Enforcement Of Jersey Security Agreements

As the credit crunch continues to impact on the global economy and banking covenants come under greater pressure, lenders are increasingly examining the detail of their security packages in order to identify the various enforcement options open to them. Where the security package includes a Jersey law security interest agreement in respect of Jersey situs assets, it is necessary to take into account the provisions of the Security Interests (Jersey) Law 1983 (the "1983 Law"), especially as the enforcement provisions may differ to those applicable under English law security documents.

When are Jersey security interest agreements used?

Generally, security over Jersey situs assets, such as shares of a Jersey company, units of a Jersey unit trust (such as a JPUT), bank accounts in Jersey or a portfolio of assets held by a Jersey intermediary, will be created pursuant to the 1983 Law. Jersey law does not recognise the concept of the floating charge, so it is important to