In Geneva Trust Company (GTC) SA v IDF & Anr (Re Stingray Trust) (judgment 21/12/20) the validity of a Cayman trust was contested by its settlor (acting through a guardian) in the framework of a separate Italian procedure. Although the trustee lost a challenge to Italian jurisdiction, he lobbied his own rival claims in the Cayman Islands for a declaration that the trust was valid.
The grantor asked Cayman for a stay on the grounds of forum non conveniens. The trustee argued that the Cayman court could not grant such a stay because s. 90 of the Cayman Trust Act imposed exclusive jurisdiction on the Cayman Court in matters relating to the validity of a Cayman trust. He said it was the orthodox view of the authority-based section going back 20 years. Kawaley J., after reviewing the case law, concluded that none was convincing or compelling to that effect, nor was the correct interpretation of the law (section 90 was a choice of law provision , not a jurisdiction provision), and he had the power to grant a stay. A stay was granted on condition that the Italian court apply Cayman law to the trust challenge.
The trust deed also contained a clause that the Cayman courts are the forum for the administration of the trust. Kawaley J concluded that such a clause is not an exclusive jurisdiction clause enforceable against a party when it sues as a stranger to the trust; and even if it had been so (inspired by dicta de Crociani as to the weight to be given to such clauses), the court would not have opposed it to the grantor on the basis of the facts.
Although the Geneva Trust the case took place in a specific Cayman context, the similarity of its legislation to that of other offshore jurisdictions and the more general application of the findings on forum clauses make it an important decision for lawyers fiduciaries practicing in the international sphere. Dakis Hagen QC appearing with Rachael Reynolds and Deborah Barker Roye (both from Ogier) represented the successful candidate. The full judgment is accessible here.