Jersey: Cross-Border Insolvencies - Aiding A Foreign Court

Last Updated: 8 January 2010
Article by Appleby  

In the current climate, where once well-respected, confident and apparently prosperous businesses with interests in more than one country now face insolvency and even closure, requests for assistance from a foreign court in insolvency matters will likely become more frequent.

Need For Assistance

The need for assistance arises from the fact that Jersey is a separate jurisdiction and consequently any authority granted to a foreign insolvency office holder will not extend to Jersey without further order of the Jersey Court. Therefore, in order to, for example, access money held in Jersey bank accounts, or to arrange for Jersey-situate real property to be sold, the foreign office holder must apply for his appointment to be registered in the Royal Court in Jersey. Article 49 of the Bankruptcy (Désastre) (Jersey) Law 1990 ("the Law") gives a discretion to the Royal Court to assist the courts of certain prescribed territories in matters relating to the insolvency of a person or business to the extent it thinks fit. The prescribed territories are currently the UK, Guernsey, the Isle of Man, Australia and Finland, each of which has reciprocal arrangements in place with Jersey.

In addition, the Royal Court has provided assistance to foreign office holders from non-prescribed countries (for example, South Africa and Sweden) on the basis of comity and as an exercise of the court's inherent jurisdiction.

Letter Of Request

The foreign office holder must first apply to his local court for a letter of request specifying the precise assistance that he seeks from the foreign court. The letter of request will be closely scrutinised by the Viscount (the court official who deals with insolvency applications) to ensure that it is appropriate.

A request from a court of a relevant country is said in Article 49(2) to be "sufficient authority for the court to exercise, in relation to matters to which the request relates, any jurisdiction which it or the requesting court could exercise in relation to these matters if they otherwise fall within its jurisdiction".

Recent market conditions have shone the spotlight on the situation where an English company, with a subsidiary in Jersey, has gone into administration. Concerns have been raised that assets created within the island will be taken into the English administration and distributed to English creditors. However, these situations are not new. It is clear from the Law itself and previous decisions of the Royal Court dating back to 1899 that the principle of universality (in insolvency matters) has been accepted in Jersey law.


In certain applications involving OT Computers Limited (2002) the Royal Court, having been satisfied that it was in the best interests of the creditors, granted an initial application permitting the High Court to make an order under English legislation placing the Jersey company in administration in order that a potential sale could be achieved.

The court recognised that as the company carried on the bulk of its business in England (as "Tiny Computers"), that was its Centre of Main Interest. The court granted a subsequent application discharging the administration order and placing the company into voluntary liquidation, again in England, despite the fact that the company could have been placed in the Jersey bankruptcy procedure of a désastre, or put into liquidation pursuant to the Companies (Jersey) Law 1991. Again, the court acted in what it saw as the best interests of the creditors of the company; concurrent proceedings in Jersey would merely have increased the cost and not produced such a good outcome for the creditors.

In a second case: MGN Limited re Walkers Advertising Associates Limited en désastre (1992), the Royal Court permitted the continuation of a désastre of a Jersey company with assets and creditors in England and which was being concurrently wound up under English insolvency law, on terms agreed between the Viscount and the English liquidator of the company.

Recognition In Jersey

It was agreed that the liquidator be recognised by the Jersey court and that the Viscount would realise the Jersey situate assets of the Jersey company and, after payment of his costs and settlement of the Jersey preferential creditors, the Viscount would remit the balance to the liquidator in the concurrent English winding up. This was upon the Viscount being satisfied that the claims of all other creditors would be properly and equitably dealt with in the concurrent English winding up and the Viscount being permitted to lodge all filed claims in the English proceedings.

Competing Insolvency Procedures

The Royal Court recognises that competing insolvency procedures do not advance the interests of the creditors; rather they are likely to increase costs, cause confusion and lead to inequitable treatment of like classes of creditors. It is likely that where there are proceedings, for example, in both Jersey and the UK, the Jersey authorities would have to apply to the UK court for assistance and vice versa.

The court is specifically authorised in Article 49 to have regard "to the extent it considers appropriate to the provisions for the time being of any model law on cross-border insolvency prepared by the United Nations Commission on International Trade Law". The current model law is not specifically incorporated into Jersey law unlike the position in England and Wales. However, it is of relevance given the provisions of Article 49.

It was designed to assist states to equip their insolvency laws with a modern, harmonised and fair framework to address more effectively instances of cross-border insolvency, particularly where the insolvent debtor had assets in more than one state and where some of the creditors were not in the state in which the insolvency proceedings were taking place. It makes reference to the concept of a 'Centre of Main Interest' which is the place where the debtor principally operates and the Royal Court has acknowledged this concept as mentioned above.

This article first appeared in the spring 2009 issue of the Appleby Jersey's Resolution newsletter.

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.

In association with
Related Topics
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