Fahnenbrock: Bot AG opines on ‘civil and commercial’ viz bearers of Greek bonds and the collective action clause.

Update 11 June 2015 the Court itself today held differently. (Seperate post on the judgment will be up soon).

Within the context of the service of documents Regulation (1393/2007) but with no less relevance for the Jurisdiction Regulation, Bot AG opined on the qualification of an action by (German) holders of Greek bonds, against the Greek State, for the involuntary shave they took on those bonds. (A ‘collective action clause’ ( I am quoting Wiki here. And I have donated) allows a supermajority of bondholders to agree to a debt restructuring that is legally binding on all holders of the bond, including those who vote against the restructuring).

Bot AG revisits all the usual suspects in the discussion of ‘civil and commercial’ (see recently the ECJ itself in flyLAL). He suggests that in the case at issue, the Greek State, with its retroactive insertion of the collective action clause in the underlying contract, exercised acta uire imperii with direct intervention in the contract itself. Not an abstract, general regime (such as a change in overall tax) which only has an impact on said contract. Had the latter been the case, the change in say tax would of course have been acta iure imperii however that exercise of sovereign authority would have taken place at a distance from the contract and would have not impacted the ‘civil and commercial’ nature of the contractual dispute.

The Regulation therefore in the Advocate General’s view does not apply in the case at issue. All in all an interesting add-on to the ‘civil and commercial’ case-law.

Geert.