The high profile insolvency of Jersey company Orb a.r.l (Orb) and its sole shareholder Dr Gail Cochrane (Dr Cochrane), a local GP, has firmly placed Jersey's insolvency regime in the spotlight.  The matter commenced in late 2016 and has continued to build throughout the course of 2017 and 2018, with related proceedings in the BVI and before the High Court in England and interested parties ranging from the Serious Fraud Office to law firms.

As a jurisdiction, Jersey is at the heart of cross-border insolvency and restructuring. Inevitably, situations arise where insolvent companies' assets or possibly important evidence are located overseas or an overseas liquidation regime would be best for creditors. Conversely there will be situations where a foreign insolvency process will require steps to be taken in Jersey.

The recognition of the powers of an English trustee in bankruptcy in Guernsey is generally pursued either by way of a letter of request issued by the foreign court pursuant to section 426 of the Insolvency Act 1986 (Insolvency Act) or by way of an application via the common or customary law.

It has been common practice in recent years for the English Courts to make administration orders in respect of Jersey companies with English situs assets, based upon letters of request from the Royal Court of Jersey issued pursuant to section 426 of the UK Insolvency Act 1986.  However, a recent case in the English High Court has challenged the basis upon which these administration orders have historically been made. 

Background

The facts:

An application had been made by Bank of Scotland Plc and the Governor and Company of the Bank of Ireland (the Applicants) for a letter of request to be sent by the Royal Court of Jersey to the High Court of England and Wales in respect of four Jersey companies which were ultimate beneficial owners of English real estate.  

There has been a considerable amount of interest from clients recently on putting Jersey companies holding UK real property and other assets into English administration. Where a Jersey company and its creditors intend to rescue the company as a going concern, or English administration would achieve a better realisation for creditors than a désastre or a winding up, it may be advantageous to commence English administration.

In the matter of the representation of Anglo Irish Asset Finance [2010] JRC087

This is the latest decision of the Royal Court in relation to an application by a UK creditor (a bank) for a letter of request to be issued to the English High Court requesting that an administration order be made in respect of a Jersey company.

Introduction

First published in the International Arbitration 1/3LY, Issue 7

Insolvency law contains summary processes for dealing with claims and protections against certain proceedings commencing or continuing. There has been some debate, and recent case law, concerning the primacy of these rules over agreements to arbitrate. In the following article, we look at what the current position is under English law and beyond.

General position under English law

This Court of Appeal decision in (1)TopBrandsLtd(2) LemioneServicesLtdv (1) Gagen Dulari Sharma (2) Barry John Ward (as former liquidators of Mama Milla Ltd) (2015) is noteworthy as it underlines that the “illegality defence” is still in a state of flux and in need of clarification by the Supreme Court.