Ireland Update: High Court Appoints Examiner to Non-Irish Registered Company

The High Court has delivered its written judgment on a recent decision that was the first of its kind by appointing an examiner to a company registered outside of the State, as it was established that its centre of main interests was in the Republic of Ireland.

Mac Interiors Limited (the “Company”), an entity incorporated in Northern Ireland, had in May, earlier this year, brought an application to the High Court for the appointment of an examiner. The application was necessitated as a result of significant trading losses incurred, primarily induced by the onset of the Covid-19 pandemic.

Mr. Justice Quinn, noted that the Court was being asked to consider ‘a significant and previously undecided point regarding the jurisdiction of the Court to make the appointment’.

Article 3(1) of the EU Insolvency Regulation Recast, EU 2015/848 (the “Recast Regulation”) provides that the courts of the Member State within the territory, of which the centre of the debtor’s main interests is situated, shall have jurisdiction to open insolvency proceedings.

In the case of a company, the place of the registered office shall be presumed to be the centre of its main interests in the absence of proof to the contrary.

On the basis of the evidence submitted as part of the Company’s application, the Court was content in finding that the Republic of Ireland was the centre of main interests. This could be ascertained due to a range of factors, such as, the principal commercial activity of the Company being conducted in this jurisdiction since its foundation, the majority of the personnel of the Company being broadly based in the Republic of Ireland, the administrative and marketing headquarters of the Company being located in Dublin and, in particular, the fact that the Company was tax resident in the State.

It was further noted by the Court that Article 7(1) of the Recast Regulation states that the law applicable to insolvency proceedings shall be that of the Member State within the territory of which such proceedings are opened.

The Court detailed that by virtue of the doctrine of direct effect, the Recast Regulation had been successfully transposed under Irish law, and S. 508(2), Part 10 of the Companies Act 2014, which governs the framework of examinership in the State was subject to the Recast Regulation. Annex A to the Recast Regulation lists the insolvency proceedings captured by the Recast Regulation and includes examinership.

In light of the above reasoning, the Court held that it was afforded the requisite jurisdiction to permit the Company to initiate the examinership process in Ireland and, accordingly, granted an order appointing the examiner.

Comment

This decision can be seen to represent a very positive development in the context of opening the gate to a greater number of foreign companies with a COMI in Ireland to avail of Ireland’s well established examinership regime as an effective means of restructuring.

By ByrneWallace, Ireland, a Transatlantic Law International affiliated firm.

For further information or for any assistance please contact ireland@transatlanticlaw.com.

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