Geneva Trust Company (GTC) SA v IDF (by her court-appointed guardian) and MF
| Jurisdiction | Cayman Islands |
| Judge | Kawaley, J. |
| Judgment Date | 21 December 2020 |
| Court | Grand Court (Cayman Islands) |
(Kawaley, J.)
GRAND CT.
Conflict of Laws — jurisdiction — forum conveniens — Cayman Islands not more appropriate forum for determination of validity of Cayman trust where trustee had submitted to jurisdiction of Italian court considering validity and Italian proceedings at advanced stage
Held, granting the guardian's application for a stay:
(1) The Court of Milan was prima facie the most appropriate forum. The present proceedings were not commenced pre-emptively but in response to the Lugano proceedings and, primarily, the Milan proceedings. The trustee took no steps actively to seek the adjudication of the contentious validity question in this court. This wider litigation history was central to the forum non conveniens analysis. The other considerations, standing by themselves, were less clear-cut. (a) The fact that the Cayman Islands was the governing law was counterbalanced by the fact that the Court of Milan would apply the trust's governing law to the validity question. (b) The fact that the witnesses were located in or near Italy and were not native English speakers was counterbalanced, to some extent, by the fact that the two main witnesses were fluent English speakers. (c) The inconvenience to the guardian of travelling to the Cayman Islands was counterbalanced by the fact that she was not a key witness and could testify remotely. (d) The legal nexus of the trust with the Cayman Islands was counterbalanced to a significant extent by the fact that the trustee administered the trust from Switzerland and the trust assets were located there. (e) The significance of Cayman law governing the validity issue was somewhat diminished by the fact that the guardian's invalidity case appeared to turn primarily on issues of fact (paras. 23–26).
(2) Section 90 of the Trusts Law did not confer exclusive jurisdiction on the Grand Court to adjudicate all the issues which the section expressly required to be determined under Cayman Islands law. Reading ss. 88 and 89 together, it appeared that Part VII of the Law was intended to apply, not to every trust anywhere in the world, but to trusts governed by Cayman Islands law by virtue of the fact that either (a) local law was expressly selected as the governing law of the trust in the relevant trust instrument; or (b) this forum was expressly selected as the forum for administration of the trust. None of these provisions, including s.90, expressly dealt with this court's jurisdiction at all, let alone conferred express statutory jurisdiction over all trusts governed by Cayman Islands law as the trustee contended. The so-called “firewall provisions” of Part VII provided no support for the proposition that s.90 contained a statutory exclusive jurisdiction clause (paras. 31–37; para. 54).
(3) The forum for administration clause in the trust was not an exclusive jurisdiction clause which was binding on the guardian in relation to the invalidity claim. Whether a forum for administration clause, irrespective of whether or not it was expressed to be exclusive, conferred exclusive jurisdiction on the relevant court required consideration of the context in which the question arose. An application for Beddoe relief under s.48 of the Trusts Law made in the Cayman Islands in relation to a trust containing a forum administration clause would in most cases justify this court in viewing itself as vested with exclusive jurisdiction for the purposes of such an application. However, the claim brought by the guardian in the Milan proceedings was not caught by the forum for administration clause in all the circumstances of the case. The guardian was asserting a claim against the trust and there was no reason why she should be bound or affected by the terms of the trust. On the alternative assumption that the guardian's claim was caught by the forum for administration clause, the guardian was not bound by it in any event because (a) cl. 10.2 of the declaration of trust was not by its terms expressed to be an “exclusive” forum for administration clause; (b) the validity issue had not arisen as an application for Beddoe-type relief under s.48 of the Law; and (c) (most significantly) it was too late for the trustee to seek to compel the guardian to have the validity issue determined in the forum for administration having already obtained Beddoe approval for the dispute to be adjudicated on its merits before the Milan court. The fact that the trustee had already elected to submit to the jurisdiction of the Milan court and those proceedings had progressed to a stage where a final hearing was scheduled was a powerful factor weighing against permitting the trustee to enforce cl. 10.2 at this stage. In seeking to enforce cl. 10.2 against the guardian as an exclusive jurisdiction clause, the trustee was effectively asking the court to decide, at least in principle, the trustee's entitlement to an anti-suit injunction. It was plain and obvious that an application by the trustee for an anti-suit injunction would be unarguable, being nearly five years after the validity of the trust was first challenged in foreign proceedings and over a year after the trustee submitted to the jurisdiction on the merits of the Milan proceedings (paras. 58–75).
