Insolvency office-holders appointed under a law or by a court outside Jersey will have no authority, as a matter of Jersey law, to act in Jersey. It is normal therefore for an application to be made for recognition of their appointment and authority to exercise powers in Jersey, for example where there are assets, documents or information in Jersey.

In every case, this should be done by way of a letter of request from the foreign court administering the insolvency and the applicant must consult with the Jersey Viscount's Department before the application in Jersey is issued to ensure the order sought is drawn in suitable terms.

In the absence of such recognition a foreign insolvency practitioner will, as a matter of Jersey law, and regardless of the position under the law of his appointment, be at risk of exceeding his authority and be severely hampered in carrying out his or her duties. In any event, Jersey recipients of any requests for cooperation will usually require the office-holder to obtain recognition and authority from the Jersey Court. If the office-holder only seeks recognition at a later stage, his unauthorised acts may affect whether and to what extent the Royal Court exercises its discretion.

Statutory recognition

Insolvency office-holders from certain prescribed countries can seek recognition in Jersey under Article 49 of the Bankruptcy (Désastre) (Jersey) Law 1990. These countries are the United Kingdom, Guernsey, the Isle of Man, Finland and Australia.

The Jersey court may, to the extent it thinks fit, assist the requesting court. It may exercise any jurisdiction which it or the requesting court could exercise in relation to these matters. The Jersey court must have regard to private international law, and may have regard to the UNCITRAL Model Law.

In our experience, the application can be made at short notice and where appropriate in private and ex parte. Some of the orders which can be sought are the registration of the appointment of a foreign office-holder, the examination of witnesses such as directors of Jersey incorporated companies, administrators of trust companies or bank officials. There may be a request for the production of documents. The Court has exercised its discretionary power to impose gagging orders on witnesses and injunctions over bank accounts. The applicant may be expected to provide an undertaking to pay the reasonable costs of third party witnesses and to provide an undertaking in damages if an injunction is granted. Although the implied undertaking not to use the documents obtained other than in the instant proceedings without leave of the Court is applicable, the international nature of insolvency investigations means that the Court tends to permit the documents to be used in other specified jurisdictions and for specified purposes from the outset.

Common law recognition

The Jersey court may also assist insolvency office-holders when requested to do so by the courts of non-prescribed countries, on the basis of comity and reciprocity.

The scope of the relief available to such office-holders has now been put in some doubt by the Privy Council's decision in Singularis v PWC [2014] UKPC 36, on appeal from Bermuda, which is persuasive but not binding in Jersey.

Parallel proceedings

Parallel winding up proceedings involving Jersey companies are rare but not unheard of. As recently as April 2017, the Royal Court of Jersey approved an application by liquidators appointed in Scotland over a Jersey company to commence a parallel winding up in Jersey on just and equitable grounds (see Re the E Trust [2017]JRC060). However, much of the case law in Jersey is directed at deciding whether Jersey or another forum (usually England) is the best forum for one, single insolvency process (with cross-border assistance given as necessary), thus avoiding the costs and complexity of parallel proceedings.

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.