Home Knowledge High Court has Jurisdiction to Wind-Up Company Incorporated Outside the EU

High Court has Jurisdiction to Wind-Up Company Incorporated Outside the EU

September 24, 2013

In In re Harley Medical Group (Ireland) Ltd IEHC 219, the High Court held that it has jurisdiction to wind-up a company registered in the British Virgin Islands, but with its principal place of business in Ireland.

A petition to wind-up Harley Medical Group (Ireland) Ltd was presented to the High Court on 26 February 2013.  The company, which provided cosmetic surgery services exclusively in Ireland, was incorporated in and had its registered office in the British Virgin Islands.  Its principal place of business was in Dublin and it was registered with the Irish Companies Registration Office as an external company with a branch established in Ireland. 

The winding-up petition was opposed by six former patients who had claims against the company in respect of cosmetic treatment they had received.  These patients sought to have the company wound up in the United Kingdom, apparently on the basis that their rights would be better protected under English law.

Relying on the EU Insolvency Regulation (Regulation (EC) No 1346/2000), the opposing creditors submitted that the Irish High Court did not have jurisdiction to deal with the winding-up petition as the company’s centre of main interests (COMI) was not in Ireland but in the UK.  They pointed to the fact that the company was part of a larger group of companies and that a company within the group with which it was associated had been placed in administration in the UK.

The company contended that the EU Insolvency Regulation was of no application as the company was incorporated in the British Virgin Islands.  In any event, it submitted that its COMI was in Ireland on the basis that:

  • It had never traded in any jurisdiction other than Ireland
  • All surgical treatments were carried out in an Irish hospital by surgeons registered with the Irish Medical Council
  • All of its employees were located in Ireland
  • Its address for correspondence was in Ireland, and
  • It was registered with the Irish Revenue Commissioners and was not tax resident in any other jurisdiction

The Court noted that under Article 3(1) of the EU Insolvency Regulation, the courts of an EU member state have jurisdiction to open insolvency proceedings in relation to a company incorporated outside the EU where the company’s COMI is in that member state.  The test for the application of the Insolvency Regulation is whether the debtor’s COMI is in a relevant member state, and not where the debtor is incorporated.  Accordingly, the Court found that it had jurisdiction to open main insolvency proceedings in respect of the company in Ireland.

The Court further noted that there was a presumption that the company’s COMI was in the British Virgin Islands as that was the place of its registered office.  However, on the facts of the case, the Court was satisfied that the presumption had been rebutted.  All of the company’s activities had been conducted in Ireland since 1999 and the administration of its interests had been continually conducted in Ireland.  This was readily ascertainable by third parties by conducting a search in the Irish Companies Registration Office.

Contributed by: Deirdre Murphy