Irish High Court recognises Northern Irish insolvency proceedings, applying common law principles under its inherent jurisdiction.
Re Mercer Agencies Limited (In Administration) and an Application for Recognition and Orders in Aid of Foreign Insolvency Proceedings [2025] IEHC 26.
This significant post–Brexit decision concerned an application by the joint administrators of Mercer Agencies Limited (In Administration) (Company) for orders granting recognition to Northern Irish administration proceedings under the Insolvency (Northern Ireland) Order 1989 (1989 Order).
The decision is notable because since Brexit, the automatic EU cross-border recognition framework under the Recast EU Insolvency Regulation (Regulation 848/2015) (EIR Recast) no longer applies to the appointment of administrators under the 1989 Order.
Consequently, the Irish High Court (Court) was asked to consider its inherent jurisdiction as a matter of common law to recognise the Northern Irish administration insolvency proceedings.
EIR Recast
The EIR Recast provides for the recognition of insolvency proceedings and related orders across the EU (except Denmark). For the UK, this included administration and related orders. Until the UK left the EU, the EIR Recast provided for the appointment and powers of administrators under the 1989 Order to be recognised and enforced in Ireland (and other EU states) without further formality.
The position outside the EIR Recast
Where the EIR Recast does not apply, Ireland approaches issues of recognition of foreign insolvency proceedings by considering the court's common law jurisdiction, questions of equivalence of the insolvency processes, and whether there is a legitimate purpose for recognition. This means that the state in which recognition is sought has similar insolvency processes to the original state, and the original state would be presumed to reciprocate the recognition of Irish insolvency processes.
Background to the application
The Company was UK-incorporated, with its principal business in Northern Ireland. It entered administration on 28 November 2024 under the 1989 Order. The administrators instituted the recognition proceedings so that they could pursue a significant debt owed to the Company by an Irish-based company and, if necessary, bring legal proceedings before the Irish courts.
The Judgment
Because of the non-applicability of the EIR Recast, the Court had to consider firstly whether it had jurisdiction to recognise the administrators appointed under the 1989 Order and, if it did, whether it was an appropriate case to make the orders sought.
- Jurisdiction – common law and statutory powers
The Court relied on Re Mount Capital Fund Limited (in Liquidation) and Another [2012] IEHC 97, in which Laffoy J previously found that the Court had an inherent jurisdiction to recognise insolvency proceedings commenced outside the EU. However, Laffoy J also held that the court must be satisfied that recognition is being sought for a legitimate purpose.
The Court also referred to section 1417 of the Companies Act 2014 (2014 Act), which provides that any order made by a recognised foreign court for or during the winding up of a company can be enforced by the Court as if it were an order made by the Court itself. However, as no ministerial order recognising any country (as required under the section) has been made yet, and the section only applies to orders of foreign courts made for or during a winding up, it was not applicable in the instant case that concerned administration proceedings.
Regarding equivalence as between administration and the Irish corporate insolvency regime under the 2014 Act, the Court found that provisions in the 1989 Order, which outlined the asset realisation function of the joint administrators, along with their power to bring or defend legal proceedings in the Company's name, aligned with provisions around liquidations contained in Part 11 of the 2014 Act. In those circumstances, the Court was satisfied that sufficient equivalence between the two insolvency regimes warranted the making of orders of recognition sought.
- Legitimate purpose
Regarding legitimate purpose, the Court was satisfied that the purpose of the application, being to enable the joint administrators to fulfil their statutory duties of realising assets for the benefit of the Company's creditors, was a legitimate purpose, and had direct equivalence with the functions of a liquidator under Part 11 of the 2014 Act.
Having regard to its findings on jurisdiction and legitimate purpose, the Court was satisfied that it was appropriate to make orders in aid of the administration under the 1989 Order, including an order recognising the administration of the Company, the appointment of the joint administrators, their power to bring legal proceedings before the Irish courts and collect and gather the Company's assets.
Impact
The decision is important for those dealing with cross-border insolvency, confirming the application of common law principles in recognising and enforcing foreign insolvency orders in Ireland. The decision reinforces the approach of the Irish courts, that they will generally recognise foreign insolvency proceedings, subject to the principles of equivalence and legitimate purpose.
The decision is a significant precedent, strengthening confidence in the ability of the Irish courts to deal with applications concerning UK insolvency proceedings, which are no longer within the scope of EIR Recast.
Contributed by Gail Nohilly, Lorraine Kelly
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