The Supreme Court has handed down its judgment in the case of The Trustees of Olympic Airlines SA Pension and Life Assurance Scheme –v- Olympic Airlines SA. Pitmans’ Trustee company, PTL, were the Appellants.
The question at issue was what connection must a foreign company, that has its Centre of Main Interests (COMI) in another EU country, have within the United Kingdom, to entitle an English Court to wind it up.
This issue was important to the Trustees of the Olympic Airlines pension scheme because the answer determined from when the members of the Scheme would receive the benefit of the Pension Protection Fund’s pensions guarantee on liquidation of the employer. After the application was originally made, the government passed secondary legislation to ensure that the guarantee would be available. However, the issue remained important since the benefits that should have been paid to members will differ depending on whether the relevant date is that of the Greek or the English Winding Up proceedings and may be clawed back.
In this case, as the COMI of Olympic Airlines was in Greece, under the EU Regulation on Insolvency Proceedings, the English Courts could only open secondary proceedings and could only do that if the company possessed an “establishment” within the territory. This is “any place of operations where the debtor carries out a non-transitory economic activity with human means and goods” (albeit this term is intended to mean assets rather than goods).
At the time that the winding up petition was issued, most of the company’s business at the English premises had ceased and the only persons engaged were the General Manager, the Finance and Purchasing manager and an accounts clerk, all dealing with matters that arose during the course of winding down the company.
The issue the Supreme Court had in reaching a decision was that existing case law mainly deals with where a company’s COMI lies, which was not relevant here. Further, the question of what constitutes an “establishment” depends on the facts of the case.
The Supreme Court determined that what is envisaged by the definition of “establishment” was a fixed place of business where business activities are carried out involving dealings with third parties, not purely administrative acts.
The Court adopted a narrow view on the facts that the company undertook no external business in England at the time the petition was presented and therefore the English Court had no jurisdiction to make a Winding Up Order.