CoA Luxembourg, 26 February 2024, procedural order on application to stay, UPC_CoA_3352023

A court shall stay the proceedings if a party is declared insolvent, R.311.1. However, the Rules must be interpreted in accordance with Art. 41(3) UPCA (conducting proceedings in the most efficient and cost effective manner; fair balance between legitimate interests of all parties; required level of discretion for judges without impairing the predictability of proceedings for the parties).

It would not be compatible with the principles of procedural economy and cost efficiency if the proceedings had to be stayed even in a case in which a party was only declared insolvent after the oral hearing had concluded and the legal dispute was ready for a decision. At this stage of the proceedings, the parties have already taken all procedural steps and all costs have already been incurred by the parties. If the decision or order has an effect on the insolvency estate, it does not differ from the effect that a decision or order issued before the declaration of insolvency would have had.

Furthermore, the interest in a timely order weighs particularly heavily in proceedings aimed at provisional legal protection. Furthermore, it leads to a fair balance between the legitimate interests of the parties if events that only occurred after the conclusion of the oral hearing are also no longer to be considered in the decision-making process.

This result is in line with French, German, Italian and Dutch law.