Vol 6 (2009) - Issue 5

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Cartesio Oktató és Szolgáltató bt (Case C-210/06), ECJ (Grand Chamber), 16 December 2008

The context

It is now some time since the European Court of Justice (ECJ) ruled in the case of Eurofood IFSC Ltd that the presumption contained in Article 3(1) of Council Regulation (EC) 1346/2000 on insolvency proceedings (the Regulation) – in favour of the registered office as the location of the centre of main interests – may be rebutted only if factors which are both objective and ascertainable by third parties enable it to be established that an actual situation exists which is different from that which locating it at its registered office is deemed to reflect. Mobility of a debtor’s centre of main interests (COMI) has also been acknowledged for some time, albeit tempered by the ECJ’s judgment in the case of Staubtiz-Schreiber. The result is that a debtor company may in principle transfer its COMI to another Member State, by migrating those elements of its administration which determine the location of its COMI, without upsetting the location of its registered office.

The judgment of the ECJ in Cartesio Oktató és Szolgáltató bt has brought a speedy end, however, to speculation that national legislation which may restrict the ability of a debtor company to move its COMI to another Member State will be incompatible with EC law. The case concerned the right to freedom of establishment embodied in Article 43 EC. The company (Cartesio) sought to transfer its operational headquarters from Hungary to Italy, but wished to remain registered in Hungary. The referring court sought the ECJ’s guidance on whether applicable Hungarian legislation, which prevented Cartesio from continuing to be governed in accordance with Hungarian law, was compatible with the right of establishment. Were the ECJ to have found such restrictions incompatible with the right of establishment, the consequence would have been to enhance the prospects for companies incorporated in Member States with similar legislation to migrate their COMI whilst leaving their registered office in the Member State in which the COMI was formerly located.

That was precisely the effect of the Advocate General’s Opinion in this case. He deemed such restrictions incompatible with EC law, the effect of which would have been to facilitate the migration of a company’s COMI from Member States possessing similar legislation. The ECJ, however, disagreed. It held that such restrictions were not precluded by the right of establishment under EC law. As such, it seems that Cartesio Oktató és Szolgáltató bt will not represent a step forward in favour of companies seeking to transfer their COMI to another Member State. Rather, national legislation which denies a company the opportunity to transfer its COMI whilst leaving its registered office behind, is to remain undisturbed.

Factual background and the questions referred

Cartesio was a betéti társaság (limited partnership) constituted in accordance with Hungarian law and registered in Baja, Hungary. On 11 November 2005, Cartesio applied to the commercial court to amend its registration in the local commercial register. It requested that its seat be amended to ‘21012 Gallarate (Italy), Via Roma No 16’, from the address of its former seat in Baja. That application was rejected.