Brightwaters Energy Limited v Eroton Exploration and Production Company Limited

In enforcing a registered foreign judgment, the High Court may appoint receivers by way of equitable execution where it is just and convenient to do so. The court must consider the judgment debt, the likely recovery and the probable costs, together with all relevant circumstances. A receiver may be appointed over future debts and foreign assets where there is a hindrance or difficulty in ordinary execution and a real or reasonable prospect of useful enforcement. The court need not resolve hypothetical questions about the order’s ultimate effectiveness. A prior charge does not necessarily make the remedy fruitless, since the receivership operates in personam and remains subject to the charge-holder’s rights. The judgment creditor’s pursuit of foreign winding-up proceedings does not, before an order is made, exclude other enforcement methods. Business disruption is generally not a material objection to execution.

Brightwaters sought the appointment of receivers over revenues payable to Eroton under a contract concerning Eroton’s share of oil from the OML18 oilfield. The application followed registration in England, under Administration of Justice Act 1920, of a Nigerian judgment entered by consent against Eroton and another company.

Eroton opposed the order on grounds including the alleged absence of an enforceable asset, existing security in favour of Guaranty Trust Bank, Brightwaters’ pending Nigerian winding-up proceedings, insufficient connection with England, lack of notice to the bank, and material non-disclosure on the without-notice application. The central issue was whether the circumstances made the appointment of receivers just and convenient.

The application was granted. Mr Justice Butcher held that the court had jurisdiction because the Nigerian Judgment had been registered and Eroton had become aware of both the registration and the receivership application. Any service defect would in any event have been capable of cure under CPR 6.15 and/or 6.27.

1. The governing discretion arose under section 37(1) of the Senior Courts Act 1981. Under CPR PD 69.5, the court had regard to the amount claimed, the amount likely to be obtained and the probable costs. The overriding consideration remained the demands of justice, including the policy of enforcing judgments. A hindrance or difficulty in ordinary execution was required, but no rigid form of special circumstance was necessary.
2. The sums payable by Shell were a sufficiently identified asset, including future receipts. The court drew inferences that the relevant contract was governed by English law and provided for arbitration seated in England. There was at least a reasonable prospect that receivership would assist enforcement. It was unnecessary to determine hypothetical questions concerning the Nigerian-law security arrangements.
3. The receivership would operate in personam and would not transfer ownership or interfere with GT Bank’s proprietary rights. The receivers would take subject to any prior charge. The apparent fixed charge, possible crystallisation of the floating charge and substantial bank debt did not establish that the order would be fruitless. The judgment creditor’s willingness to bear the receivership costs was relevant.
4. Brightwaters had not irrevocably elected to rely only on the Nigerian winding-up proceedings. No Nigerian winding-up order had been made, and the proceedings had been stayed. Any retrospective effect of a future order would arise only if such an order were made; pending recognition in England, the first-past-the-post approach applied.
5. The registered English judgment and the English-law asset with an apparent English situs supplied a sufficient connection with England and satisfied the requirements of comity. No general rule required notice of a receivership application to secured or unsecured creditors under CPR Part 69 or CPR 69.4. Notice of the order was nevertheless directed to GT Bank, with liberty for affected third parties to apply.
6. The omission of the registered charges from the without-notice presentation was not material. Applying Tugushev v Orlov (No. 2) [2019] EWHC 2031 (Comm), the court would not set aside the earlier orders and, in any event, could determine the receivership application inter partes.