You name it! Dutch court adds to the criteria relevant in (not) rebutting COMI presumption for companies

Thank you Arie van Hoe for alerting me to this in some respect amusing judgment by the court at The Hague. Amusing, in that the court adds a curious consideration to the criteria for third parties’ perception of COMI.

Central Eastern European Real Estate Shareholdings BV is incorporated in The Netherlands. Per Article 3(1) of the Insolvency Regulation, The Netherlands is therefore presumed to be the Centre of Main Interests – COMI of the company. This presumption can be rebutted using the definition of COMI included in recital 13: COMI is the place where the debtor conducts the administration of his interests on a regular basis and is therefore ascertainable by third parties. The ECJ has repeatedly emphasised the combination of both: administration of the interests elsewhere,  and this as such being recognisable to third parties.

CEE itself suggests Romania as COMI. The court at The Hague correctly emphasises both elements of recital 13, paying particular attention to third party ascertainability. Consultation of the commercial register, the Court flags, reveals clearly to third parties that the company is being managed from the Netherlands, by Dutch directors. It is here that the Court adds the reference to the commercial register revealing the ‘typically Dutch names’ of the directors. That is amusing and was bound to attract attention – although to be fair it is not the core reasoning of the court. Of some relevance was the fact that the directors apparently, as was revealed at the hearing, regularly consult, in The Netherlands, with Netherlands based consultants.

It is of course difficult to read the entire mind of the court just from the succinctly written judgment, however what seemed to be crucial was the lack of convincing elements, provided by the company, that to third parties Romania clearly was the place of administration of the company’s interests. Indeed the judgment reveals no such factors at all. Aforementioned elements therefore acted in support of the presumption.

Reference to the directors’ names opens up an interesting prospect: that of first name shopping (or indeed change of name by deed poll) to impact on COMI. (Please just put that down as a silly suggestion rather than sound advice. For, again, the court itself also just made the comment in support ex multi).

Geert.

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