The High Court has stayed Danske Bank A/S trading as National Irish Bank’s bankruptcy proceedings against Niall McFadden while the High Court of England and Wales determines his centre of main interests (COMI).
In a judgment delivered on 27 January 2012, Ms Justice Dunne said the immediate question was whether the Irish court should decide COMI or defer to the English court. The Irish bankruptcy petition had been presented on 1 June 2011. A previous judgment had addressed Mr McFadden’s challenge to that petition but left the COMI question unresolved.
The respondent argued that the English court should decide the issue because it had been first seised. The petitioner opposed deferral, while accepting that principles from the Brussels Regulation could help resolve competing claims by courts in different jurisdictions. The parties disputed whether the approach in Article 27 or Article 28 was the closer analogy.
The English proceedings had been brought by Anglo Irish Bank. Its petition was issued on 17 February 2011, and the English court had set the COMI issue for directions. Danske Bank had intervened in those proceedings to contest COMI. Although the parties to the English and Irish proceedings were not identical, Justice Dunne found that the same COMI issue arose in both. She considered Article 28, concerning related actions, the more relevant comparison and concluded that the Irish court had discretion to stay its proceedings.
Justice Dunne found that the High Court of England and Wales was first seised of the COMI issue. She said she was not convinced that describing Mr McFadden’s conduct as forum shopping was fair, noting that he had initiated proceedings in neither jurisdiction. She concluded that, unless it was clear he was preventing the English court from dealing with the matter, the Irish court should not determine COMI first.
The court stayed the Irish proceedings pending the English court’s decision on COMI. Justice Dunne said Danske Bank could return to the Irish court if Mr McFadden’s conduct created difficulty in having the English proceedings determined. The court did not decide COMI or adjudicate Mr McFadden bankrupt in this judgment; Justice Dunne said she would hear the parties further on the possibility of the matter returning to the Irish court.