Joujou & Ors v Masri

An English court may appoint a receiver over a judgment debtor’s foreign assets in exercise of its in personam jurisdiction. The order does not itself establish the receiver’s title or possession against third parties abroad. Judicial administrators appointed by a foreign court, and subject to that court’s directions, are officers of that court rather than company agents bound by their status. Comity prevents an order expressed to bind such officers in the foreign jurisdiction. The proper course is to remove references to them while preserving a receivership order directed to the company. The order’s effectiveness abroad remains dependent on recognition under local law.

The appeal concerned receivership orders made by Gloster J in proceedings brought to enforce an English judgment debt owed by Consolidated Contractors (Oil and Gas) Company SAL. The orders extended the receivership to oil and contractual rights under the Masila Concession and purported to bind judicial administrators appointed by a Lebanese court, including through a penal notice.

The judicial administrators argued that they were subject to the Lebanese court’s control, had not submitted to the English jurisdiction, and could not properly be compelled to act inconsistently with Lebanese orders concerning payment and exequatur. The central issue was whether the English order could bind those foreign court-appointed officers in relation to assets outside England without impermissibly interfering with the Lebanese court’s jurisdiction.

1. Disposition. By majority, Arden LJ and Rimer LJ allowed the appeal in part. The receivership order was upheld insofar as it operated against CCOG, but all references to its Lebanese judicial administrators were removed. Toulson LJ would have allowed the appeal and set aside the receivership order in its entirety.
2. Receivership and foreign property. A court appoints a receiver over a party’s property in exercise of its in personam jurisdiction over that party. The jurisdiction is not excluded merely because the property is abroad. However, the lex situs governs the receiver’s ability to take possession of foreign property. An order does not itself place the receiver in possession or establish title against persons outside the jurisdiction. The principles in Re Maudslay [1900] 1 Ch 602 and Liverpool Marine Credit Co v Hunter (1868) 3 Ch App 479 supported that limitation.
3. Status of the judicial administrators. Under the Lebanese orders, the administrators were the only persons able to represent the companies, but important matters remained subject to the Lebanese court’s directions. They were therefore officers of the Lebanese court, not equivalent to directors or agents of CCOG. They were not bound by the English order merely because they constituted the company’s decision-making organ.
4. Comity. Expressly binding foreign court officers, and threatening them with contempt for non-compliance, created conflicting management regimes and exposed them to uncertainty and potential double jeopardy. It was an exorbitant exercise of jurisdiction and contrary to comity. The English court’s legitimate interest in enforcing its judgment could not prevail over comity in these circumstances. Rimer LJ emphasised that enforcement abroad would depend on recognition under the relevant foreign law, potentially through exequatur.
5. Further guidance. Arden LJ stated that the broad principle in Cranstown v Johnston (1796) 3 Ves Jun 170 is not unqualified and must be applied only in proper circumstances. Toulson LJ additionally considered that comity might exceptionally yield where justice according to internationally acceptable standards could not be obtained in the more natural foreign forum, referring to AK Investment CJSC v Kyrgyz Mobil Tel Ltd [2011] UKPC 7; he found no such suggestion in this case. Other argued issues, including service of contempt proceedings, state immunity, act of state and double jeopardy, were left undecided.

• Court of Appeal (Civil Division) — In [2011] EWCA Civ 746 , the majority allowed the appeal in part. The receivership order remained effective against CCOG, but could not bind the Lebanese judicial administrators.
• High Court of Justice (Commercial Court) — Gloster J made the relevant order on 1 December 2010, continued and varied it on 14 and 21 December 2010, and gave reasons on 3 March 2011. The order extended the receivership to oil and rights under the joint operating agreement and purported to bind the judicial administrators.