Portman Insurance Plc (Claimant)
| Jurisdiction | England & Wales |
| Judge | Mr Registrar Jones |
| Judgment Date | 23 November 2016 |
| Neutral Citation | [2016] EWHC 2994 (Ch) |
| Court | Chancery Division |
| Date | 23 November 2016 |
| Docket Number | Case No: CR-2016-7121 |
[2016] EWHC 2994 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT
In The Matter Of PORTMAN INSURANCE PLC AND PORTMAN SA
And in The Matter Of COUNCIL REGULATION (EC) NO. 2157/2001 OF 8 OCTOBER 2001 ON THE STATUTE FOR A EUROPEAN COMPANY (SE)
Royal Courts of Justice
Fetter Lane, London
Mr Registrar Jones
Case No: CR-2016-7121
Mr Martin Moore Q.C. (instructed by HOGAN LOVELLS) for the Claimant
Hearing dates: 17 November 2016
Judgment Approved
I have before me a Part 8 claim form for certification under Article 25(2) of Council Regulation (EC) No 2157/2001 on the Statute for a European Company (SE) ("the SE Regulation"), which came into effect on 8 October 2001, conclusively attesting to the completion of pre-merger acts and formalities.
The SE Regulation was designed to meet the problem that companies in different Member States who wish to merge had to choose a form of company governed by the particular law of one Member State. This was seen as a structural barrier to completion of the internal market and free trade. The solution is the creation of a Societas Europaea ("SE"). It is governed by the law of the Member State in which it has a registered office which will consist of: the SE Regulation; any other law implementing European measures applicable to an SE; and otherwise the law relating to public limited liability companies.
In brief summary, an SE will be formed by at least two companies originating in different Member States who will: (i) merge; (ii) establish a European holding company or (iii) establish a European subsidiary. Alternatively a public limited company may be converted into an SE provided it has had a subsidiary governed by the law of another Member State for at least 2 years (see Articles 2 and 17).
Formation must be scrutinised by the court. This has to occur before the SE can be registered in the Member State in which it has its registered office. Once registered, the merger cannot be declared null and void and any absence of scrutiny of its legality may be included among the grounds for winding up an SE.
Scrutiny is achieved through a two stage process. At this, first stage the court is concerned to ensure through scrutiny that procedural requirements are satisfied. The second stage under Article 26 of the SE Regulation will be heard by a High Court Judge who will consider completion of the merger and the formation of the SE including approval of the draft terms of merger, arrangements for employee involvement and any other issues that may arise, for example concerning its effect upon creditors.
This claim concerns a proposed merger by absorption between Portman Insurance Plc and Portman SA, its wholly owned subsidiary incorporated in France, and the simultaneous formation of an "SE". It is intended that the SE will relocate to France and merge with its parent, Colisee Re SA. These are all companies of the AXA Insurance Group and these steps are part of the rationalisation of its European operations.
Portman plc is a substantial insurance operation. The accounts to the year ended 31st December 2015 disclose shareholders' funds of £82,650,000 after a profit for the financial year of £5,478,000. Portman SA was incorporated on 20th May 2016 for the purpose of participating in the establishment of the SE. Its interim accounts as at 30th June 2016 show only cash of €37,000 and subscribed capital of the same amount.
Subject to one issue, I am satisfied from the evidence before me that a certificate should be issued conclusively attesting to the completion of pre-merger acts and formalities.
The issue is whether certification should be refused because Portman SA is a non-trading, dormant company and in effect a shell. The issue is raised by Mr Moore QC out of caution and pursuant to the duty counsel owes to the court, whilst at the same time strongly submitting that the issue has no merit generally or on the facts of this case.
In my judgment he is right to raise it and by doing so upholds the traditions of the Bar. It is an issue identified from the decision of Mr Justice Birss in Re Easynet Global Services...
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