High Court calls into question the availability of administration for Jersey and other offshore companies
The High Court has called into question the availability of administration for Jersey and other offshore companies which own English real estate, in a decision relevant to secured creditors when considering their enforcement options. Mann J in HSBC Bank v Tambrook Jersey Ltd  EWHC 866 (Ch) refused to appoint an administrator in respect of a Jersey company using the statutory assistance mechanism contained in section 426 Insolvency Act 1986. He concluded that the English court cannot “assist” a foreign insolvency court unless that court is exercising its functions as an insolvency court (which assumes that there is an existing or planned insolvency proceeding in that foreign jurisdiction).
A request to commence English insolvency proceedings in lieu of Jersey insolvency proceedings fell outside the scope of section 426, as this would avoid the need for the Jersey court to exercise its functions, rather than assist it in the exercise of those functions. His decision significantly limits the insolvency options available to the stakeholders of Jersey and other foreign companies whose centre of main interests is not in England and where it is not otherwise possible to shift their COMI. When this decision is considered against the background of the approach taken by the Supreme Court in Rubin v Eurofinance SA  UKSC 46, it is difficult to avoid the conclusion that English courts are adopting an increasingly narrow view as to what cross-border insolvency assistance they can properly give.
For further background to the decision and its implications, please see our client briefing.