A Greek company which had entered into liquidation in Greece and had closed its office in London except for two short-term employees solely dealing with matters of internal administration associated with the final stages of the company’s disposal of the means of carrying on business did not have an “establishment” in London for the purposes of article 2(h) of Council Regulation (EC) No 1346/2000, and so the court had no jurisdiction to order a secondary winding up of the company in England.

The Supreme Court so held, dismissing an appeal by the trustees of the Olympic Airlines SA Pension & Life Assurance Scheme from a decision dated 6 June 2013 of the Court of Appeal (Moore Bick LJ, Sir Stephen Sedley and Sir Bernard Rix) [2014] 1 WLR 1401 to allow an appeal by a company, Olympic Airlines SA, from a decision of Sir Andrew Morritt C [2013] 1 BCLC 415 who had granted the trustees’ petition for secondary winding up of the company in England.

The company had been wound up in October 2009 in Greece. Its London office had been closed a month later and no further customer business had been conducted from there. However it retained premises in London with two employees on short-term contracts to assist with the winding up. In July 2010 the pension trustees had presented a petition for the secondary winding up of the company in England so that responsibility for the pension scheme could be assumed by the Pensions Protection Fund. The company opposed the petition on the ground that since it was already being wound up in Greece the jurisdiction to wind it up in any other EU member state was limited by article 3(2) of Council Regulation (EC) No 1346/2000 to those member states in which it possessed an “establishment” as defined by article 2(h).

LORD SUMPTION JSC (with whom the other members of the court agreed) said that the definition in article 2(h) had to be read as a whole, not broken down into discrete elements, for each element coloured the others. The relevant activities had to be (1) “economic”, (2) “non-transitory”, (3) carried on from a “place of operations”, and (4) using the debtor’s assets and human agents. That suggested that what was envisaged was a fixed place of business. The requirement that the activities should be carried on with the debtor’s assets and human agents suggested a business activity consisting in dealings with third parties and not pure acts of internal administration. On the facts of this case the company had not been carrying on any business activity at the London premises on the date when the petition for secondary winding up had been presented. The last of the company’s business activities had ceased sometime before. All that the two employees who were retained at the London office were doing was handling matters of internal administration associated with the final stages of the company’s disposal of the means of carrying on business The company could not therefore be said to have had an “establishment” in the United Kingdom.