On appeal from: [2013] EWCA Civ 643

Olympic Airlines SA was wound up by a court in Athens on 2 October 2009, with a deficit to the company pension scheme of £16m. Olympic Airlines SA was unlikely to be in a position to make good the deficit, however members of the pension scheme were eligible for compensation, payable from the date on which a “qualifying insolvency event” occurred. There were two possible dates for this: 20 July 2010, when the trustees of the pension scheme presented a winding-up petition in England, and 2 October 2014, the fifth anniversary of the start of the main liquidation proceedings in Greece. The trustees of the pension scheme preferred compensation to be deemed payable from 20 July 2010.

The question for the court was whether Olympic Airlines SA had an “establishment” in the UK on 20 July 2010 which entitled the English court to make a winding up order under EU Regulation 1346/2000 on Insolvency Proceedings, so that it could be said that a qualifying insolvency event took place on that date.

The judge at first instance held that Olympic Airlines SA’s activities by 20 July 2010 constituted “non-transitory economic activities” so that Olympic Airlines SA had an “establishment” in the UK entitling the court to make the winding-up order. The Court of Appeal disagreed and the trustees appealed.

The Supreme Court dismissed the appeal. Lord Sumption held that the Regulation’s definition of “establishment”, which must be read as a whole, envisages a fixed place of business and business activity carried on there consisting in dealings with third parties, and not merely acts of internal administration. Olympic Airlines SA was not carrying on business activity at its head office on 20 July 2010 and so it did not have an “establishment” in the UK at that point.

For judgment, please download: [2015] UKSC 27

For Court’s press summary, please download: Court’s Press Summary

For a non-PDF version of the judgment, please visit: BAILII