Centre of main interests - yet again!

Under the Recast Insolvency Regulation ((EU) 2015/848), “main” insolvency proceedings can only be opened in the Member State in which the debtor has their centre of main interests (“comicile”).

The company for which a main proceedings winding up order was sought in the instant case had moved its registered office from BVI to Malta more than three months before the presentation of the petition and so there was a rebuttable presumption that its comicile was in Malta.

The petitioner submitted that the comicile was in England. The company claimed its comicile was in Malta. It submitted that in a case where the company is small and carries on its business in the æther, the registered office presumption had to apply such that, in this case, the comicile was in Malta.

This submission was rejected by the judge who stated that, when faced with competing claims, the court must inquire into the basis on which its jurisdiction is being invoked and reach a principled decision on the evidence as opposed to using the registered office presumption as a fall back.

On the basis of the documentary material, the judge found that the company was administering its interests in both the UK and Switzerland.

The judge referred to the ECJ decision in Interedil, in particular its warning against reliance on the existence of contracts in a member state other than that in which the registered office is situated as sufficient to rebut the registered office presumption. The judge however held that in this case the court had little to go on and so the fact the company had entered into contracts governed by English law and subject to English jurisdiction was a factor weighing in favour of England as the comicile. But the judge also held that the reason for a contractual choice of law or place of jurisdiction was however irrelevant: it is the fact of the governing law and where disputes are to be resolved that is indicative of where the contractual rights and obligations were to be administered, not the motives or pressures leading to their use.

The judge concluded, by a narrow margin and with misgivings, that the greater use of English law for contracts, the greater use of London as a seat of arbitration, the actual recourse to or forced involvement in legal proceedings in England and the consequential use of English lawyers, on the balance of probabilities, there was sufficient information to justify locating the company’s comicile in England such that the registered office presumption was rebutted and a main proceedings winding up order in England could be made.

East-West Logistics LLP v Melars Group Limited

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