Jersey Jurisdiction: Arresting Cross-Border Debts

A creditor owed money by a debtor who is owed money in turn by a Jersey company can get a court order for payment from the Jersey company direct to the creditor. However, the court order will not be made unless the creditor proves the Jersey company will not have to pay a second time overseas.

In Tepe Insat Sanayii AS v Boru Hatlari Ile Petrol Tasima AS (Botas) [2016] JRC 012A Jersey's Royal Court held that Jersey companies' debts to their Turkish parent were situate in Turkey, so Jersey had no jurisdiction to arrest those debts to pay the parent's creditors.

Background

The issue arose in an application to enforce ICC awards in Jersey by Tepe, a Turkish construction company. Botas was a Turkish oil company. Botas had employed Tepe to construct facilities on the Baku-Tbilisi-Ceyhan oil pipeline, but Botas refused to pay. So Tepe took it to arbitration, and won.