English courts have jurisdiction to appoint administrators in respect of a company incorporated in Gibraltar which had its centre of main interests in the UK (Re Nektan (Gibraltar) Limited)

English courts have jurisdiction to appoint administrators in respect of a company incorporated in Gibraltar which had its centre of main interests in the UK (Re Nektan (Gibraltar) Limited)

Nektan (Gibraltar) Limited was incorporated in Gibraltar. Its primary business was providing online gambling platforms to customers to businesses and individual players. These business activities led to tax liabilities to HMRC for remote gaming duty, which had increased from 15% to 21% on 1 April 2019, and the tax burden gave rise to a proposed restructuring involving an administration of the company.

Did a company incorporated in Gibraltar fall within the definition of ‘company’ in paragraph 111 of Schedule B1 to the Insolvency Act 1986 (IA 1986) such that the court has jurisdiction to make an administration order in England?

Falk J concluded that it did, and that it was appropriate to make an administration order on the basis that the centre of main interests (COMI) was in the UK, to the extent that was relevant, and found jurisdiction on that basis. Falk J added as obiter that the English court would still have had jurisdiction even if the COMI had been in Gibraltar.

Written by Robert Paterson, partner at Moon Beever LLP.

Re Nektan (Gibraltar) Ltd [2020] EWHC 65 (Ch), [2020] All ER (D) 53 (Jan)

What are the practical implications of this case?

The High Court’s ruling confirms for the first time that:

  • the court has jurisdiction to make an administration order in relation to a Gibraltar-incorporated company, even although Gibraltar is only a territory of the UK and not itself an European Economic Area (EEA) State  
  • the COMI can be in a jurisdiction where the company has no fixed premises, if the evidence shows that key management and administrative functions are nonetheless carried out there in a manner ascertainable by third parties

The Nektan case is therefore significant for two reasons:

  • the door is now firmly open for Gibraltar-incorporated companies to be successfully restructured using the administration process in England  
  • modern ways of working and the increasing provision of services online mean that a physical address in a jurisdiction (or lack of)

Subscription Form

Related Articles:
Latest Articles:

Already a subscriber? Login
RELX (UK) Limited, trading as LexisNexis, and our LexisNexis Legal & Professional group companies will contact you to confirm your email address. You can manage your communication preferences via our Preference Centre. You can learn more about how we handle your personal data and your rights by reviewing our  Privacy Policy.

Access this article and thousands of others like it free by subscribing to our blog.

Read full article

Already a subscriber? Login

About the author:

Zahra started working as a paralegal at Lexis Nexis in Banking and Insolvency teams in April 2019. Zahra graduated with a 2.1 honours in a BA French and Spanish, completed the GDL at BPP University and is seeking some experience before commencing the LPC. She has undertaken voluntary work for law firms in London, Argentina and Colombia.