East-West Logistics LLP v Melars Group Ltd

In determining a company’s centre of main interests, the court must conduct a principled inquiry into the evidence. The registered-office presumption cannot be used as a default finding merely because the evidence is difficult or incomplete.

COMI is assessed at the date of the request to open insolvency proceedings. The court must make a comprehensive assessment of objective factors ascertainable by third parties, including where the company’s administration, contractual and litigation interests, banking arrangements and professional advisers are located. A move of registered office may be genuine even if self-serving, but the court must scrutinise whether the asserted relocation is real or illusory. Subsequent events may assist in determining the position at the relevant date.

East-West Logistics LLP petitioned for the winding up of Melars Group Limited. The petition relied principally on the company’s failure to satisfy a judgment debt of approximately US$657,000. Melars opposed the petition on jurisdictional grounds, contending that its centre of main interests was in Malta, where its registered office was located.

The company had moved its registered office from the British Virgin Islands to Malta after service of the BVI proceedings. The evidence indicated that it had no operational office or business administration in Malta. The central issue was whether the registered-office presumption under the applicable EU insolvency regime had been rebutted, and whether the company’s COMI was instead in the United Kingdom.

1. Jurisdiction and applicable regulation. The proceedings had not previously reached the stage at which insolvency proceedings were opened. The court therefore applied the recast EU insolvency regulation, Regulation (EU) 2015/848, rather than Regulation (EC) 1346/2000.
2. Nature of the inquiry. The court was required to examine of its own motion whether the company’s COMI was actually within its jurisdiction. Where competing jurisdictional claims exist, the registered-office presumption cannot operate as a fall-back mechanism to avoid an evidential inquiry. The court had to reach a principled decision on the evidence.
3. Relevant factors. COMI was assessed at the date of presentation of the petition. The court considered the company’s contracts, choice of English law and London arbitration, litigation in England, English and Swiss legal advisers, banking arrangements, and the location of a judgment creditor. Language used, directors’ nationality and directors’ addresses carried little or no weight on the facts. The existence of contracts alone would not have been sufficient, but they formed part of the comprehensive assessment.
4. Evidence and subsequent events. The company’s failure to provide basic information about where it conducted its business justified adverse inferences. Later events could be considered where they cast light on the company’s position at the relevant date. The later opening of English Revolut accounts supported the inference that England was regarded as a place from which the company administered its interests.
5. Conclusion. Malta was only a registered-office location and operated as a letter box. The company administered interests in both the United Kingdom and Switzerland, but the greater use of English law, London arbitration, English litigation and English lawyers meant that, on the balance of probabilities, the United Kingdom was its main centre of interests. The registered-office presumption was rebutted, and the court had jurisdiction to wind up the company.
6. The usual compulsory winding-up order was made.