A common question we are asked to answer is how persons who are resident outside of England and Wales can present a personal bankruptcy petition here. The question we are really being asked to consider is whether the court has jurisdiction to determine bankruptcy proceedings at law over another country in which the debtor on the face of it appears to be active in business or resident. In order to answer that question the person needs to provide us with full details of their circumstances as these can hold the key to whether or not a petition is possible. In this article we will try to set out the broad requirements which need to be considered in order for the court to establish jurisdiction.
There are two key principles to consider in order to answer the question; (1) whether one of the conditions set out in section 265 of the Insolvency Act 1986 applies and (2) whether the person presenting the petition is a European national or if they come from a country outside the European Union, which may engage the EC Regulation on Insolvency Proceedings 2000.
The requirements of section 265 provide that the court has jurisdiction where the debtor can show either (1) he is domiciled in England and Wales (2) he is personally present on the day of presentation of the petition (3) at any time in the three years immediately before presenting the petition the debtor was ordinarily resident in England and Wales or did business here.
If the person wishing to present a petition is a European citizen or is resident in another member state then the EC Regulation on Insolvency Proceedings 2000 provides that they need to establish their Centre Of Main Interests (COMI) is England and Wales. There is a broad definition of what this means in the Recitals to the EC Regulation which states “The ‘centre of main interests’ 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”. Therefore broadly speaking if a debtor wishes to establish his COMI is England and Wales they need to show that they are resident and/or conducting their business here.
If there are assets within the England and Wales jurisdiction owned by the debtor, but their centre of main interests is determined to be elsewhere then the court only has power to deal with secondary proceedings in respect of those assets alone, whilst the member state where the debtor’s COMI is situated will have the main jurisdiction.
Accordingly, everything will depend on where the debtor is resident. If you are thinking of presenting a petition with an international element, then you should seek specialist advice on the complex question of jurisdiction.