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Frilac Bankruptcy Estate

Country/Territory
Sweden
Type of court
National - higher court
Date
May 17, 2005
Source
UNEP, InforMEA
Court name
Miljööverdomstolen
Seat of court
Stockholm
Reference number
M3079-04
Language
Swedish
Subject
Waste & hazardous substances, Legal questions
Keyword
Resource/damage valuation
Abstract

The case concerned whether a bankruptcy estate could be responsible for soil investigations after having left the property where an environmentally hazardous activity had been carried out.

After an injunction to carry out soil investigations in accordance with the Environmental Protection Act and the Environmental Code had been ordered by a local environmental council, the bankruptcy manager appealed the decision, first to the Environmental Court and later to the Environmental Court of Appeal.

The Environmental Court of Appeal began by reiterating the polluter pays principle, which is a fundamental principle in Swedish environmental law. As a rule, the operator of the environmentally hazardous activity is responsible for possible after treatment to restore a polluted area, but there are certain exceptions when for example the owner of a property is responsible. Within the insolvency law, however, the bankruptcy estate is not responsible for the debtor’s obligations.

In a number of earlier cases, bankruptcy estates have been made responsible for after treatments of different kinds. This case is however different as the debtor had ceased with their operations, terminated the rental agreement for the property and informed the regulatory authority well before the bankruptcy took place. The bankruptcy manager no longer runs the operations having caused the potential environmental damage.

As the bankruptcy estate had no operations connected to the activity or the permit for the activity, the Environmental Court of Appeal concluded that the bankruptcy estate could not be held responsible for the damage and therefore not responsible for after treatments.

Full text
M3079-04.pdf