Precedents Cited

The judgment extensively references several key cases that have shaped the interpretation of COMI under the EU Regulation:

• Eurofood International IFSC Investments [2006] Ch 508: Established that COMI is defined by where the debtor conducts the administration of its interests on a regular basis and is ascertainable by third parties.
• Interedil Srl v Fallimento Interedil Srl [2011] ECR I-9915: Reinforced the necessity of objective and third-party ascertainable factors in determining COMI.
• Shierson v Vlieland-Boddy [2005] EWCA Civ 974: Provided guidance on distinguishing genuine shifts in COMI from forum shopping, emphasizing the need for permanence in the COMI location.
• Re Stanford International Bank [2009] EWHC 1441 (Ch): Highlighted the importance of public or easily ascertainable information in establishing COMI, rejecting the inclusion of factors known only to specific creditors.
• Lennox Holdings plc [2009] BCC 155: Emphasized the public nature of COMI determination, focusing on what is accessible to all creditors rather than individual knowledge.
• Leonmobili Srl v Homag Holzbearbeitungssysteme GmbH (Case C-353/15): Affirmed that COMI must be determined based on objective and publicly accessible criteria.
• MH v OJ (Case C-253/19): Reinforced that only factors accessible to third parties should influence the determination of COMI, ensuring legal certainty.

These precedents collectively underscore the judiciary's commitment to maintaining legal certainty and preventing abusive forum shopping by ensuring that COMI is determined based on transparent and objective criteria.

Legal Reasoning

The crux of the legal reasoning revolves around Article 3(1) of the EU Regulation, which presumes that a company's COMI is at its registered office unless proven otherwise through objective and ascertainable evidence. Judge Baister initially deviated from this principle by prioritizing the lack of tangible business operations in Malta over the presumption established by the registered office location. However, Mr. Justice Miles rectified this by reinforcing the importance of the presumption and clarifying that only objective factors accessible to third parties can rebut it.

Miles J emphasized that the presumption serves to provide creditors with predictability regarding insolvency proceedings. He meticulously dissected the evidence, noting that factors such as the use of English law, arbitration in London, or the location of legal representation are inherent in international business and do not necessarily reflect the actual administration of a company's interests. Moreover, he highlighted that these factors are not sufficiently ascertainable by a typical third-party creditor to warrant overturning the presumption.

Additionally, the Court of Appeal concurred with Miles J's interpretation, underscoring that the determination of COMI should not hinge on subjective assessments or the specific knowledge of individual creditors. Instead, it should be grounded in objective, publicly accessible information that aligns with the creditor's legitimate expectations.

Impact

The decision in East-West Logistics v Melars Group reasserts the primacy of the registered office in determining COMI under the EU Regulation. It clarifies that:

• The presumption laid down in Article 3(1) remains robust and cannot be easily rebutted without compelling objective evidence.
• Factors such as governing law clauses, arbitration locations, or legal representation, while relevant, are insufficient on their own to override the registered office presumption.
• Courts must prioritize the perspective of typical third-party creditors, ensuring that COMI determinations are based on publicly accessible and objective criteria.
• Efforts to shift COMI for self-serving purposes, especially to evade insolvency proceedings, will face heightened scrutiny, thereby discouraging forum shopping.

This judgment provides clear guidance for future insolvency proceedings, emphasizing the necessity for debtor companies to establish genuine administrative activities in their claimed COMI location. It also offers creditors a more predictable framework for initiating insolvency actions, reinforcing the stability and reliability of cross-border insolvency law within the EU.