Analysis
By a trust deed dated 24 December 1987 (trust deed) Edoarda Crociani (settlor) settled a promissory note on herself and others for the benefit of her daughters, Cristiana Crociani (Cristiana) and Princess Camilla de Bourbon des Deux Siciles. The trust deed conferred extensive powers on the trustees in respect of both capital and income, including power to pay the whole or any part of the trust funds to another trust. Originally, it was provided that the forum for the administration of the trust and its construction should be governed by the law of the Bahamas. Clause 12(6), however, provided that ‘thereafter the rights of all persons and the construction and effect of each and every provision hereof shall be subject to the exclusive jurisdiction of and construed only according to the law of the said country which shall become the forum for the administration of the trusts hereunder’. By October 2007 the trustees comprised the settlor and others (Jersey trustees), as a result of which the proper law became that of Jersey. On 9 February 2010 the trustees appointed the trust assets apart from the promissory note to another trust (fortunate trust), of which the settlor was both a trustee and a beneficiary together with her daughters and their respective children. The parties to that appointment expressly submitted to the non-exclusive jurisdiction of the courts of Jersey. Subsequently, relations between the settlor and Cristiana deteriorated and, in June 2011, the settlor revoked the fortunate trust and withdrew its assets for her benefit. Cristiana then alleged that the trustees had acted wrongly and threatened to take steps against them. On 10 February 2012 they resigned and appointed Appleby Trust (Mauritius) Ltd (Appleby) as sole trustee. Notwithstanding, on 2 August 2012 the Jersey trustees and Appleby appointed the trust assets into another trust in Jersey. On 18 January 2013 Cristiana and her children brought proceedings in the Royal Court against the Jersey trustees and Appleby alleging, inter alia, breach of trust and requiring the trust assets to be reimbursed. Several applications were then made to the Royal Court, the most recent being an application by the settlor and others to stay the proceedings on the ground that the effect of clause 12(6) of the trust deed was to confer exclusive jurisdiction on the courts of Mauritius. On 2 October 2013 it was held by the Royal Court that the stipulation did not confer exclusive jurisdiction on the courts of Mauritius but that, if it did, the proceedings should nonetheless be permitted to proceed in Jersey. On 7 April 2014 the judgment was upheld by the Court of Appeal which considered that the stipulation was not concerned with jurisdiction but that, even if it did, the Royal Court was entitled to reach the conclusion which it did and the appeal should be dismissed. The settlor and others appealed.
Held (dismissing the appeal):
- 1) The Court of Appeal had been right in concluding that clause 12(6) of the trust deed was not concerned with identifying which country’s courts should have jurisdiction to determine disputes relating to the trust. The expression ‘forum of administration’ could refer to the court which was to enforce a trust but had not such a well established technical significance that it could not mean the place where the trust was administered in the sense of its affairs being organised. Even if the forum stipulation did mean that the courts of Mauritius had jurisdiction as a result of the appointment of Appleby, it was doubtful whether it was sufficiently clearly expressed to establish that it was intended that those courts should have exclusive jurisdiction. The expression ‘subject to the exclusive jurisdiction’, when read on its own, would appear to have the effect of conferring exclusive jurisdiction but, when properly construed in its context, the exclusive stipulation would appear to have a different purpose, namely to ensure that all issues concerning the trust were governed by the same law, thereby avoiding the risk of dépeçage (ie that different aspects of the trust were subject to different proper law). However, if this conclusion was wrong, it may well be that clause 12(6) of the trust deed would only confer non-exclusive jurisdiction on the courts of the country to which it refers, and there was a strong case for saying that its effect was that the courts of Jersey had jurisdiction in relation to three out of the four principal claims brought in these proceedings.
- 2) Even if clause 12 of the trust deed conferred exclusive jurisdiction on the courts of Mauritius in relation to the four claims raised by Cristiana and her children, the Court of Appeal was right not to interfere with the decision of the Royal Court that no stay should be granted in respect of the proceedings in Jersey. In the context of contractual exclusive jurisdiction clauses, the approach of the court to a claim brought in another jurisdiction was authoritatively set out in Donohue v Armco Ltd [2001] UKHL 64 – unless the party suing in the non-contractual forum can show strong reasons for suing in that forum, ordinarily the court will exercise its discretion to secure compliance with the contractual bargain. As to whether the same test should apply to an exclusive jurisdiction clause in a trust deed, it should be less difficult for a beneficiary to resist the enforcement of such a clause than it was for a contracting party to resist the enforcement of a contractual exclusive jurisdiction clause. This was because, unlike contracts, the court has an inherent jurisdiction to supervise, and if necessary to intervene in, the administration of trusts, primarily to protect the interests of the beneficiaries. Accordingly, while it was right to confirm that a trustee is prima facie entitled to insist on and enforce an exclusive jurisdiction clause in a trust deed, the weight to be given to the existence of the clause is less (or the strength of the arguments needed to outweigh the effect of the clause is less) than where one contracting party is seeking to enforce a contractual exclusive jurisdiction clause against another contracting party. On the facts of the case, while there was considerable force in the argument that the Royal Court had not approached this issue correctly, the arguments of the party seeking to avoid the exclusive jurisdiction clause outweighed the simple point that prima facie effect should be given to such a clause. Therefore the proceedings should not be stayed.
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