Establishing an Establishment – An Olympian hurdle?

Contributed by Paul Bromfield, Sally Willcock and Andrew Fox
Many of the early cases concerning the EC Insolvency Regulation have looked at aspects of COMI (centre of main interests).  The location of COMI dictates the single jurisdiction in which main proceedings can be opened.  COMI issues are now broadly settled, and recently the English courts and the Court of Justice of the European Union (‘CJEU’) have been asked to rule on a number of issues relating to secondary proceedings and where those proceedings can be opened. Essentially this involves an analysis of what constitutes an establishment for the purposes of the Regulation.
In the first of those cases, Office Metro v Trillium [2012 EWHC] 1191 Ch, Weil acted for the liquidator of Luxembourg main proceedings who successfully argued that a run-off of activities in England did not satisfy the definition of establishment.  This meant that the English court did not have jurisdiction to open secondary insolvency proceedings.  In Trustees of the Olympic Airlines SA Pension & Life Assurance Scheme v Olympic Airlines SA [2013] EWCA 643 the English Court of Appeal last week has for the first time ruled on the meaning of the establishment.  Building on arguments deployed by Weil in Office Metro, the Greek main proceedings liquidator in Olympic Airlines argued that there had to be an on-going business operation at the time that secondary proceedings were initiated and that the mere process of winding up a company was not enough.  The Court of Appeal agreed.
View our latest posting on Establishing an Establishment – An Olympic hurdle? on Weil’s European Restructuring Watch.