The Third Representation of David Standish, John Milsom; and Jeremy Outen, Receivrs of the Assets of Mr Mukhtar Ablyazov

JurisdictionJersey
CourtRoyal Court
JudgeBailiff
Judgment Date04 October 2013
Neutral Citation[2013] JRC 195
Date04 October 2013

[2013] JRC 195

ROYAL COURT

(Samedi)

Before:

W. J. Bailhache, Q.C., Deputy Bailiff, and Jurats Le Cornu and Blampied.

In The Matter of the Third Representation of David Standish, John Milsom
And Jeremy Outen, Receivrs of the Assets of Mr Mukhtar Ablyazov.

Mrs S. Sharpe., Crown Advocate.

Advocate A. D. Hoy for the Defendant.

Authorities

In the matter of the assets of Ablyazov [2012] (1) JLR 44.

David Standish, John Milsom and Jeremy Outen -v- Eurasia Logistics Limited and Nautilus Trust Company Limited [2012] JRC 072.

Mubarik -v- Mubarak [2008] JLR 430.

Companies (Jersey) Law 1991.

Solvalub Limited -v- Match Investments Limited [1996] JLR 361.

Rumasa SA -v- W&H Trademarks (Jersey) Limited [1985–86] JLR 308.

Financial Services (Jersey) Law 1998.

Bankruptcy (Désastre)(Jersey) Law 1990.

Hart -v- Emelkirk [1983] 1 WLR 1289.

Judgments (Reciprocal Enforcement)(Jersey) Law 1960.

Senior Courts Act 1981.

R -v- F Howe & Son (Engineers) Ltd [1999] 2 Cr. App. R. (S) 37.

Contract — reasons as to the confirmation that the appointment and powers of the representors be recognised as managers of Eurasia.

Bailiff

THE DEPUTY

1

On 28 th May, 2013, the representors applied for further relief in connection with the Court's Order on 30 th November, 2011, when the Court granted the application that the receivership order of the English High Court, by which the representors were appointed as receivers of the assets of Mr Mukhtar Ablyazov (“Mr Ablyazov”), was recognised. The reasons for the Court's decision in November 2011 are reported at In the matter of the assets of Ablyazov [2012] (1) JLR 44. The Court concluded that the Royal Court has an inherent jurisdiction to recognise the appointment of receivers appointed by a foreign court 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. In the instant case, the Court found that Mr Ablyazov was resident in England and that that was a sufficient connection for the purposes of the application to have the appointment of the representors as receivers recognised in the Royal Court.

2

When that application was made, the receivers requested a 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 comply with a request from the receivers would be in contempt of Court. The Court however did not think it was necessary or proportionate to give the receivers that power, nor did the Court think that it was appropriate that a person refusing to comply with a request received from the receivers should be treated as being in contempt of Court. The orders made were that the relevant parts of the receivership order should not be recognised or enforceable in Jersey without further specific order, and that there was liberty to apply such that the Court could decide whether persons in Jersey holding confidential information should be forced to disclose that information, or whether there were valid grounds for them not doing so. Subject to those provisos, the receivership order was recognised. In particular (in other respects) the Court expressly recognised the appointment and powers of the receivers and authorised and permitted them to use those powers in Jersey, including:–

The Royal Court subsequently ruled that “that order of the Royal Court 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 at paragraph 18(iv).

  • (i) taking steps in Jersey to recover and preserve Mr Ablyazov's property as, defined in the receivership order, and to exercise powers vested in them by the receivership order;

  • (ii) identifying and locating such property in Jersey and making enquiries and requests for information, documents and other materials relating to such property in the possession or control in whatever capacity of any person within Jersey.

3

By the third representation, the representors brought to the attention of the Court various changes in the original receivership order. The terms of the Court's Act of 30 th November, 2011, make it plain 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 assets of which they were not presently receivers should not be recognised without any further order of the Court.

4

On 17 th May, 2013, paragraph 1A of the receivership order was amended to state, insofar as the representors allege is material:–

“1A The receivers shall also be appointed as managers of … (d) Dayen Environmental Limited (listed in Row 201 of Schedule 3A hereto), Nupto Limited (listed in Row 258 of Schedule 3B hereto), Jollafield Holdings Limited (listed in Row 198 of Schedule 3B hereto) and Eurasia Logistics Limited (listed in Row 6 of Schedule 3C hereto). The said appointment shall, upon recognition of this order in the jurisdiction of 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 in writing to exercise any of those powers…

5D The claimant is permitted, pursuant to CPR Rule 3.2(1)(a) to delay service of the May 2013 application, this order, supporting evidence and associated documentation on Mr Ablyazov (by service on his solicitors) until 4.00 p.m. on 7th June, 2013.”

5

Dayen Environmental Limited, Nupto Limited and Jollafield Holdings Limited, which are incorporated in other jurisdictions, are subsidiaries are Eurasia Logistics Limited (“Eurasia”). Eurasia is a company incorporated in Jersey.

6

The application by the representors was therefore to have confirmed in this Court the amendments to the receivership order made in the English High Court on 17 th May, 2013, such that the appointment and powers of the representors as managers of Eurasia be recognised.

7

When this matter was heard on 30 th May, 2013, the Court sat in private but it was noted that the judgment and order, when made, would be in public.

8

At the end of the hearing on 30 th May, judgment was reserved. Given the urgency of the application the decision was notified to the representors by Act of Court dated 31 st May, 2013, substantially granting the prayer in the representation, with reasons to be delivered later. This judgment contains those reasons.

9

Advocate Dessain informed the Court that Eurasia is the only Jersey company within this structure, and in putting forward the application for recognition of the amendments to the English Court's Order of 17 th May, he submitted that it was necessary to ensure the receivers were treated as managers of the company so that two highly valuable properties in Russia could be secured. He submitted 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 therefore allows positive managerial steps to be taken as opposed to conservatory actions.

10

He submitted that the appointment of a receiver and manager is part of the Court's armoury to ensure that its orders are respected. He went on to submit that in the case of Mubarik -v- Mubarak [2008] JLR 430 the Court appointed a receiver over a trust in the exercise of its inherent supervisory jurisdiction. It would, he said, be inconvenient for the receivers, who were a type of trustee, to come to Court every time the directors were about to do something the receivers thought ought not to be done, and it was better to recognise the powers of the manager in a generic way. The application was made on the basis that the Court was asked to exercise its inherent jurisdiction. It was not an application pursuant to the Companies (Jersey) Law 1991 (“the Companies Law”), but an all-encompassing power which the Court had. After all, the management of a company could be affected by an injunction granted by the Court, even one in support of proceedings in a foreign jurisdiction — see Solvalub Limited -v- Match Investments Limited [1996] JLR 361, so, in principle, why should the Court not have a power to affect management in a more general way?

11

It was contended that it was not necessary to have a domestic power to appoint receivers and managers because the Court had an inherent jurisdiction to give effect to an English Court order on the application of conflict of laws principles. It was said that if the Island legislation contained provisions which prohibited the appointment of managers, the Court would clearly have to apply them. However there is no such provision, and therefore as a matter of discretion and...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT