The Pauline Action is a legal mechanism that allows creditors to apply to the Royal Court of Jersey to set aside transactions undertaken by a debtor to defraud or otherwise prejudice them.

Emirates NBD Bank PJSC v Almakhawi and Others [2024] JRC 256 is the most recent case from the Royal Court to affirm that the Pauline Action, which has its origins in Roman law, remains an effective debt recovery tool for creditors in Jersey.

Purpose of the Pauline Action

In a judgment issued yesterday (Francis v Gross [2024] NZCA 528), the Court of Appeal unanimously overturned the controversial High Court decision in Francis v Gross [2023] NZHC 1107 and held that purchasers of partly constructed modular buildings (pods) did not have equitable liens (at all, and especially not in priority to secured creditors) over those pods.

The Privy Council has recently upheld a BVI judgment refusing stay of a winding up petition in favour of arbitration. The recent Sian Participation Corp (In Liquidation) v Halimeda International Ltd¹ Privy Council decision provides much needed clarity on the exercise of the Court’s discretion to wind up a company where the debt is not disputed on genuine and substantial grounds and is subject to an arbitration clause.

Domestic Procedures

Russell Crumpler & Christopher Farmer (as Joint Liquidators of Three Arrows Capital Ltd (in Liquidation)) v Three Arrows Capital Ltd (in Liquidation) and BVIHC (Com) 2022/0119 (unreported 26 July 2023)

In the recent decision of Greig William Alexander Mitchell & Ors v Sheikh Mohamed Bin Issa Al Jaber & Ors[2023] EWHC 364 (Ch), the English High Court was required to consider the question of what duties (if any) a director owes to a BVI company post-liquidation; in particular in light of section 175(1)(b) of the BVI Insolvency Act 2003 (hereinafter, the Act) which expressly provides that upon liquidation “the directors and other officers of the company remain in office, but they cease to have any powers, functions or duties

Inflationary pressures and increasing interest rates are expected to continue to have a negative impact on the global economy during 2023. In this article we consider restructuring options under BVI law available to companies in or approaching financial difficulties, when a BVI company will be considered to be insolvent, the duties of directors of financially distressed or insolvent BVI companies and practical steps and considerations for directors where a BVI company may be approaching insolvency.

Restructuring Options and Creditor Arrangements

On 5 October 2022 the UK Supreme Court (UKSC) handed down its “momentous” decision in BTI 2014 LLC v Sequana SA and others¹. The case addresses issues of ‘‘considerable practical importance to the management of companies’’, in particular directors’ duties during insolvency or the onset of insolvency.

AML changes for court-appointed liquidators

Important changes for court-appointed liquidators to the regulations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (Act) will come into force on 9 July 2021.  These changes provide that, for a court-appointed liquidator:

The High Court has released its judgment in Re Halifax NZ Limited (In liq) [2021] NZHC 113, involving a unique contemporaneous sitting of the High Court of New Zealand and Federal Court of Australia.