The High Court recently delivered a significant and precedent-setting decision in the matter of MAC-Interiors Limited [2023] IEHC 395 on the jurisdiction of the Irish courts to appoint an examiner to a foreign-registered company.
A precedent decision
This decision is the first of its kind as, previously, the Irish courts had only gone so far as to appoint an examiner to a foreign-registered company where the company was a "related company" under section 517 of the Companies Act 2014 (the Act). Beauchamps previously advised the examiner in the matter of Compu B Retail Limited 2020 / 209 COS, (an examinership involving the largest premium reseller of Apple products in the UK and Ireland) where the High Court appointed an examiner over three related UK-registered companies as well as to the Irish-registered company.
MAC-Interiors Limited is incorporated and has its registered office in Northern Ireland, a jurisdiction which is outside the State and outside the EU. Section 2(1) of the Act defines a "company" as a private company limited by shares which is formed and registered under the Act. As a result, MAC-Interiors Limited is not a "company" within the meaning of section 2(1) of the Act.
The decision puts to rest the long-standing discussion about whether a company must be formed and registered under Irish company law to benefit from Part 10 of the Act and definitively confirms Ireland's jurisdiction to appoint an examiner to a foreign-registered company once the company has its centre of main interests in Ireland.
Centre of Main Interests
Section 508(2) of the Act provides that Part 10 of the Act (Examinerships) is subject to Council Regulation (EC) No. 1346/2000 (the Insolvency Regulation). Article 3 of the Insolvency Regulation provides that the courts of the Member State where the company's "centre of main interests" (COMI) is situated shall have jurisdiction to open insolvency proceedings. Article 3 goes on to state that the COMI shall be the place where the company "conducts the administration of its interests on a regular basis and which is ascertainable by third parties." Importantly, the registered office is presumed to be the centre of main interests of the company, but this is a rebuttable presumption under Article 3.
The company here is the principal trading company in a group of companies where the parent company is MAC Holdings Limited, also incorporated and registered in Northern Ireland. MAC-Interiors Limited was incorporated in Northern Ireland on 30 August 2002 and a branch was registered in the State on 26 September 2002. The principal activity of the company since its foundation has been the interior fit-out of commercial facilities in Ireland. Recently, the company expanded this business into the general construction sector in Ireland and in the UK.
The company currently has tenders submitted for a variety of projects in Dublin at George's Dock, Dawson Street, Sir John Rogerson's Quay and Malahide. These tenders formed part of the evidence relied upon to demonstrate that the company's COMI is in Ireland. Further evidence put forward by the company included inter alia:
- that the company's administrative and marketing headquarters are located in Dundrum, Dublin 16;
- that the company is tax resident in Ireland and files tax returns only in Ireland; and
- All of the company's 41 employees are resident in Ireland and work from offices either in Dublin or throughout the State.
Judge Quinn in the High Court noted that the evidence presented by the company proved that third parties, notably creditors, regard Dublin as the centre from which the company trades and where its affairs are administered. On that basis, the court was satisfied on the evidence that the presumption in favour of the place of the registered office had been rebutted and accordingly, the court found that the company has its COMI in the State. The court went on to find that the requirements for the appointment of an examiner under Part 10 of the Act had been met, and consequently an examiner was appointed.
Effect of the decision
The clarity provided by Judge Quinn's recent judgment is welcome news for any company with its centre of main interests in Ireland. Ireland is an attractive jurisdiction for companies seeking the benefit of a restructuring process: it has a high-success rate; it is English speaking; it will have automatic recognition throughout the European Union under the Insolvency Regulation; and it has decades of well-established jurisprudence. In the English Courts, the recent case of Re Silverpail Dairy Ireland Unlimited Company [2023] EWHC 89 confirmed that Irish examinership is a restructuring process that is recognised there under section 426 of the UK Insolvency Act 1986.
For more information, please contact Aisling Duffy or your usual contact in Beauchamps.
