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Supreme Court decision on cross-border insolvencies

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Alpha Insurance's estate was represented before the Supreme Court by Henning Harborg, Bettina Thaulow Harto and Andreas Meidell of Team Thommessen. The Supreme Court's decision provides valuable guidance for future jurisdictional issues in cross-border insolvencies.

The Supreme Court's decision in the Alpha case on the insolvency exception in the Lugano Convention and other jurisdictional issues in cross-border insolvencies, was rendered today - 12 November 2020.

The claimant, a Norwegian resident, was covered by his Norwegian employer's workplace injury insurance with Alpha Insurance A/S, a Danish insurance company which was declared bankrupt in 2018. Prior to the opening of the bankruptcy proceedings, the claimant filed an insurance claim against the insurance company, but the claim was rejected by the insurance company's claims handler. The claimant challenged the rejection before Bergen tingrett, seeking a declaratory judgment recognizing his entitlement to insurance coverage.

The action was, however, lodged after the opening of the bankruptcy proceedings. The insurance company's bankruptcy estate challenged the jurisdiction of Norwegian courts, arguing that the Danish insolvency courts have exclusive jurisdiction to decide actions for the declaration of the existence of a claim in order for the claim to compete in the bankruptcy.

Upon analysis of both its own caselaw and that of the EU Court, placing significant emphasis on the Riel judgment from September 2019 (C-47/18), the Supreme Court held that the action falls within the insolvency exception in Article 1(2)(b) of the Lugano Convention, and thus is excluded from the scope of the Convention. Moreover, in accordance with its previous practice, the Supreme Court found that actions excluded from the scope of the Lugano Convention on account of the insolvency exception, will not have a sufficient link to Norway under section 4-3 of the 2005 Disputes Act, unless the insolvency proceedings are opened in Norway. To that end, the Supreme Court also referred to the choice of law provisions in the Solvency II Directive and the Nordic Bankruptcy Convention. In conclusion, the Supreme Court found the action inadmissible. The decision provides valuable guidance for future jurisdictional issues in cross-border insolvencies.

Alpha Insurance's estate was represented before the Supreme Court by Henning Harborg, Bettina Thaulow Harto and Andreas Meidell of Team Thommessen.

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