Jersey: Putting Jersey Companies Into English Administration – The Back Door Is Left Shut

Last Updated: 21 December 2016
Article by Ogier

Most Read Contributor in Jersey, March 2019

Successful applications to the Royal Court of Jersey for a letter of request seeking assistance from the High Court of England to place a Jersey registered company into administration in England are not uncommon.  However, in Harbour Fund II LLP v ORB a.r.l and Litigation Capital Fundingen désastre1 and the company was not being rescued as a going concern.  The Jersey company had no obvious connection to England.  The decision confirms that applications for letters of request to achieve insolvency "passporting" into the UK will be carefully and fully analysed by the Jersey Court.


Harbour Fund II LLP provided litigation funding to ORB (a Jersey registered company) in respect of English proceedings under the terms of a funding agreement.  The litigation landscape in which ORB was involved was complex, with various parties involved, including in ancillary proceedings in the Isle of Man, the settlement of which was linked to the English proceedings, as well as injunctive proceedings brought after the English proceedings were dismissed; in addition production orders were issued seeking information concerning the sale of ORB's assets.  Harbour had made formal demand for sums it claimed to be due from ORB pursuant to its funding agreement, totalling close to £33m (£5m of which related to funded legal costs).  Harbour informed ORB that failing settlement of Harbour's claim, an application would be made for the appointment of an administrator.  Harbour's funding was secured by a debenture over ORB's assets.


For the English Court to entertain an application to place a foreign company into administration under section 426 of the UK Insolvency Act 1986 on the request of a foreign court (rather than administration being commenced out of Court on COMI grounds), that foreign court must be furthering the interests of an insolvent company and its creditors.  In considering whether to exercise its discretion to issue a letter of request on application by a creditor, therefore, the Royal Court has to be satisfied that the subject company is cash-flow insolvent and that the creditor has a liquidated claim (i.e. a certain debt to which there is no reasonably arguable defence). 

The Royal Court was satisfied on the evidence before it that Harbour had a liquidated claim (at least in respect of the £5m in respect of funded costs, on the basis that it seemed indisputable that there had been a recovery for the purposes of the funding agreement) and that ORB was cash-flow insolvent on the basis that it had not met the demand for payment by Harbour and there was no reliable evidence that it had retained any assets or if it did, where they were located.  It appeared that the majority of the assets which could potentially be classified as ORB's were located outside England.  It was not clear therefore that ORB had a substantial connection with England.

It was noted that whoever was appointed to administer the affairs of ORB would have to undertake certain actions to protect the interests of creditors2 and that an administrator would not be any better placed to undertake those actions than the Viscount in Jersey.  The only power not available to the Viscount (which would be available to an administrator) was to rescue ORB as a going concern; however, rescuing ORB was not envisaged.

Further, were the letter to be granted, and an English administrator appointed, there would be an immediate need for the High Court to issue a letter of request to the Royal Court of Jersey to recognise the appointment, and for a number of orders to be made in Jersey.  The Court felt a sense of unease at enabling a process by which an English administrator, with whose jurisdiction no substantial connection could be established, could exercise powers in Jersey not available under Jersey law which was termed3 as "administration by the back door".

The Court concluded that there was no particular advantage in using the English regime since on a declaration en désastre, all the property of ORB would vest in the Viscount who had extensive powers and could seek recognition of her status in England and the assistance of the High Court as necessary in that jurisdiction.


This was an interesting decision since letters of request applications that comply with the basic requirements (no issue as to the insolvency of the company, the liquidated claim of the creditor is clear, the assets of the company are in the UK and an opinion of UK counsel that the application for administration would likely succeed is presented to the Jersey Court) are typically granted. The principal stumbling block for Harbour was the lack of evidence connecting ORB with England and the fact that ORB was not being rescued as a going concern.  As such, there appeared to be no cogent reason why the Jersey process of en desastre could not be used for this Jersey registered company.

Although each case is likely to be considered on its facts, where a company is not being rescued as a going concern and a substantial connection to England4 cannot be shown, and particularly where there is no good reason not to follow available Jersey procedures, the back door to administration is likely to remain well and truly closed.


1. Effectively, bankruptcy

2. i.e. investigate the asset position and seek recovery through various methods

3. by the Viscount

4. or whichever country the letter of request is to be made to the courts of

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
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please 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