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Moon Beever LLP obtains an administration order for client company incorporated in Gibraltar.


On 7th January 2020, Moon Beever LLP obtained an administration order for our client company incorporated in Gibraltar. Mark Phillips and Julie Swan of PCR (London) LLP were appointed as joint administrators.  This is believed to be the first administration order made by the High Court in England and Wales for a Gibraltar company, and the application was made in the context of a restructuring of the wider corporate group.



The main business of Nektan (Gibraltar) Limited (Company) was providing online gambling platforms in “white label” form to customers to brand the product in its own name and provide online casinos and the like to end consumers. A proportion of the contracts were with individual players. The Company had a licence from the UK Gambling Commission.

These business activities led to tax liabilities to HMRC for Remote Gaming Duty, but the tax rate had increased from 15% to 21% on 1 April 2019, and the tax burden gave rise to a proposed restructuring with the intention of repaying the debts over a period of time.


Administration Order

The Court had no doubt that the Company was insolvent on the evidence, and that an administration order would be reasonably likely to achieve the purpose of the administration. The conditions for an administration order had been met. The judgment is notable because the Company was incorporated in Gibraltar but traded substantially in the UK. Did the English Court have power (jurisdiction) to place a Gibraltar entity in administration? Would that power depend on the centre of main interests (COMI) being in the UK?



These questions did not appear to have been raised before in the English Courts. What was the precise status of Gibraltar in the context of EU insolvency law? Gibraltar is not expressly referred to in the Recast EU Insolvency Regulation (Regulation). It is a territory of the EU to which the Regulation applies, as the United Kingdom – which at the time of writing is still an EU member - includes Gibraltar. Gibraltar passed its own legislation stating that the Regulation should apply as if Gibraltar and the UK were separate Member States, but legislation passed within Gibraltar is not binding in England and does not alter the Regulation in any way.

EU case law states that Gibraltar is a European territory and that the UK was responsible for its external relations.  That is not the same as Gibraltar itself being a Member State, it simply means that the Regulation applies to Gibraltar as a territory of the UK.

Turning to domestic law, the Court only has power to make an administration order in relation to a “company” (para 111 Schedule B1 Insolvency Act 1986), and “company” is defined as:

(a) a company registered under the Companies Act 2006 in England and Wales or Scotland,

(b) a company incorporated in an EEA State other than the United Kingdom, or

(c) a company not incorporated in an EEA State but having its centre of main interests in a member State other than Denmark.


(1B) In sub-paragraph (1A), in relation to a company, ‘centre of main interests’ has the same meaning as in Article 3 of the EU Regulation.”


Which limb applies? Not the first, because a Gibraltar company would obviously not be incorporated under the UK companies legislation. The second limb doesn’t work, because we’ve just seen that Gibraltar isn’t a Member State in its own right. Even the third limb is difficult, because the Company isn’t “not incorporated” in a Member State (excuse the double negative). But we know from this definition and from case law that provided the COMI is in the UK, the English courts can make an administration order in relation to English companies, companies incorporated in the EEA (for example Germany) and companies not incorporated in the EEA such as the state of Delaware (for example Re BRAC Rent-a-Car International Inc [2003] B.C.C. 249). The net is now very wide: why would Parliament seek to exclude Gibraltar? The Court considered that “member State” in the third limb should be read in the context of Article 3 of the Regulation, referring to Gibraltar as a territory of the UK.


Article 3 states:

“The courts of the Member State within the territory of which the centre of the debtor's main interests is situated shall have jurisdiction to open insolvency proceedings (‘main insolvency proceedings’)...” (our emphasis).

The definition of “company” in para 111 has been amended on a number of occasions, but the Court noted that the definition had recently been broadened, rather than narrowed, and it would be odd if the effect was that the Court could no longer place a Gibraltar incorporated company in administration unless its COMI were in the UK. Falk J therefore decided in passing that the English Courts do have jurisdiction in relation to Gibraltar companies, even if the COMI is in Gibraltar rather than the UK (but not elsewhere).



On that basis, it wouldn’t matter whether the Company’s COMI was in Gibraltar or the UK. The registered office was in Gibraltar, and the Regulation presumes that COMI is located in the same place, but that presumption can be rebutted by evidence. The Court found on the evidence that COMI was in the UK. Her ladyship did not re-analyse the COMI requirements (which are now well known) but highlighted that:

  1. Although the Company did not have premises in the UK anymore, its key management and administrative functions were undertaken in England. Key staff were based there including the CFO, accounts manager, HR manager and sales manager.
  2. When these key staff members interacted with third parties they did so in the UK; for example through sales meetings and post-contract enquiries.
  3. Financial decisions were made by the CFO predominantly in the UK. Whilst the bank accounts were located in Gibraltar, the banking arrangements were mainly dealt with in the UK. The bank was not itself a creditor.
  4. The CEO was resident in Gibraltar but spent a significant amount of business hours in the UK (within permitted tax limits).
  5. Whilst the wider corporate group had a Gibraltar office with 32 members of staff, its role in relation to the Company specifically was that of a call centre, dealing with customer queries and “after-care” password, accounts and IT issues. Customers were provided with a UK telephone number which passed customers automatically to a Gibraltar call centre.
  6. Board meetings were split equally between the UK and Gibraltar, but that was not material because third parties would not necessarily have known that.
  7. The largest creditor was HMRC in the UK, and communications were handled via the Company’s tax advisers in London.
  8. The majority of customers were situated in the UK, although some contractual arrangements were governed by the law of Gibraltar.


Therefore, despite the Company having no physical address in England, the Court found that the COMI was in England because the sales, accounts, HR and finance functions were located in England. That was ascertainable by third parties because they met with key personnel in England, and were supplied with a London telephone number. That outweighed the primarily “call-centre” function of the Gibraltar office.

The presumption having been rebutted, the Court thought it was appropriate to make the administration order, and duly appointed Mark Phillips and Julie Swan of PCR (London) LLP as joint administrators.



The Nektan case is significant for two reasons:

  1. The door is now firmly open for Gibraltar incorporated companies to be successfully restructured using the administration process in England.
  2. Modern ways of working and the increasing provision of services online mean that a physical address in a jurisdiction (or lack of) does not determine COMI; each case turns very much on its objective and ascertainable facts. The Courts will analyse the true COMI and legal advice should be taken at the start of a restructuring to ensure it takes place in the correct Member State.

The looming Brexit date of 31st January and finite transition period thereafter may well accelerate the resolution of any distressed situations….


About the author:
Robert Paterson is a Partner at Moon Beever LLP.

If you have any questions regarding the article or would like some advice, please contact Robert on  


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