When a declaration on COMI comes in handy

When a declaration on COMI comes in handy

What are the relevant factors the court will assess when making a declaration on the centre of main interests (COMI) for shipping companies, and what will this mean in practice?

Original news

Re Northsea Base Investment [2015] EWHC 121 (Ch), [2015] All ER (D) 202 (Jan)

The proceedings concerned an application, on behalf of the administrators for each of the applicant companies, for a declaration in relation to each company that the COMI was England and Wales, within the meaning of Council Regulation (EC) 1346/2000 (on insolvency proceedings). The Companies Court held that the legislation made it clear that the presumption was that the COMI of the company would be the state of its registered office, which was Cyprus. However, there was sufficient evidence to rebut that presumption and the declarations sought would be granted.

What were the jurisdictional factors?

Six ship companies were special purpose vehicles, each owning a single ship in the fleet. These six ship companies were themselves all 100% owned by the second applicant, Baltic Tankers Holding Limited (Baltic Tankers), which in turn was 100% owned by the first applicant, Northsea Base Investment Limited (NSBI). The sole shareholder of NSBI was Hamilton Corporation, incorporated in Nevis. The corporation was owned in broadly equal shares by three Nevis family trusts, each family trust settled by different individuals. All three of the settlors of these trusts were also directors of the shipping agent, Marine Cross Services Limited (Marine Cross).

There were connections to various jurisdictions, including:

England & Wales: The ship companies used a shipping agent (Marine Cross) incorporated in England to conduct their operations and management. The commercial management was subcontracted out (to Scorpio) and carried out in the UK.  All payments demanded by trade creditors were paid by Marine Cross as agents; the agents directed payments to be made in England Invoices were raised by trade creditors to Scorpio India. Charterparties were dealt with both through Scorpio UK and Marine

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About the author:
Kathy specialises in restructuring and cross-border insolvency. She qualified as a solicitor in 1995 and has since worked for Weil Gotshal & Manges and Freshfields. Kathy has worked on some of the largest restructuring cases in the last decade, including Worldcom, Parmalat, Enron and Eurotunnel.