The English court had jurisdiction to wind up a company which had moved its registered office to Malta in order to avoid enforcement of a judgment. The registered office was no more than a "letter box", and the company's Centre of Main Interests was in England.
Melars Group Limited (“Melars”) was incorporated in the British Virgin Islands (“BVI”) in 2005 and traded in oil and petroleum. East-West Logistics LLP (“the Petitioner”) and Melars entered into a charterparty in 2011, which the Petitioner argued Melars breached the terms of.
The Petitioner began arbitration proceedings in London and later proceedings in the BVI. The Petitioner obtained judgment in default in the BVI in the sum of $657,839.18 and sought a winding up order of Melars in England.
In December 2015, Melars moved its registered office to Malta, two months after service of the claim form in the BVI proceedings.
The Petitioner argued Melars’ Centre of Main Interest (“COMI”) was in the UK and the move to Malta was merely illusory. Melars opposed the making of a winding-up order on the basis that the court had no jurisdiction as its COMI was in Malta, the location of its registered office. Melars argued that the registered office presumption applied and should particularly apply here because Melars “traded in the ether” or carried on its business from nowhere in particular.
The Judge referred to case of Eurofood IFSC Ltd “It follows that, in determining the centre of main interests of a debtor company, the simple presumption laid down by the Community legislature in favour of the registered office of the company can be rebutted only if factors which are both objective and ascertainable by third parties enable it to be established that an actual situation exists which is different from that which locating it at the registered office is deemed to reflect. That could be so in particular in the case of a 'letterbox' company not carrying out any business in the territory of the Member State where its registered office is situated.”
There was limited evidence available in relation to COMI at the time of the hearing, and the court drew adverse inferences from Melars’ failure to provide basic information about “what it did where”.
The court found that Melars had moved its registered office in order to make enforcement of the judgment more difficult. Referring to Shierson v Vlieland-Boddy, a debtor is entitled to move its COMI and to do so for self-serving reasons, however the move must be real not illusory. It was held that the registered office was no more than a "letter box" and as such Melars’ COMI was not in Malta. The Court then had to determine if the registered office was in the UK or Switzerland, where it also had significant links.
Factors considered which weighed in favour of the UK included:
- The charterparty agreement was governed by English law and was subject to arbitration in London. Melars was also party to a number of contracts which were governed by English law and/or contained arbitration clauses to be resolved in London.
- Melars had bank accounts with an English "online money institution".
- The debt due to the Petitioner was a judgment debt owed to an English entity.
- On a number of occasions, Melars had instructed English legal advisors.
It was held that, by a narrow margin, the evidence showed that the UK was where Melars did and had carried out the administration of its interests on the most regular basis and therefore on the balance of probabilities, its COMI was in the UK rather than Switzerland. The court therefore made the Winding Up Order requested.
The order was made notwithstanding that some of the evidence and events, such as the opening of the bank accounts, supporting the Petitioner’s case occurred after the presentation of the petition. Applying the Shierson v Vlieland-Boddy case the judge stated that it was important to look at events after presentation of the petition to throw light on what the relevant position was at the time of the presentation of the petition.
In the case of the bank accounts the judge noted that, despite Melars having been registered in Malta for some two years prior to opening the accounts, they had chosen to open accounts in England rather than Malta.