Court of Appeal

Published April 22, 2008

Masri v Consolidated Contractors International UK Ltd and Others (No 2)

Before Lord Justice Ward, Lord Neuberger of Abbotsbury and Lord Justice Lawrence Collins

Judgment April 4, 2008

The court had the power to appoint a receiver by way of equitable execution over future receipts from a defined asset.

The Court of Appeal so stated, inter alia, in a reserved judgment dismissing appeals by the fourth and fifth defendants, Consolidated Contractors International Company SAL (CCIC) and Consolidated Contractors (Oil and Gas) Company SAL (CCOG), from a decision of Mrs Justice Gloster in the Commercial Court of the Queen’s Bench Division ([2008] All ER (Comm) 305: (i) to appoint a receiver in relation to CCOG’s interest in revenues from the Masila Oil Concession in the Yemen; (ii) to make a freezing order restraining CCOG from disposing of its interest in the concession and from selling oil from the concession area otherwise than in the ordinary course of business; and (iii) to order CCOG and CCIC to make an affidavit of assets.

Judgments on liability and quantum ([2006] EWHC 1931 (Comm); [2007] EWHC 468 (Comm)) had previously been given for the claimant, Mr Munib Masri.

Mr Alexander Layton QC, Mr Thomas Raphael and Mr Ben Olbourne for the fourth and fifth defendants; Mr Simon Salzedo and Mr Colin West for Mr Masri.

LORD JUSTICE LAWRENCE COLLINS said that the court had in personam jurisdiction over CCOG and could make a receivership order by way of equitable execution in relation to foreign debts; the judge had not exceeded the permissible limits of international jurisdiction.

The defendants submitted, however, that a receiver could not be appointed over future debts or future income but a review of authority, including Soinco SACI v Novokuznetsk Aluminium Plant ([1998] QB 406), confirmed that there was no binding authority that the jurisdiction was not available in relation to future income from a defined asset.

It was necessary to consider the extent to which the court’s present powers were constrained by practice prior to the enacting of the Judicature Act 1873, but the answer was that in 2008 there was no reason why the court should not exercise a power to appoint a receiver by way of equitable execution over future receipts from a defined asset.

Furthermore, there was no longer a rule, if there ever had been, that an order could only be made in relation to property which was presently amenable to legal execution.

In any event, there was no principle which prevented the development of existing authority to extend the remedy to the property which was the subject of the receivership order in this case. Lord Neuberger and Lord Justice Ward agreed.

Solicitors: Olswang; Simmons & Simmons.

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