Vol 3 (2006) - Issue 1

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Voluntarily Submitting to the Jurisdiction: Re TXU Europe German Finance BV [2005] BPIR 209

In this case, two companies in the TXU Group, incorporated in The Netherlands and the Republic of Ireland, passed resolutions in an attempt to place themselves in Creditors’ Voluntary Liquidation in the UK. The liquidators sought confirmation from the Court.
Registrar Baister gave a reserved judgment because the application raised a novel question, namely whether it was possible to place companies which are not registered in England and Wales into a CVL under the Insolvency Act. He was concerned with two questions:
whether it was possible for a foreign-registered company to be wound up voluntarily; and whether it was possible for such a company to pass the relevant resolution.

The Jurisdictional Question

The English courts have long enjoyed a jurisdiction to wind up companies registered abroad under section 221 of the Insolvency Act 1986. Until amended by the Insolvency Act 1986 (Amendment) (No. 2) Regulations2002, subsection (4) precluded the voluntary liquidation of a foreign company in these terms: ‘No unregistered company shall be wound up under this Act voluntarily’. The Amendment Regulations add the words ‘except in accordance with the EC Regulation.’1
The Registrar took the view that that provision may have lifted the prohibition on winding up a company voluntarily, but that it did not of itself confer jurisdiction to do so. Notwithstanding the wording of Rule 7.62 which provides that:
‘(1) Where a company has passed a resolution for voluntary winding up, and no declaration under section 89 has been made, the liquidator may apply to court for an order confirming the creditors’ voluntary winding up for the purposes of the EC Regulation;’
the Registrar remained concerned that there may yet be no jurisdiction because that part of the Rules only applies ‘in relation to companies which the courts in England and Wales have jurisdiction to wind up’.2 This, he felt, did not solve the riddle as to where such jurisdiction might lie.
The question which arose was therefore whether the EC Regulation itself conferred jurisdiction. In that respect there is a problem, in that Article 3(1) of the EC Regulation provides that 'The Courts of the Member State within the territory of which the centre of a debtor’s main interests is situated shall have jurisdiction to open insolvency proceedings …'