Appointment By The Jersey Court Of Foreign Receivers As Managers Of A Jersey Company

Introduction

This briefing concerns the latest judgment in the Ablyazov matter following a third application brought by English court appointed Receivers, in which the Jersey Royal Court held that it had jurisdiction to appoint the Receivers (whose appointment had been recognised by the Jersey Court in an earlier judgment) as managers of a Jersey company. Furthermore, upon their appointment the powers of the Jersey resident directors of that company were suspended, thereby allowing the Receivers to properly gain control of the company's affairs without interference from the directors.

Background Facts

In August 2009 proceedings were commenced against Mr Ablyazov in the English High Court. The proceedings were brought by JSC BTA Bank which is incorporated in Kazakhstan. The claim was in excess of US$1.8bn, but could eventually exceed US$4bn. On 6 August 2009 an order was made in the High Court (the Receivership Order) appointing the Receivers in respect of certain assets of Mr Ablyazov. The Receivership Order was later extended on two occasions.

One of the companies covered by the extension of the receivership order was Eurasia Logistics Limited (Eurasia), a Jersey company with Jersey resident directors (the Directors).

In 2011 the Receivers sought the Jersey Court's recognition of their appointment as receivers, which was duly granted (see In the Matter of the Assets of Ablyazov [2012] (1) JLR 44). In that judgment, the Jersey Court concluded that it had an inherent jurisdiction to recognise foreign court appointed receivers provided that there is a sufficient connection between the defendant, whose assets have been made the subject of a receivership order, and the jurisdiction in which the order has been made. However, the Jersey Court refused to grant the Receivers' request to be given the power to require any person in Jersey to attend upon them to provide information about the assets of Mr Ablyazov, and that any person who refused to do so would be in contempt of court, on the basis that such an order would neither be necessary nor appropriate in the particular circumstances.

Upon a subsequent application, the Jersey Court ruled that "the order of the Royal Court (of 30 November 2011) entitles the receivers to demand information about the assets subject to the receivership order" (see David Standish, John Milsom and Jeremy Outen v Eurasia Logistics Limited and Nautilus Trust Company Limited [2012] JRC 072).

In their latest application...