JTC (Jersey) Limited v Fanning and Anor [2023] JRC 198 (26 October 2023)

judgment the COMMISSIONER: 1. The Plaintiff applied to this Court for confirmation of an interim arrêt entre mains granted by the Bailiff on 10 August 2022.

2. The factual and procedural background was set out in a judgment given by the Master of the Royal Court on 17 July 2023 and reported at JTC (Jersey) Limited v Fanning and Anor [2023] JRC 122 , in respect of an application for summary judgment against the First and Second Defendants.

3. In brief, the Plaintiff is a corporate services provider which agreed to provide administration services to the Second Defendant on the basis of terms which were set out in a letter of engagement dated 29 July 2020 and countersigned by the First Defendant on 30 July 2020, and in accordance with its standard terms and conditions. In the Order of Justice signed by the Bailiff the Plaintiff sought judgment in the sum of £62,116.07 and interest, in respect of unpaid invoices, together with an order confirming the arrêt entre mains . The interim arrêt was granted in respect of all rights, assets and interests held by the Second Defendant for and/or for the benefit of the First Defendant. Those assets comprised shares held by the Second Defendant as nominee for the First Defendant in a company incorporated in the Republic of Ireland known as San Leon Energy Plc.

4. On 17 July 2023, the Master granted summary judgment against the First and Second Defendants in the sum of £129,891.87 and directed that the Plaintiff bring the matter before this Court to deal with the application to confirm the arrêt entre mains . He further directed that the costs of the application were to be paid by the First Defendant to the Plaintiff, to be taxed on a standard basis if not agreed. The law 5. In Novatrust Limited v Watson [2020] JRC 224 , the Royal Court (T J Le Cocq, Bailiff), having considered one of the leading Jersey authorities on the remedy of arrêt entre mains , namely FG Hemisphere Associates LLC v Democratic Republic of Congo and La Generale des Carrieres et des Mines [2010] JLR 524 , summarised the principal features of the arrêt entre mains in the following terms: "i) The effect of the arrêt entre mains is to seize assets. ii) It affords to a judgment creditor a proprietary interest in and security over the assets in question for the discharge of the debt. iii) The nature and extent of the debt and, indeed, what is seized, is determined at the time of the arrest and any application to confirm made subsequently is really an application to determine that the interim arrest was appropriately granted. As the effect of the arrêt entre mains is to discharge the third party from liability to the former creditor, this Court will generally only grant

an arrêt entre mains where it has jurisdiction to order the discharge of the debt due from the third party to the judgment creditor. This would require that the debt be situated in Jersey." 6. In the present case, the interim arrêt restrained the First Defendant from " removing from the Island of Jersey or in any way disposing of or dealing with or diminishing the value of his shareholding in San Leon Energy plc by any action in or effective in the Island of Jersey, up to the value of £100,000, being a reasonable estimate of the total of principal, interest and costs". A similar order was made against the Second Defendant as Party Cited in respect of the same shares.

7. Given that the Second Defendant holds the shares in San Leon Energy Plc as nominee for the First Defendant, the asset to which the arrêt entre mains attaches in the present case is not a debt but the First Defendant's right, pursuant to the nominee agreement, to call upon the Second Defendant to transfer the shares, or any benefit derived from them to him. As the Second Defendant is a company incorporated, and having its registered office, in Jersey the appropriate forum for the enforcement of that right would be Jersey, and accordingly the Court is satisfied that the asset to which the interim arrêt attached is situate in Jersey and the Court accordingly had jurisdiction to grant the arrêt .

8. At the time that the interim arrêt entre mains was granted the Plaintiff had a liquidated claim against the First and Second Defendants. As a result of the Master's determination of the summary judgment application in favour of the Plaintiff, the Plaintiff is now a judgment creditor. The Plaintiff advised the Court that whilst there were other creditors of the First Defendant, they were aware of these proceedings and had not sought to intervene. The Plaintiff further confirmed that it was not aware of any bankruptcy process or procedure in train that might affect the Court's decision to confirm the arrêt entre mains .

9. The First Defendant did not appear at the hearing nor had he filed any objection to the order sought; although he had filed an Answer to the Order of Justice he did not appear at the application before the Master for summary judgment.

10. The Court is satisfied that it had jurisdiction in respect of the grant of the interim arrêt entre mains , that the interim arrêt was properly granted and that there is no reason not to confirm it.

11. The Plaintiff sought various ancillary orders in respect of the vesting of title in the shares and their sale. Given that the First Defendant did not appear, the Court made certain changes to the orders sought in relation to the mechanism for sale and to ensure that the First Defendant's interest in any unsold shares was protected. Authorities JTC (Jersey) Limited v Fanning and Anor [2023] JRC 122 Novatrust Limited v Watson [2020] JRC 224 . FG Hemisphere Associates LLC v Democratic Republic of Congo and La Generale des Carrieres et des Mines [2010] JLR 524 . Page Last Updated: 01 Nov 2023 Back to top About JLIB Accessibility Contacts Disclaimer Feedback Privacy policy Site map © Jersey Legal Information Board 2001- This website is not compatible with your web browser. You should install a newer browser . If you live in Jersey and need help upgrading call the States of Jersey web team on 440099. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII