debts of the company Finally, we must consider the cases in which the director is liable for the debts of the company along with the company itself. These cases must be decided taking into account the relationship between the claim and insolvency law. In case of a close relationship, the application of Regulation 1346/2000 would seem more justified. Nevertheless, even in a case of a close relationship between the claim and insolvency it would be inappropriate to automatically exclude the application of Regulation 44/2001. For example, Spanish Insolvency Law establishes, as we have already seen48, that the court which is seised of the insolvency proceeding may order the directors to pay the debts of the company in full or only partially. The link between the action against the directors and the insolvency proceeding is very close: the creditors can only sue the directors once the court has established that the latter are responsible for the debts. However, it would not be coherent to exclude the application of Regulation 44/2001 to the claims brought against the directors. The action exercised by the creditor against the director is the same action that the creditor has exercised against the company. And since Regulation 44/2001 applies (or could apply) to determine the court where the action against the company can be brought, it would not be reasonable to exclude the application of this Regulation when it comes to determining where the director may be sued. VII. CONCLUSION Directors incur in different types of civil liability. The nature of each case requires a specific consideration also from a PIL point of view. The goal of this contribution is to point out that the determination of the competent court in actions against directors must take into consideration this different nature of directors liability. In cases in which the action aims at recovering the assets of the company and there is no relevant link with insolvency proceedings, Regulation 44/2001 applies. The plaintiff may sue the director in the courts of the State where the defendant is domiciled and also in the courts of the place where the director carries out his/her professional duties. Choice-of-court agreements are also possible. When the director is sued on the basis of the nemo non laedere principle, Regulation 44/2001 usually applies without any particular difference from any other claim based on non contractual liability. There are cases in which directors are responsible for the debts of the company. Although it would be reasonable for the creditor to sue the director in the court competent for the claim against the company, this solution is currently forbidden by the ECJ case law when Regulation 44/2001 applies. The claim may be brought only in the courts of the State of the directors domicile or in the competent courts under Art. 6 of the Regulation. Choice-of-forum agreements are possible, but in all likelihood they are not going to be common.

When directors liability is linked with insolvency proceedings, it is necessary to examine the delimitation between Regulation 44/2001 and Regulation 1346/2000. Regulation 1346/2000 will apply when the claim against the director has to be brought in the framework of the insolvency proceeding, as well as in all cases where the assets paid by the director are added to the funds to which the general body of creditors is entitled. When the claim benefits only certain creditors, either on the basis of the non contractual liability of the director or due to the extension towards the director of the companys debts, Regulation 44/2001 will apply.

This contribution has been elaborated in the framework of the Research Project Adecuacin de los tipos y de las estructuras de las sociedades y dems personas jurdicas a las exigencias derivadas de la integracin econmica mundial. This project has been financed by the Direccin General de Investigacin del Ministerio de Educacin y Ciencia. Reference: SEJ2005-06811/JURI. Head researcher: Dr. Rafael Arenas Garca. 1 In H. COING and W. WILHELM (ed.), Wissenschaft und Kodifikation des Privatrechts im 19. Jahrhundert, Frankfurt am Main, Vittorio Klostermann, t-V, 1980, pp. 128-168. 2 Vid. R. ARENAS GARCA, Registro Mercantil y Derecho del comercio internacional, Madrid, Centro de Estudios Registrales, 2000. In this book there are 13 references to works of Professor Hopt, six of which are from Ideelle und wirtschaftliche 3 Cf. P.L. DAVIES, Gower and Davies Principles of Modern Company Law, London, Thomson/Sweet & Maxwell, 7 ed. 2003, p. 291. 4 Ibidem, pp. 425-426. 5 K.J. Hopt was member of the High Level Group of Company Law Experts. The Report produced by this Group on A modern regulatory framework for company law in Europe deals with corporate governance, and it can be considered a milestone in European company law and, also in corporate governance;. However, previously professor Hopt had already published leading works on corporate governance. See, for example, K.J. HOPT/G. TEUBNER (eds.), Corporate Governance and Directors Liabilities Legal, Economic and Sociological Analyses on Corporate Social Responsibility, Berlin/New York, de Gruyter, 1985; T. BAUMS/R.M. BUXBAUM/K.J. HOPT (eds.), Institutional Investors and Corporate Governance, Berlin/New York, de Gruyter, 1994; K.J. HOPT/E. WYMEERSCH (eds.), Comparative Corporate Governance Essays and Materials, Berlin/New York, de Gruyter, 1997; K.J. HOPT/H. KANDA/M.J. ROE/E. WYMEERSCH/S. PRIGGE (eds.), Comparative Corporate Governance The State of the Art and Emerging Research, Oxford, Clarendon, 1998; K.J. HOPT, Kommentierun von 93 AktG Sorgfaltspflicht und Verantworlichkeit der Vorstansmitglieder, in K.J. HOPT/H. WIEDEMANN (eds.), Aktiengesetz, Grokommentar, 4 ed., vol. 11, Berlin/New York, de Gruyter, 1999; K.J. HOPT, Die Haftung von Vorstand und Aufsichtsrat Zugleich ein Beitrag zur corporate governance-Debatte, in Festschrift fr Mestmcker, Baden-Baden, Nomos, 1996, pp. 909-931; K.J. HOPT, Shareholder rights and remedies: A view from Germany and the Continent, Company Financial and Insolvency Law Review, 1997, pp. 261-283; K.J. HOPT, Gemeinsame Grundstze der Corporate Governance in Europe? berlegungen zum Einflu der Wertpapiermrkte auf Unternehmen und ihre Regulierung und zum Zusammenwachsen von common law und civil law im Gesellschafts-und Kapitalmarktrecht, ZGR, 2000, pp. 779-818. 6 See J.N. GORDON, The mandatory structure of corporate law, Columbia Law Review, 1989, vol. 89, pp. 1549-1598, p. 1553. Nevertheless, even the more flexible corporate laws included some mandatory rules (ibidem, footnote 16). Nowadays, the soft regulation through codes made by the market participants is increasingly relevant, see the Report on a modern regulatory framework for company law in Europe made by the High Level Group of Company Law Experts (see supra footnote 5) (, p. 72. 7 Statutory rules or case law, depending on the system. If the duties and liabilities of directors are not codified, it could be difficult for the directors to find out the specific obligations linked to the position. Therefore, a certain level of restatement of case law or common law principles would be advisable, see P.L. DAVIES, op. cit., p. 371. 8 See, for example, F. VINCKE, The Corporate Governance Debate in Belgium, in K.J. HOPT/E.WYMEERSCH, op. cit., pp. 119-149, p. 129; H.H. DE SAVORNIN LOHMAN, Duties and Liability of Directors and Shareholders under Netherlands Law. Piercing the Corporate Veil, London/The Hague/Boston, Kluwer, 1996, pp. 37-38; J.J. DU PLESSIS/I. SAENGER, The General Meeting and the Management Board as Company Organs, in J.J. DU PLESSIS/B. GROFELD/C. LUTTERMAN/I. SAENGER/O. SANDROCK, German Corporate Governance in International and European Context, Berlin/Heidelberg/New York, Springer, 2007, pp. 376-64, pp. 58-59.


See, for example, Arts. 127 to 127quarter of the Spanish LSA (Ley de Sociedades Annimas) See C. PAZ-ARES, Responsabilidad de los administradores y gobierno corporativo, Madrid, Colegio de Registradores de la Propiedad y Mercantiles de Espaa, 2007, passim. 11 See in Spain art. 133 LSA. 12 See art. 133 LSA (Spain). In other countries it is more difficult for individual and minority shareholders to bring an action on behalf of the company against the directors, see P.L. DAVIES, op. cit., p. 447. 13 See Art. 262.5 LSA (Spain). 14 See infra epigraph VI. 15 See, in Spanish Law, art. 134 LSA. Vid. F. SNCHEZ CALERO, Los administradores de las sociedades de capital, Cizur Menor (Navarra), Thomson/Civitas, 2 ed. 2007, pp. 409-410; J. ALFARO GUILA-REAL, La llamada accin individual de responsabilidad contra los administradores sociales, Revista de Derecho de Sociedades, 2002-1, n 18, pp. 45-76, pp. 47-48; J.L. DAZ ECHEGARAY, Deberes y responsabilidad de los administradores de sociedades de capital, Cizur Menor (Navarra), Thomson/Aranzadi, 2006, p. 319. 16 In Spain this action is called accin de responsabilidad social. In Italy it is also called Azione sociale di responsabilit, (art. 2393 Codice Civile, see A. ROSSI in A.M. ALBERTI, Il nuovo Diritto delle socit, Padua, CEDAM, 2005, vol. I, pp. 809-817). In France see D. VIDAL, Droit des socits, Paris, L.G.D.J., 5 ed. 2006, p. 218. In Germany see 93(2) AktG. 17 The Regulation only determines the jurisdiction for the principal issue of the claim, while the competence to decide over ancillary matters is ruled by the lex fori. See P. KAYE, Civil Jurisdiction and enforcement of foreign judgments, Abingdon, Professional Books, 1987, pp. 151 and 874; P. GOTHOT/D. HOLLEAUX, La Convencin de Bruselas de 27 septiembre 1968 (trad. de I. PAN MONTOJO de La Convention de Bruxelles du 27 Septembre 1968, Pars, 1985), Madrid, La Ley, 1986, pp. 16 and 91; R. ARENAS GARCA, El control de oficio de la competencia judicial internacional, Madrid, Eurolex, 1996, pp. 113-115. 18 See the Judgment of the European Court of Justice of 17 June 1992, C-26/91, Jakob Handte & Co. GmbH v. Traitements Mcano-chimiques des Surfaces Sa. n 15. The key element in the interpretation of matters relating to a contract 19 See J.L. DAZ ECHEGARAY, op. cit., pp. 63-73. 20 See n 29 of the ECJ Judgment of 23 April 2009, C-533/07, Falco Privatstiftung Thomas Rabitsch v. Gisela Weller-Lindhorst. 21 However, there is an increasing extension of the application of Labour Law to directors, at least to the managing directors. See M.A. LIMN LUQUE, Administradores y Directivos de las Sociedades Mercantiles Capitalistas. Su configuracin como Relacin Laboral y su Encuadramiento en la Seguridad Social, Cizur Menor (Navarra), Thomson/Aranzadi, 2004, pp. 43-52. 22 See ECJ Judgment of 10 March 1992, C-214/89, Powell Duffryn plc v. Wolfgang Petereit, n 17, 21 and 29 of the Decision. 23 Directors are company organs [F. SNCHEZ CALERO, Los administradores en las sociedades de capital, Cruz Menor (Navarra), Thomson/Civitas, 2 ed. 2007, pp. 100-103]. 24 See Jugdment of the ECJ of 19 June 1984, C-71/83, Partenreederei ms. Tilly Russ and Ernest Russ v. NV Haven-& Vervoerbedrijf Nova and NV Goeminne Hout. 25 In this contribution we are not going to deal with the problems related with the applicable law in actions against directors, see D. COHEN, La responsabilit civile des dirigeants sociaux en droit international priv, Rev. crit. dr. int. pr., 2003, vol. 92, n 4, pp. 585-624, pp. 590-608; R. ARENAS GARCA, La responsabilidad de los administradores sociales desde la perspectiva del Derecho internacional privado, en R. ARENAS GARCA/C. GRRIZ LPEZ/J. MIQUEL RODRGUEZ (ed.), La internacionalizacin del Derecho de sociedades, Atelier, 2010 (in press). 26 In these cases the shareholder can obtain a reparation through the action of company responsibility, see supra epigraph II. 27 See Judgment of the ECJ (First Chamber) of 16 July 2009, C-189/08, Zuid-Chemie BV v. Philippos Mineralenfabriek NV/SA, n 23 of the Judgment and the references that can be found there. 28 See n 28 of Judgment of the ECJ of 16 July 2009 (supra footnote n 28). See also the Judments of the ECJ of 18 May 2006 (C-343/04, CEZ), 10 June 2004 (C-168/02, Kronhofer) and 19 September 1995, C365/92, Marinari). 29 See Judgment of the ECJ of 19 September 1995, Marinari (supra footnote n 29), n 15 and 20. 30 See Art. 120 of the Spanish Commercial Code (Cdigo de Comercio). 31 See Art. 262.5 of the Spanish Law for Anonimous Companies [Ley de Sociedades Annimas (LSA)].


Aranzadi Westlaw, JUR 2008\303535; AEDIPr, 2008, vol. VIII, pp. 896-897; Comment of R. CARO GNDARA, ibid., pp. 897-901; REDI, 2008, vol. LX, n 2, pp. 581-582; Comment of R. ARENAS GARCA, ibid., pp. 582-584. 33 Ley de Sociedades de Responsabilidad Limitada (LSRL). These articles 104 and 105 are equivalent to art 262.5 LSA. See supra footnote n 32. 34 See Judgment of the ECJ of 17 June 1992, C-26/91, Jakob Handte & Co. GmbH v. Traitaments Mcano-chimiqes des Surfaces SA, n 15. See also R. CARO GNDARA, loc. cit., p. 898, commenting the judgment of the Audiencia Provincial de Len of 7 May 2008. 35 Ibidem, pp. 898-899. 36 Law 22/2003 of 9 July, BOE, 10 July 2003. 37 Si la seccin de calificacin hubiera sido formada o reabierta como consecuencia de la apertura de la fase de liquidacin, la sentencia podr, adems, condenar a los administradores o liquidadores, de derecho o de hecho, de la persona jurdica cuyo concurso se califique como culpable, y a quienes hubieren tenido esta condicin dentro de los dos aos anteriores a la fecha de la declaracin de concurso, a pagar a los acreedores concursales, total o parcialmente, el importe que de sus crditos no perciban en la liquidacin de la masa activa. 38 Se presume la existencia de dolo o culpa grave, salvo prueba en contrario, cuando el deudor o, en su caso, sus representantes legales, administradores o liquidadores: 1 Hubieran incumplido el deber de solicitar la declaracin del concurso 39 Der Vorstand hat im falle der Zahlungunfhigkeit oder der berschuldung die Erffnung des Insolvenzverfahren zu beantragen. Wird dis Stellung des Antrags verzgert, so sind die Vorstandsmitglieder, denen ein Verschulden zur Last fllt, den Glaubigern fr den daraus entstehenden Schaden verantwortlich,; sie haften als Gesamtchuldner. 40 The Regulation shall not apply to: b) bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings. 41 See the Judgment of the ECJ of 22 Februay 1979, C-133/78, Henri Gourdain v. Franz Nadler. 42 See M. VIRGS SORIANO/F.J. GARCIMARTN ALFREZ, Comentario al Reglamento Europeo de Insolvencia, Madrid, Thomson/Civitas, 2003, p. 67. 43 See J. ISRAL, European Cross-Border Insolvency Regulation, Amberes/Oxford, Intersentia, 2005, pp. 269-270. 44 C-339/07, Christopher Seagon v. Deko Marty Belgium NV, n 19. The Conclusions of the General Advocate, Dmaso Ruz-Jarabo Colomer were even more explicit about this complementariness (numbers 51-58 of the Conclusions). See also M. VIRGS SORIANO/F.J. GARCIMARTN ALFREZ, op. cit., pp. 61-62. 45 See 42.2 BGB, supra footnote n 39. 46 See on 42.2 BGB, K. SCHMIDT, Gesellschaftsrecht, Kln/Berlin/Bonn/Mnchen, Carl Heymanns, 4 ed. 2002, p. 427. 47 When the director is sued in the insolvency proceeding the Regulation 1346/2000 applies, cf. P. ROGERSON, Article 1, in U. MAGNUS/P. MANKOWSKI (ed.), Brussels I Regulation, Sellier, 2007, pp. 4567, p. 62. When the director is sued in an independent (from the insolvency proceeding) proceeding the Regulation 4/2001 shall apply, especially when the compensation must be paid to the creditor, not to the syndic or administrator to increase companys assets. Ibidem, pp. 61-62. J. KROPHOLLER (Europisches Zivilprozerecht. Kommenta zu EuGVO und Lugano bereinkommen, Heidelberg, Recht und Wirtschaft, 7 ed. 2002, p. 96 maintain that proceedings that have not a close connection with insolvency will fall in the scope of Regulation 44/2001. 48 Supra, epigraph 1.