Directors' duties — acting with a view to the best interests of a Jersey company
In a helpful judgment, the Jersey Court of Appeal has upheld the decision of the Royal Court in Pirrwitz v AI Airports International Ltd and PI Power International Ltd  JRC 017. In the process, the Court of Appeal has clarified the duty of a director under article 74(1)(a) of the Companies (Jersey) Law 1991, which is to ‘act honestly and in good faith with a view to the best interests of the company’. This, the court confirmed, is a subjective duty: the best interests of the company is a matter for the directors to determine, not the court.
The court noted, however, that directors are subject to other duties and, in particular, they must exercise their powers for the purposes for which they were conferred. In contrast to the duty under article 74(1)(a), this is an objective duty — so that a director can be in breach of it notwithstanding his or her honest belief that that what was done was in the company’s best interest.
This briefing considers the decision in relation to the duties of directors. The judgment is also of interest for its discussion of the remuneration of directors and in particular the scope of provisions in articles of association under which directors may be remunerated. That aspect of the case is considered in a separate briefing…
If you are registered and logged in to the site, click on the link below to read the rest of the Mourant Ozannes briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Mourant Ozannes
News from The Lawyer
Briefings from Mourant Ozannes
On 11 September the Guernsey Court of Appeal confirmed the test to be applied in determining whether a person should be added as a party to existing proceedings.
When a company is being wound up in the jurisdiction where it is incorporated, should an anti-suit injunction be issued to prevent a creditor or member from pursuing proceedings in another jurisdiction?