Olympic Airlines SA Pension and Life Assurance Scheme v Olympic Airlines SA

For the purposes of Council Regulation (EC) 1346/2000, an establishment requires a place of operations where the debtor conducts a non-transitory economic activity using human means and assets. The activity need not be permanent or directed towards an external market. A company in liquidation may retain an establishment while it has an organised and stable structure for winding up its affairs. The relevant date is the date on which the territorial insolvency petition is presented, assessed by reference to the circumstances before and after that date. The establishment must nevertheless be objectively ascertainable by third parties. Internal liquidation work, including dealing with creditors, reconciling accounts and disposing of assets, may satisfy the requirement of economic activity.

The trustees of the Olympic Airlines S.A. Pension and Life Assurance Scheme petitioned to wind up Olympic Airlines SA in England. Olympic Airlines had already entered special liquidation in Greece, which constituted the main insolvency proceedings for the purposes of Council Regulation (EC) 1346/2000.

The trustees relied on a substantial pension debt and sought an English winding-up order so that the Pension Protection Fund could assume responsibility for the scheme. Olympic Airlines accepted that the court had jurisdiction under Insolvency Act 1986, section 221, in the absence of the Regulation, but contended that Article 3(2) restricted territorial proceedings to a Member State in which it possessed an establishment. The central issue was whether an establishment existed in England on 20 July 2010, when the petition was presented.

1. The petition was granted and the usual compulsory winding-up order was made. Olympic Airlines possessed an establishment in England on 20 July 2010, giving the court jurisdiction under Article 3(2) of Council Regulation (EC) 1346/2000.

2. The relevant date was the date of presentation of the petition. The facts existing on that date had to be evaluated in the light of what had happened before and what followed afterwards.

3. The autonomous and uniform interpretation of establishment stated by the Court of Justice in Interedil srl v Fallimento Interedil srl (2011) Case C-396/09 required a place of operations, a non-transitory economic activity, human means and assets. These requirements involved a minimum level of organisation and a degree of stability.

4. Liquidation did not, of itself, prevent a company from having an establishment. A company in liquidation could retain an establishment while its organised activities of winding up its affairs continued. Permanence was not required. The remaining London staff were engaged in reconciling accounts, dealing with creditors, responding to the Greek liquidator and disposing of assets. Those activities were economic and non-transitory even though the company had ceased selling air tickets.

5. The activity also had to be outward in the sense that the establishment could be ascertained by third parties through objective factors. Olympic Airlines remained in possession of its London office, with staff, telephone and internet facilities, records and assets. Its establishment therefore retained the physical and organisational structure and stability required by Article 2(h).

6. The court declined to derive assistance from decisions of courts in other Member States, because they could not authoritatively determine the autonomous meaning of the Regulation and factual comparisons could mislead. The trustees were indisputable creditors, and an English winding-up order was necessary because a foreign winding-up was not an insolvency event under section 121(3) of Pensions Act 2004 and Article 3(2) permitted only winding-up secondary proceedings.