El-Ajou v Dollar Land (Manhattan) Ltd

I have before me an application by Dollar Land (Manhattan) Ltd. to restrain advertisement and any further steps being taken by Abdul Ghani El-Ajou, who has petitioned for the winding up of Dollar Land.

Anyone familiar with the law reports over the last quarter of a century will have seen both the names of El-Ajou and Dollar Land quite frequently in those reports. There has been a great deal of litigation, and the most recent case came to trial before Mr. Warren, Q.C. as he then was (now Mr. Justice Warren), and he gave Judgment in Mr. El-Ajou's favour. Specific directions were given as to the ability of Dollar Land to appeal in the circumstance that what was required of Dollar Land was payment into court of sums of principal and interest. As I understand the case, the principal money required to be paid in according to that Judgment has been paid, but the interest, which is very substantial, has not. Mr. El-Ajou accordingly has petitioned for the winding-up of Dollar Land for failure to pay that interest.

There are two principal questions which arise, but I am only at this stage dealing with one of them, which emerged rather late in the consideration of the case by the parties and was raised by Mr. Levy on behalf of Dollar Land urging that under Council Regulation 1346/2000/EC/Article 3, which is headed 'International Jurisdiction', there was in fact no jurisdiction to wind up Dollar Land in the United Kingdom, or, more specifically, in England and Wales. If that is well-founded, then it must be right to prohibit Mr. El-Ajou going further with advertisements and so on. There is no point in advertising a petition which is doomed to fail. This has been dealt with as a preliminary point.

I need to look therefore at Article 3, which says this:

“The Courts of the member state within the territory of which the centre of a debtor's main interest is situated shall have jurisdiction to open insolvency proceedings. In the case of a company or legal person, the place of the registered office shall be presumed to be the centre of its main interest in the absence of proof to the contrary.”

It transpires that Dollar Land has a curious history as to its registered office. It began life as incorporated in England and Wales. In April 1999 it adopted a Memorandum and Articles, exporting its registered office to Brussels, Belgium. But, in October 2004 it adopted further provisions which brought its registered office back into this country - I think, in fact, to Wembley.

Miss Harman, for Mr. El-Ajou, has the benefit of the presumption which I have just read in para. 1 of Article 3. But, it is accepted by both her and Mr. Levy, for Dollar Land, that the presumption is rebuttable. What, then, is needed to rebut it, and has it been rebutted? That reference to the 'centre of a debtor's main interest' (its "COMI") is amplified a little, but importantly, in the preamble no. 13 to the Council Regulation on Insolvency Procedures, which says this:

“The centre of main interest should correspond to the place where the debtor conducts the administration of his interests on a regular basis, and is therefore ascertainable by third parties”.

I think those last words - '-- and is therefore ascertainable by third parties - are of great importance. It is of the essence that there is a recognised need of third parties to be able to ascertain the centre of main interest (and hence where relief may properly be sought) tolerably readily and even without, perhaps, the co-operation of the debtor concerned.

What then is relied upon to displace the presumption? Mr. William Stern has put in a witness statement. He is a consultant to the company. He is well remunerated as consultant. It is proper that he should be a consultant and no more because he is serving a disqualification as a director that began in 2000 and runs to 2012. But as such consultant - and it later transpires he is a person authorised to depose in this application on behalf of Dollar Land - he says a number of things. At para. 14 of his witness statement he refers to 'the migration in March 1999 to Belgium'. Quite remarkably, he fails to mention the re-migration in October 2004 which I have mentioned. He then goes on, “All of the Applicant's directors are Belgian or French”. That seems not to be so - one is Swiss and one is a Netherlands Antilles company. Then he says, "The board meets in Brussels". Well, where a board actually meets is not, it seems to me, a matter to be given very much weight in ascertaining where the COMI is. In particular, it is not the sort of thing that a third party would readily be able to ascertain. He continues, "Its meetings are conducted in French". Well, it may be that the minutes of meetings are sometimes in French. Even then, it may be that a parallel text in English is used. But how the meetings themselves are conducted, and in what language, is not amplified beyond that simple assertion. Its accounts, he says, are expressed in euros. But, that, it seems to me, is not an indication of the company having no COMI in the United Kingdom. All its business is in Belgium, it is said. Well, true it is that it once owned a large property - a block of property - in Belgium, but that was sold. Its main activity since the sale would seem to have been negotiations with the Atenor - another company - and litigation, chiefly in England (or perhaps exclusively in England) in relation to dealing with the proceeds. I am not all convinced that it has any independent business, or that that independent business is in Belgium. "In distinction to this", continues Mr. Stern, "the Applicant has had no directors resident in the United Kingdom since 1999". Well, so be it. But, it has had a consultant here, and a well-remunerated consultant here. Indeed, its own writing paper indicates that response (at any rate in that case) was to be made to Mr. William Stern's address in London.

"It has a bank account in Belgium", continues Mr. Stern. But, that is not the sort of thing that a third party would necessarily know, or even be able to ascertain. I come back to emphasising those words: "-- and is therefore ascertainable by third parties". It says it has no office other than its registered office in England and Wales. Well, that might be so, but I am not convinced either that it has what one might call a working office anywhere else. It says it conducts no business in England and Wales. But, in a sense, its litigation has been an extremely important aspect of its existence over the last few years, and that was in England. It is said that it has no assets within the jurisdiction. That may be true. It has a chose in action. Where that is situate, I am far from sure. But, merely that it has no assets within the jurisdiction does not really point greatly to where its COMI is.

It has no employees in England, it is said. But I come back to the fact that it has an important consultant to it, remunerated at some £50,000 per year, in this country. The fact that he is not an employee seems not necessarily to be of any great importance if he is at all events a consultant.

Emphasising the last words "-- and is therefore ascertainable by third parties" I do not find that there is sufficient evidence to displace the presumption in Article 3(1). Hence, as it seems to me, there is jurisdiction so far as concerns Article 3(1) .