5 . 1 . THE GF.NERAI. D U T Y T O C O - O F ERATH

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Article 31 constitutes the Regulation's general and overarching duty of co-operation.

It imposes a mutual duty of co-operation on the liquidators of the various proceedings

that may be pending simultaneously. It maybe noted, however, that according to the

letter of Article 31 this duty only governs the liquidator in the main and the liquidators

in the secondary proceedings. The duty imposed by Article 31 appears not to cover

the situation where two or more independent territorial proceedings regarding the

same debtor are pending. It maybe asked whether it was the intention to limit the duty

of co-operation in this w a y . > l A further limit on the scope ol the duty to co-operate

exists in the fact that it is imposed only on liquidators but not on the courts themselves.

According to the first paragraph of Article 31 the liquidators shall be 'duty bound to

communicate information to each other'. Any information they receive and which may

be relevant to the other proceedings should be communicated 'immediately'. 'I he

information should in particular concern the progress made in the lodging and verifying

of claims and all measures aimed at terminating the proceedings. The Report

Virgds-Schmit adds information as to the assets, actions of avoidance and payment

against third parties and the realisation of the assets."1 . The duty mutually to share

and disclose all relevant information is subject to national rules concerning, tot instance,

the protection of personal information.

Article 3 1 ( 2 ) provides t h a t ' j s ] ubject to the rules applicable to each proceedings', the

liquidators in main and secondary proceedings'shall be duty bound to co-operate with

each other'. The preamble makes clear that what is envisaged here is close co-operation,

which is regarded as the main condition to secure the necessary level of co-ordination

( it', berends, 279. I or jurisdiction see Article 3(4!; the debtor must li.ne his or her centre o

interest in a Member State lor the Regulation to be applicable.

between the various p r o c e e d i n g s . " The duty's (potential) strength is reinforced in

the Report, although it dedicates no more than a single, short comment on it. The

liquidators are under an obligation to consult each other as to the course and coordination

ot the proceedings, and to facilitate their respective t a s k s . > n

The duty to co-operate is made specific for a particular situation in Article 3 1 ( 3 ) .

According to the third paragraph the liquidator in secondary proceedings is under

a duty to give the liquidator in the main proceedings 'an early opportunity of submitting

proposals on the liquidation or use of the assets in the secondary proceedings'.

This specific duty of co-operation reflects the Regulation's desire to accord a degree

of primacy to the main proceedings. In particular, timely notification as to the realisation

or use of assets in secondary proceedings will enable the liquidator in the main

proceedings to make an informed choice whether to request a stay of the secondary

proceedings pursuant to Article 33.

The Report Virgos-Schmit concludes that the consequences of a possible breach of

any of the obligations of Article 3 1 - for instance, liability of the liquidator - are to

be determined in accordance with the applicable national law.: s It is submitted this

comment should be read with some care. It does not in any event allow for the conclusion

that 'any sanction under national law may well prove to be a hypothetical sanction';

or, that 'implementation of Article 31 will to a large extent depend on the goodwill

of those involved'. ^ The source of these duties is Community law (the Regulation)

and not the national law of the Member States. This holds even though the duties of

communication and co-operation are subject to 'rules restricting communication of

information' and 'rules applicable to each proceedings' respectively. Member States

are therefore not entirely free in sanctioning these duties. Although the choice and

determination of t he sanctions is left to the Member States, the Regulation must not

be rendered ineffective. It is consistent case-law of the Court of Justice at least to

require the sanctions chosen by the Member States to be 'effective'.^''