The Representation of Bellzone Mining Plc, Antony Gardner-Hillman and Simon Brickles v and Article 155 of The Companies (Jersey) Law 1991
| Jurisdiction | Jersey |
| Court | Royal Court |
| Judge | J. A. Clyde-Smith,Jurats Crill,Thomas |
| Judgment Date | 31 January 2019 |
| Neutral Citation | [2019] JRC 9 |
| Date | 31 January 2019 |
[2019] JRC 9
Royal Court
(Samedi)
J. A. Clyde-Smith, Esq., Commissioner, and Jurats Crilland Thomas.
Advocate J. D. Garrood for the Representors.
Companies (Jersey) Law 1991.
Re Leveraged Income Fund Limited [2002] JLR 209
Representation of Poundworld [2009] JRC 042
Representation of Anthony Investments [Esplanade] Limited and Others [2013] JRC 217A
The Representation of Pringle and Others [2017] JRC 178
Horizon Investments (Jersey) Limited [2012] JRC 039
Companies —just and equitable winding up of Bellzone Mining Plc.
On 13 th December, 2018, the Court ordered the just and equitable winding up of Bellzone Mining Plc (“the Company”), pursuant to Article 155 of the Companies (Jersey) Law 1991 (“the Companies Law”). The application was brought by the Company and two of its directors, Mr Antony Gardner-Hillman and Mr Simon Brickles and supported by an affidavit by Mr Gardner-Hillman.
The Company is engaged in the exploitation of mining concessions in Guinea, initially iron ore, but more recently, ferronickel. The Company was well funded but was severely impacted by the collapse in world steel prices after the 2008 global financial crisis, and then was impacted a second time by the Ebola epidemic in Guinea in 2013–2015.
The Company is a public limited company, incorporated in Jersey, whose shares were publicly traded on the AIM Market until they were suspended at the request of the Company on 3 rd December, 2018.
4. The Company was dependent on capital provided by its largest shareholder, China Sonangol pte (S) Limited (“CS Singapore”) and later, Hudson Global Group Limited (“Hudson”), both being wholly owned subsidiaries of China Sonangol International Limited (“CS International”).
The principal debt is a partially secured debt owed to CS Singapore and Hudson, in the sum of US$18 million. There are relatively modest trade creditors of US$ 86k rising by a further US $23k on termination.
The Company's assets comprise shares in subsidiaries, ultimately being Bellzone Mining SA and Bellzone Holdings s.a.r.l., both incorporated in Guinea. They hold assets of varying degrees of liquidity, being:-
(i) Movable mining and associated equipment valued at US$500k and likely to depreciate further in 2019;
(ii) The site and buildings at Konta Port, a newly constructed port in Guinea; and
(iii) Mining licences for iron ore and ferronickel production granted by the government of Guinea.
The Company and its subsidiaries employ 108 staff.
The Company is irretrievably insolvent following CS Singapore and Hudson confirming that no further funding will be forthcoming. On 3 rd December, 2018, Mr Canice Chan, a legal adviser to CS International, said this in an e-mail to Mr Gardner-Hillman:-
““We have held meetings over the future of Bellzone, and felt that there is no justifiable case to keep funding Bellzone. If that means liquidation, so be it. We, as Bellzone's creditor, await the liquidator's notification, and see what we can salvage out of the liquidation process.”
The existing lending agreements and the position adopted by CS International mean that the Company cannot raise third party funding. In the circumstances the Company cannot now avoid an insolvent winding up or bankruptcy process.
Article 155 of the Companies Law provides that the Court may wind up a company if it is just and equitable to do so:
“Power for court to wind up
(1) A company, not being a company in respect of which a declaration has been made (and not recalled) under the Désastre Law, may be wound up by the court if the court is of the opinion that –
(a) It is just and equitable to do so; or
(b) It is expedient in the public interest to do so .
(2) …
(3) …
(4) If the court orders a company to be wound up under this Article it may –
(a) Appoint a liquidator;
(b) Direct the manner in which the winding up is to be conducted; and
(c) Make such orders as it sees fit to ensure that the winding up is conducted in an orderly manner..”
The Court has considered the breadth of this jurisdiction in the case of In the matter of Leveraged Income Fund Limited [2002] JLR 209 where Sir Michael Birt, then Deputy Bailiff, noted:-
““Article 155 is based upon a similar provision of the Companies Act of the United Kingdom. English authorities are therefore of assistance. Although the English Courts have developed certain categories of cases where the Court will exercise its power under the just and equitable jurisdiction the Court is not confined to such categories. The words ‘just and equitable’ are general words. As Palmer's Company Law Vol. 3 para 15.219 puts it:
““It has sometimes been suggested that there is an exhaustive list of situations...
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