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Subjective and objective views  of directors’ duties

Case briefing: Vilsmeier v AI Airports International Ltd and PI Power International Ltd


V was a director of fund companies. Relations with employees and investors were strained. Eventually V sued for unpaid overtime fees and security costs incurred after the attentions of Kazakh “specialists” had led V to hire personal body guards and an armoured car.

The fund companies counterclaimed for security costs already paid by them, claiming these were incurred in breach of V’s duty to act in their best interests.


Jersey’s statutory formulation of directors’ duties is not a codification, so other rules (e.g. from case law) remain relevant. The director’s statutory duty to act honestly and in good faith with a view to the best interests of the company is a subjective one, but such steps must be taken for a proper purpose, which is an objective issue.

Jersey’s statutory formulation of directors’ relief from liability for breach of duty where they have been honest (but not also reasonable, as in English law) imports a degree of subjectivity (turning on what a director knew, not what a reasonable person would have known) but there is also a core of objective principle, as directors are not free to set their own standards of honesty.


The statutory formulation of relief is a shield not a sword. When in doubt directors should seek shareholder authorisation for their actions.

If you need help or advice on directors’ duties please contact Christopher on: +44 (0) 1534 632255 or email commercial@viberts.com.


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