Transcript Recent Developments in Jersey Case Law in the context of

Jersey | Guernsey | London | Dublin | Geneva
Recent Developments in Jersey Case Law
in the context of Commercial Fraud
“Lessons from the Frontline: An Offshore
Perspective”
David Cadin and Mark Taylor, Partners
Bedell Group, Jersey
Jersey | Guernsey | London | Dublin | Geneva
"Easy prey for the vultures in
Jersey ?"
Mark Taylor, Partner, Bedell Group, Jersey
The Players
1.
2.
3.
4.
5.
William Tacon
Montrow International Limited
Nautilus Trust Company
Kensington International Limited
Likouala SA
Company structure
Nautilus Trust company
Trustee of Jersey Charitable Trust which owns 100% shares in Montrow
Montrow
BVI company which owns 100% of Likouala
Likouala
A Congolese company which owns the Likouala oil field in Congo
Events unfold
■ Background
■ BVI Proceedings – March 2007- Liquidation/
Appointment of Liquidator
■ Jersey Proceedings – March 2007- Recognition
■ BVI Proceedings: The Tacon Report- Montrow failure
■ Jersey Proceedings: The stay and the affidavit
■ Jersey takes a slightly different approach: the affidavit
■ So why did the Royal Court do this?
■ BVI Proceedings: the end of the road for Mr Tacon
Court order
Royal Court Order 13 March 2007
2.
That William Richard Tacon as provisional liquidator be permitted within the jurisdiction of Jersey to take the
following steps:
(a) to ascertain the assets of Montrow and/or Likouala;
(b) to locate, protect, secure and take possession of all books, records, papers, statements and other documents
of Montrow and/or Likouala including accounting and statutory records, wherever located within Jersey and in
whatever form and to exercise such powers as may be necessary for the purpose of acquiring, retaining
possession or making copies thereof;
(c) to take over and manage the affairs of Montrow and/or Likouala and to carry on the business of Montrow
and/or Likouala to the extent necessary to preserve the assets of Montrow and/or Likouala and to protect the
interests of their investors;
(d) to appoint over such period as Mr Tacon consider necessary any person including a manager, administrator,
custodian or other functionary whose services may be required for the proper conduct of the affairs of
Montrow and/or Likouala;
(e) to pay out the assets of Montrow and/or Likouala or [sic] reasonable expenses or disbursements incurred in
the management and administration of Montrow and/or Likouala as the case may be and the execution of the
powers and duties of the provisional liquidator;
(f) to bring or defend any actions to the [sic] proceeding whether civil or criminal on behalf of Montrow and/or
Likouala and to give such instructions in connection therewith and to take such action as may be necessary;
(g) to examine by interview any director or officer of Montrow and/or Likouala in particular Mr Grimshaw and/or
any other employee of Nautilus who reasonably believed to have in his or her possession any property of
Montrow and/or Likouala or any information concerning the promotion, business dealings or affairs of
Montrow and/or Likouala.
Consequences
■ The Royal Court will exercise its discretion on similar
application.
■ However, Directors and Trustees who are being
ordered to disclose or answer questions must cast a
critical eye over the proceedings and the orders.
■ How are the documents going to be used?
■ Who is assisting the Liquidator and why?
■ Are the questions that are going to be asked of the
Directors relevant to the role of the Liquidator or are
they for another purpose?
The FG Hemisphere
Players
F G Hemisphere Associates LLC
The vulture fund and Plaintiff in the Jersey proceedings
Democratic Republic of Congo
Gecamines
A Congolese company which owns a mining operation in Congo and
shares in GTL
GTL
A Jersey company which as an agreement to purchase
cobalt and copper from Gecamines’ mine
What was it about?
■ Background
■ Jersey Proceedings
■ Role of GTL
■ Disclosure Orders
■ Type of Injunction: Arret entre Mains
■ Enforcement
Jersey | Guernsey | London | Dublin | Geneva
Lessons from the Frontline: An
Offshore Perspective
David Cadin, Partner, Bedell Group, Jersey
"During the appellant’s own evidence the Commissioner intervened with
substantive questions on no fewer than 273 occasions, 138 of them during
evidence in chief. Generally this was with a whole series of questions, taking up
in all just over 18% of the appellant’s eight and a half days in the witness box. So
Much for the bare statistics. Of altogether greater significance than the mere
number and length of these interruptions was, however, their character. For the
most part they amounted to cross examination, generally hostile. By his
questioning the Commissioner evinced not merely scepticism but sometimes
downright incredulity as to the defence being advanced. Regrettably too, on
occasion the questioning was variously sarcastic, mocking and patronising.“
Brown LJ, Michel v AG [2009] UKPC 40
(Jersey Evening Post)
In the Matter of Centurion Management
Services Limited [2009] JRC 227
“The gardener, the Notts County
fixer and the Lost Fortune
Man who worked for Russell King says he lost cash won in
compensation claim”
(Matt Scott, The Guardian, Thursday 1 October 2009)
■ Re Belgravia Financial Services Group Limited and
others [2008] JRC 161
■ Re Hickman [2009] JRC 40
■ Lawson v Belgravia Asset Management Limited (in
Liquidation) [2010] JRC 107
Trust
Trust
Trust
Holding Company
Wholly owned
companies
Companies with a
minority stake
In the Matter of the AE and other Settlements
[2010] JRC 85
"(2) The court may, if it thinks fit –
(a) make an order concerning…
(iii) a beneficiary or any person having a
connection with the trust…“
Article 51(2) of the Trusts (Jersey) Law 1984
■ In the matter of the CA Settlement [2002] JLR
312
■ In the matter of the Internine and Azali Trusts
[2006] JLR 195
"11/3 Authority to satisfy judgment debts by distraint
(1) When the Court grants a judgment condemning a
defendant to pay a sum of money, the judgment shall be
taken to authorize the plaintiff to cause the moveables of
the defendant to be distrained on unless the Court directs
otherwise.
(2) Moveables distrained on shall be applied towards the
satisfaction of the judgment debt and costs, or sold (either
at a public auction or at a valuation) and the proceeds of
sale so applied without the plaintiff’s being required to
obtain any further judgment."
Royal Court Rule 11/3
Contacts:
David Cadin
Bedell Cristin
T: +44(0)1534 814701
E: [email protected]
Mark Taylor
Bedell Cristin
T: +44(0)1534 814857
E: [email protected]