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

Last Updated: 8 January 2014
Article by Bruce Lincoln and Tom Sowman


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 to the Jersey Court, the Receivers brought to its attention various changes made to the original Receivership Order. The terms of the Jersey Court's initial order in 2011 had made it clear that any further order of the English High Court and/or amendment of the Receivership Order which had the result of the Receivers being appointed as receivers of other assets not subject to the original order, would require a further order of the Jersey Court before it could be acted upon in Jersey.

On 17 May 2013 the Receivership Order had been amended by the English Court to state, amongst other things:

"The receivers shall also be appointed as managers of...Eurasia Logistics Limited... The said appointment shall, upon recognition of this order in the jurisdiction of the incorporation of the said companies, suspend the powers of the directors of those companies (such powers to be assumed by the receivers or persons acting on their instructions) save insofar as (i) any director thereof is authorised by the receivers... to exercise any of those powers..."

Position of the Receivers and the question before the Jersey Court

The Receivers argued, in putting forward the application for recognition by the Jersey Court of the amendments to the Receivership Order, that it was necessary to ensure the Receivers were able to act as managers of Eurasia so that two highly valuable properties in Russia could be secured. The Receivers pointed to the fact that the appointment of a manager in English law causes the directors' powers to cease, but the mere appointment of a receiver would not do so. The appointment of a manager would therefore allow more positive managerial steps to be taken in respect of Eurasia and its assets.

There were two questions before the Jersey Court as a result of this latest application:

a. Whether, in a domestic context, the Jersey Court has jurisdiction to appoint a manager who would assume the powers of the directors of the company concerned; and

b. What the effect of recognition of the appointment of managers for a company incorporated in Jersey would be in circumstances where there are currently Jersey resident directors of that company.

Approach of the Jersey Court

Appointment of a Manager

In respect of the first question, the Jersey Court found that it did have jurisdiction, applying the Jersey conflict of laws principles, to appoint a manager of a Jersey company, supplanting the powers of directors in an appropriate case. The Jersey Court further noted that, following the earlier decision in Ablyazov [2012] (1) JLR 44, the absence of a domestic equivalent is not a bar to the recognition of a foreign appointee. The Jersey Court's conclusion was based on the following:

a. The fact that the Jersey legislature has recognised certain circumstances when it is necessary for persons to be appointed to manage the affairs of a company and for the directors' powers to be removed;

b. An acceptance by the Jersey Court that it has an inherent jurisdiction to make an order for the appointment of a manager as part of the Court's armoury to ensure that its orders are complied with;

c. Given that the Jersey Court had already found that it had the power to recognise the appointment of a receiver (such receiver having been appointed initially in England), this power of appointment should similarly extend to recognise the appointment of a manager; and

d. Although not having been addressed on it, the Jersey Court stated that it may have jurisdiction to recognise the appointment of the receivers as managers pursuant to Article 9 of the Judgments (Reciprocal Enforcement) (Jersey) Law 1960.

Effect of Appointment of Manager

The Jersey Court concluded that it would be unthinkable for the Receivers to be appointed as managers over Eurasia and face the theoretical possibility of a running battle with the Directors of that company as to who had control of its affairs. The Jersey Court added that the necessary consequence of recognising the amendments to the Receivership Order which conferred managerial powers on the Receivers, was that the powers of the Directors should be suspended, and further ordered that managerial powers should only be assumed by the Receivers or other persons acting on the instructions of the Receivers. The Directors would only have authority to continue to act if so authorised by the Receivers in writing.

In a nutshell, if the Jersey Court was not prepared to suspend the powers of the Directors, it would not have been right to recognise the appointment of the Receivers as managers. The Royal Court found that this was an issue that went to discretion and not jurisdiction, and in all the circumstances the recognition of the Receivers as managers was the appropriate conservatory course.


In the absence of any defining domestic legislation in relation to: (i) the appointment of a manager in these particular circumstances; and (ii) the effect that appointment would have on the Directors, the Jersey Court has taken a practical approach based on common sense. Once the Jersey Court had gone through the steps to find that it had the power to appoint the Receivers as manager, it took the only practical decision it could in ordering that the powers of the Directors be suspended thereby allowing the managers to take proper control of Eurasia's affairs.

However, the Jersey Court does appear to have left open the door to a contrary finding in the future under different circumstances by emphasising that this question goes to discretion and not jurisdiction. That said, the Jersey Court will be naturally inclined to offer assistance to foreign courts whenever it can properly do so and where it is satisfied that there exists an appropriate connection between the parties involved and the foreign court.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Carey Olsen
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Carey Olsen
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions