In a recent reference for a preliminary ruling on the interpretation of the EU Insolvency Regulation, the European Court of Justice was asked to consider whether it is possible to extend insolvency proceedings opened in respect of a company established in one member state to a company whose registered office is in another member state in circumstances where the property of the two companies has been intermixed (Rastelli Davide v Jean-Charles Hidoux (Case C-191/10)).

The reference was made in the course of proceedings involving an Italian company, Rastelli Davide,   and the liquidator of a French company, Mediasucre International. The liquidator of the French company brought an application before the Marseille Commercial Court seeking to have the Italian company joined to the insolvency proceedings on the basis that the property of the two companies was intermixed. The Marseille Court refused jurisdiction on the ground that the Italian company’s registered office was in Italy and it had no establishment in France. The matter ultimately came before the French Cour de Cassation which referred two questions to the European Court for clarification.

The European Court ruled that:

• The Insolvency Regulation is to be interpreted as meaning that a court of a member state that has opened main insolvency proceedings against a company can, under a rule of its national law, join to those proceedings a second company whose registered office is in another member state only if it is established that the centre of that second company’s main interests is also situated in the first member state
• The mere finding that the property of the two companies has been intermixed is not sufficient to establish that the centre of the main interests of the second company is also situated in the first member state. In order to reverse the presumption that this centre is the place of the registered office, it is necessary that an overall assessment of all the relevant factors allows it to be established, in a manner ascertainable by third parties, that the actual centre of management and supervision of the second company is situated in the first member state

Accordingly, the Italian company could only be joined to the French insolvency proceedings if it could be shown that its centre of main interests was in France and the fact that the property of the two companies was intermixed was insufficient of itself to so establish.

Contributed by Niamh Cacciato and Michael Quinn.