Nektan (Gibraltar) Ltd, Re In the Matter of the Insolvency Act 1986

For the purposes of an administration under Schedule B1 to the Insolvency Act 1986, a Gibraltar-incorporated company may fall within the statutory definition of “company” even where its centre of main interests (COMI) is in Gibraltar. The better construction is that a company incorporated outside an EEA State may qualify where its COMI is in a member State other than Denmark, with Gibraltar treated as a territory of the United Kingdom for the purposes of the EU insolvency regime. In any event, jurisdiction exists where the registered-office presumption is rebutted and the company’s COMI is shown to be in England. COMI depends on the place of regular administration of the debtor’s interests, ascertainable by third parties, assessed comprehensively. A single physical head office is unnecessary.

Nektan (Gibraltar) Ltd, a Gibraltar-incorporated company and subsidiary of Nektan plc, applied urgently for an administration order under paragraph 12(1)(a) of Schedule B1 to the Insolvency Act 1986. The company was insolvent, HMRC was its principal creditor, and administration was proposed to facilitate a sale of its operating business and produce a better result for creditors than liquidation.

The jurisdictional issue was whether a Gibraltar-incorporated company, whose registered office and potentially its COMI were in Gibraltar, was a “company” for the purposes of Schedule B1. The court also considered whether the company’s COMI had shifted to England.

1. Administration order made. The Company was insolvent, and administration was reasonably likely to achieve a better result for creditors as a whole than winding up. The conditions in paragraphs 3(1)(b) and 11(a) and (b) of Schedule B1 were satisfied.
2. EU insolvency jurisdiction. The EU Regulation determines international jurisdiction between Member States, while territorial jurisdiction within the relevant Member State is governed by domestic law. Gibraltar is treated as a territory of the United Kingdom for the purposes of the EU insolvency regime. Regulation 3 of Gibraltar’s Insolvency (Cross Border Insolvencies) Regulations 2014 could not itself confer jurisdiction on the English court.
3. Meaning of “company”. If necessary, paragraph 111(1A)(c) of Schedule B1 would be construed so that the English court has jurisdiction over a Gibraltar-incorporated company even where its COMI is in Gibraltar, assuming COMI is not established elsewhere. The conclusion was supported by the statutory history, the purpose of the 2005 amendments, the earlier wording considered in Re Salvage Association, and the specific exclusion of Denmark. The drafting remained unclear.
4. COMI. Article 3(1) of the EU Regulation creates a rebuttable presumption that a company’s COMI is at its registered office. The relevant inquiry is the place where the company regularly administers its interests in a manner ascertainable by third parties. A comprehensive assessment is required. Relevant factors include management, finance, sales, human resources, creditor dealings, customer-facing activity and economic operations. A single physical head office is not essential.
5. The Company’s key management and administrative functions were carried out in England. Its central administration and relevant economic activity were located there, so the registered-office presumption in favour of Gibraltar was rebutted. Jurisdiction was established and the administration order was appropriate.