(4) The general principles governing forum non conveniens were not in dispute. When considering which forum was the most appropriate in the context of concurrent proceedings (a) the fact that jurisdiction had been challenged and lost in the foreign proceedings, and (b) the more advanced status of those foreign proceedings might well be dispositive of a stay application. The Milan court was an appropriate forum in circumstances where (a) s.90 of the Law did not contain a statutory exclusive jurisdiction clause; (b) cl. 10.2 did not constitute an exclusive jurisdiction clause enforceable against the guardian in respect of her claim that the trust was invalid; (c) there was no arguable basis upon which the trustee could seek an anti-suit injunction to restrain the guardian from continuing the Milan proceedings if the guardian's application to stay the present proceedings were to be refused; and (d) there was no identifiable utility to facilitating concurrent proceedings on the same issue before this court and the Milan court in circumstances where the trustee had already submitted to the jurisdiction of the Milan court and those proceedings were far advanced. The merits of the guardian's stay application did not depend on a careful weighing of the standard forum non conveniens factors, which were fairly evenly balanced. The dispositive consideration, in the unusual circumstances of the present case, was the stage at which the application was being heard. If the present application was being heard before or shortly after the Milan proceedings were commenced in 2016, the scales might well have tipped decisively in favour of finding that the Cayman Islands was the most appropriate forum, given the court's ability to deal with the validity issue under Cayman Islands law without the need for expert evidence and probably more quickly. Four years on, with the Milan proceedings in full flow, the significance of the trust's Cayman Islands law connections had materially waned. The trustee had submitted to the jurisdiction of the Milan court. The guardian's application for a stay of the present proceedings on the ground that Italy was the most appropriate forum for the dispute as to the trust's validity to be adjudicated would be granted (paras. 76–85).
(1) A Trust, In re, [2012] SC (Bda) 72 Civ, Bermuda Supreme Ct., December 12th, 2012, considered.
(2) A Trust, In re, 2016 (2) CILR 416, considered.
(3) B Trust, In re, 2010 (2) CILR 348, considered.
(4) Crociani v. Crociani, 2014 (2) JLR 508, considered.
(5) Daiichi Chuo Kisen Kaisha v. Chubb Seguros Brasil SA, [2020] EWHC 1223 (Comm); [2020] Lloyd's Rep. 137, considered.
(6) Donohue v. Armco Inc., [2001] UKHL 64; [2002] 1 All E.R. 749; [2002] C.L.C. 440, considered.
(7) Globalvest Management Co. L.P. v. Dantas, Cause No. 418 of 2004, Grand Ct., February 28th, 2006; 2006 CILR N [14], considered.
(8) Grupo Torras S.A. v. Bank of Butterfield Intl. (Cayman) Ltd., 2000 CILR 452, considered.
(9) H Trust, In re, 2006 JLR 280, referred to.
(10) HSBC Intl. Trustee Ltd. v. Tan Poh Lee, Cause No. FSD 175 of 2019, Grand Ct., November 7th, 2019, unreported, considered.
(11) Merrill Lynch Bank & Trust Co. v. Demirel, 2010 (2) CILR 75, considered.
(12) Navigators Ins. Co. v. Atlantic Methanol Production Co. LLC, [2003] EWHC 1706 (Comm); [2004] Lloyd's Rep. IR 418, considered.
(13) T Co. v. AA, Cause No. FSD 188 of 2017, Grand Ct., March 13th, 2018; 2018 (1) CILR N [3], considered.
(14) Vedanta Resources plc v. Lungowe, [2019] UKSC 20; [2020] 1 A.C. 1045; [2019] 2 W.L.R. 1051; [2019] 3 All E.R. 1013; [2019] BCC 520, considered.
A trustee sought a declaration that a trust was an irrevocable discretionary trust validly established under Cayman Islands law.
The first defendant was acting as guardian on behalf of the elderly settlor of a trust. In 2015, the guardian brought proceedings in Lugano, Switzerland, against the plaintiff, the trustee of the trust, seeking to establish the invalidity of the trust. In 2017, the guardian commenced proceedings in the Court of Milan. In response to the Milan proceedings, the trustee commenced the present proceedings in 2017 seeking directions in relation to the Milan proceedings (Beddoe relief). The court approved the trustee's defence of the guardian's claim. Directions in the Milan proceedings had been given for a final hearing in December 2021.
In its 2017 summons, the trustee also sought a declaration that the trust was an irrevocable discretionary trust validly established and subsisting under Cayman Islands law and subject to the exclusive jurisdiction of the Cayman courts pursuant to cl. 10.2 of the...
To continue reading
Request your trial