We provided legal assistance to a German client in a dispute with another German company over ownership of two shares in a Latvian limited liability company, which had been illegally transferred by a dishonest person for selfish purposes to his own German company.
Essence of the dispute
Both parties involved were German-registered capital companies, so the dispute was within the jurisdiction of the German courts. However, during the dispute, it was important to seize the shares so that it would not be possible for the other party to dispose of them. Considering that the shares were located in Latvia, it was necessary to ensure the claim be brought before a German court in Latvia.
In such cases, where matters of jurisdiction among member states of the European Union are to be dealt with in a court case, the Brussels Ibis Regulation (No 1215/2012) should apply. The Regulation allows a Latvian court to secure an action to be brought before a German court, and even before an action is brought.
During the dispute, the Latvian Court of First Instance questioned the applicability of the Regulation and its compliance with the Latvian Civil Procedure Law, and therefore refused to examine the application to ensure a claim be brought before a German court. After our complaint, Riga Regional Court recognised that the decision was incorrect and therefore should be revoked. The Court rightly recognised that the Regulation takes precedence over the Civil Procedure Law and that, in accordance with the provisions of the Regulation, a Latvian court may secure an action to be brought before a German court.
There are only a few publicly available court decisions in Latvia regarding the securing of a claim to be brought in another EU member state. The incorrect decision of the Court of First Instance also demonstrates that, despite [WM4] having been in force for seven years, the Regulation is still causing uncertainty for Latvian courts in its application. Uniformity of case law in the application of the Regulation is particularly important in matters involving securing a claim, where any undue delay can cause irreparable harm to the interests of the client.
The client was advised by counsel Raivo Raudzeps.