The Trustees of the Olympic Airlines SA Pension and Life Assurance Scheme v Olympic Airlines SA

The Supreme Court considered whether a foreign company whose centre of main interests was in another EU member state possessed an "establishment" in the United Kingdom within the meaning of Council Regulation 1346/2000 (article 2(h)) so as to permit secondary insolvency (winding-up) proceedings under article 3(2). The court held that the words "economic activity" in article 2(h) must be read as referring to activity carried on from a fixed place of business that is economic, non-transitory, exercised from a place of operations and involving the debtor's assets and human agents in dealings with third parties. Internal administration associated with winding up does not satisfy the requirement. Applying that test to the facts, the activities at the company's last UK office were confined to internal winding-up tasks and therefore did not constitute an "establishment"; accordingly the English court lacked jurisdiction under the Regulation to open secondary proceedings.

The trustees of the Olympic Airlines pension scheme presented a winding-up petition in England on 20 July 2010 so that the scheme could qualify for entry into the Pension Protection Fund. The underlying company, Olympic Airlines SA, had been placed in liquidation in Greece on 2 October 2009 and main liquidation proceedings were continuing there. The central issue was whether Olympic had an "establishment" in the United Kingdom on the date of the petition within the meaning of article 2(h) of Council Regulation 1346/2000, because if its centre of main interests was in Greece the English court could open only secondary proceedings based on the existence of an establishment under article 3(2).

The High Court (the Chancellor) found that the activities carried on at Olympic's former London office amounted to "non-transitory economic activities" and made a winding-up order. The Court of Appeal reversed that decision, concluding that the remaining staff were engaged only in winding-up activities and that those activities did not constitute the relevant economic activity on the market. On further appeal the Supreme Court analysed the definition in article 2(h) in the light of the Virgos-Schmit Report and the case law (including the Court of Justice's decision in Case C-396/09 Interedil). The court framed the elements of the test: the activity must be economic, non-transitory, carried on from a place of operations, and employ the debtor's assets and human means; crucially the activity must be of a nature involving business dealings with third parties rather than mere internal administration.

Applying these principles, the Supreme Court concluded that the office at 11 Conduit Street was engaged only in internal administration associated with winding up (payment of small bills, liaison with the Greek liquidator, disposal of insignificant assets) and not in subsisting business activity open to the market. The court therefore held there was no "establishment" in the United Kingdom on 20 July 2010 and dismissed the trustees' appeal. The court also held that the point was acte clair and no reference to the Court of Justice under article 267 TFEU was required.

The appeal was dismissed. The Supreme Court held that article 2(h) of Regulation 1346/2000 must be read as requiring an "establishment" to carry on an economic, non-transitory activity from a place of operations using the debtor's assets and human means in dealings with third parties; mere internal administration and winding-up activity does not suffice. On the facts Olympic's London office was engaged only in internal winding-up administration and therefore was not an "establishment" capable of supporting secondary proceedings.

High Court (Chancellor) made a winding-up order [2013] 1 BCLC 415; reversed by the Court of Appeal [2014] 1 WLR 1401 (see also [2013] EWCA Civ 643); appeal to the Supreme Court [2015] UKSC 27 which dismissed the appeal.