Trade Holding Pl-UK Ltd, Re

Jurisdictional requirements for sanctioning a cross-border merger under the Companies (Cross-Border Mergers) Regulations 2007 require strict compliance. The court has no power to waive a requirement that a pre-merger certificate be submitted within six months of its issue. A later document merely confirming that an earlier certificate remains effective under foreign procedural law is insufficient. A fresh certificate may satisfy the requirement, including where it is issued after the English application, if the application remains before the court when the certificate is made. The court may consider creditor impact, but the judgment leaves unresolved whether that forms part of the court’s function under regulation 16(1).

Trade Holding PL-UK Ltd, an English company, sought sanction for a cross-border merger by absorption of Centrum Handlowe HIT S.A., a Polish company, under regulation 16 of the Companies (Cross-Border Mergers) Regulations 2007. The Polish pre-merger certificate had been issued about 12 months before the application, exceeding the six-month limit in regulation 16(1)(d). The applicants relied on Polish res judicata principles and a later Polish court document confirming the continuing effect of the original certificate. The central issues were whether the requirement could be waived, whether the later document sufficed, and whether a fresh certificate issued after the application could satisfy the statutory condition.

The court granted sanction after a fresh Polish pre-merger certificate was produced.

1. Strict compliance. Regulation 16(1)(d) requires the application to be made no more than six months after the relevant pre-merger certificate. The jurisdictional conditions in regulation 16 cannot be waived. The approach in Re MDNX Group Holdings Ltd [2019] BCC 442 emphasised that the court’s discretion to sanction arises only when the jurisdictional requirements are met.
2. Purpose of the time limit. The six-month requirement in regulation 16(1)(d), reflecting article 11(2) of Directive 2005/56/EC, ensures that the sanctioning court has sufficiently current confirmation from each member state that the required pre-merger steps have been completed.
3. Insufficient Polish documents. The evidence concerning Polish res judicata principles did not establish that a further certificate could not be issued. The document dated 31 July 2019 merely confirmed that the original certificate remained binding. It did not contain a fresh certification or evidence that the Polish court had undertaken the inquiries normally required before issuing a pre-merger certificate.
4. Earlier authority. M2 Property Invest Limited [2017] EWHC 3218 (Ch) did not assist. Although Snowden J had rejected an argument that the certificate was a judgment under the Recast Judgment Regulation, and had expressed an undecided view concerning article 10(2) of the Directive, that reasoning did not permit the court to treat the 31 July document as a fresh certificate.
5. Fresh certificate. The certificate issued by the Polish court on 14 August 2019 satisfied regulation 16(1)(d). The English application was treated as continuing until the date of the order, so the certificate was made before the application was finally determined.
6. The court did not decide whether regulation 16(1) requires consideration of creditor prejudice, because the merger would not materially prejudice either company’s creditors.