El-Ajou v Dollar Land (Manhattan) Ltd

Under Article 3(1) of the Council Regulation 1346/2000/EC, the registered office of a company is presumed to be the centre of its main interests (COMI). The presumption is rebuttable, but displacement requires sufficient evidence that the company’s COMI is elsewhere. The relevant inquiry focuses on where the debtor regularly administers its interests and whether that location is reasonably ascertainable by third parties. Matters that are private, difficult for third parties to verify, or of limited practical significance may carry little weight. The evidence must be assessed as a whole. A foreign registered office, foreign directors, foreign banking arrangements, the language of board meetings and the currency of accounts did not, on the evidence, rebut the statutory presumption.

Dollar Land (Manhattan) Ltd. applied to restrain Abdul Ghani El-Ajou from advertising or taking further steps on a winding-up petition. The petition followed Dollar Land’s failure to pay substantial interest required by an earlier judgment.

As a preliminary issue, Dollar Land argued that the English court lacked jurisdiction under Article 3 of Council Regulation 1346/2000/EC because its centre of main interests was outside the United Kingdom. The company had previously moved its registered office to Brussels, but later returned it to England and Wales. The issue was whether the evidence rebutted the presumption arising from its registered office.

1. Jurisdiction under Article 3(1). Article 3(1) confers jurisdiction on the courts of the Member State where the debtor’s COMI is situated. For a company, its registered office is presumed to be its COMI unless proof to the contrary is established.
2. Meaning of COMI. The preamble to Council Regulation 1346/2000/EC indicates that COMI corresponds to the place where the debtor regularly conducts the administration of its interests and where that administration is ascertainable by third parties. The ascertainability requirement is important because third parties must be able to identify, without undue difficulty, where insolvency relief may properly be sought.
3. Assessment of the evidence. The evidence relied on by Dollar Land included foreign directors, board meetings in Brussels, French-language meetings, euro-denominated accounts, a Belgian bank account, business said to be conducted in Belgium, and the absence of United Kingdom employees or assets. Those matters did not carry sufficient weight. A board’s meeting location and language, banking arrangements and account currency were not readily ascertainable by third parties. The company’s significant litigation activity was in England, and it had a remunerated consultant based in London. The evidence also failed adequately to address the company’s return of its registered office to England and Wales.
4. Conclusion. The evidence did not displace the presumption in Article 3(1). The English court therefore had jurisdiction in relation to the winding-up petition. The judgment determined this preliminary jurisdiction issue; the remaining question was not addressed at this stage.