The Supreme Court confirms in the recent decision No. 2538 of 9 February 2016 that the rules regarding the effects of termination of a pending leasing contract, by choice of the receiver, cannot be applied to the different case of termination for breach which has already occurred
The Supreme Court’s decision ruled on an appeal brought against an order by the Court of Lodi, issued in a proof of debt proceeding filed by a leasing company, whose claim to be admitted to bankruptcy as an unsecured creditor was rejected.
The issue is whether the effects of termination of a leasing contract before the declaration of bankruptcy of the lessee should be governed by:
- art. 72-‐quater IBL providing that the leasing company is entitled to repossess the asset and needs to sell it, being obliged than to pay to the receiver any amount recovered in excess of the leasing company’s claim, while on the other side it can be admitted as a creditor if the asset cannot be sold for the full amount of the claim; or
- general ICC rules providing, according to the consistent interpretation given by the Supreme Court, for a different regime to “financial leasing” (considered as a sort of sale with payment of the purchase price in instalments) and “operating leasing” (considered as a sort of rental): (i) for “financial leasing”, according to Art. 1526 ICC, the lessee/receiver is entitled to be repaid the whole amount of instalments paid, while the leasing company is entitled to repossess the good and to recover damages according to art. 1453 first para. ICC, the latter to be determined as the balance of the total of unpaid instalments and the market value of the asset; (ii) for “operating leasing” the lessee/receiver is not entitled to recover instalments paid, because these are treated as rental payments.
The Court decision
The Supreme Court took a different stand with respect to the interpretation of several lower Courts and confirmed its own prior decision (No. 8687/2015) ruling that the provisions set forth by Art. 72-‐quater IBL do not apply to a leasing contract which was terminated before the declaration of bankruptcy. According to the Supreme Court, a different interpretation would incorrectly overcome the difference between the termination of a contract before the declaration of bankruptcy and the special bankruptcy regime regarding a different situation, i.e. the power of the bankruptcy receiver to terminate a leasing contract which is still pending when bankruptcy is declared.
The decision is worth noting because it starts a line of precedents of the Court of Cassation on the issue, in contrast the interpretation sustained by lower Courts and by commentators. According to this latter interpretation, the special regime of the effects of the termination of a leasing contract set forth by Art. 72-‐quater IBL should instead apply also to leasing contracts terminated before the declaration of bankruptcy, disregarding the difference between “operating leasing” and “financial leasing”: such special regime, indeed, was considered to be the most reasonable solution to determine the effects of the termination of a leasing contract also in case of breach of the lessee. In particular, this interpretation was based on what was considered as the true nature of a leasing contract, i.e. a credit facility arrangement with a guarantee constituted by the property of the leased asset retained by the leasing company.
In our opinion, the foregoing interpretation should be preferred, because the different view of the Supreme Court seems to be based mainly on formal arguments. Indeed, the provisions set forth by Art. 72-‐quater IBL do not seem to be aimed at protecting an interest of the bankruptcy estate in relation to the effects of termination of a leasing contract.
Taking note of the different interpretation given by the Supreme Court, leasing companies should be aware that they need to structure their proof of debt filings to be admitted to bankruptcy, setting forth the grounds of their claim accordingly to the ICC rules based on the difference between “operating leasing” and “financial leasing”. Indeed, according to the Supreme Court decision commented here, grounds for the claim based on the provisions set forth by Art. 72-‐quater IBL and those according to the ICC rules cannot be changed during the proof of debt proceeding and may lead to the rejection of the claim.