Guernsey held to be the most appropriate forum for hostile proceedings concerning a Jersey trust.

Representation of AA in re the D Discretionary Trust [2010] JRC 164, 7 September 2010, Commissioner Clyde-Smith, Jurats Liddiard and Nicolle.

In this case, the Royal Court of Jersey held that Guernsey was the most appropriate forum to hear a Representation seeking hostile relief against former trustees of the D Discretionary Trust, a Jersey trust, notwithstanding that the trust instrument expressly provided that the Jersey courts were to be the forum for the administration of the Trust.

Clause 3.1 of the trust instrument to the Trust provided that "this Trust is established under and shall be governed in all respects by the laws of the Island of Jersey which shall be the proper law of this Trust and the courts thereof shall be the forum for the administration of this Trust."

The Guernsey connection:

Apart from this Clause there was no other connection with Jersey. At all times the Trust had been administered in Guernsey and both of the former trustees of the Trust were incorporated in Guernsey and regulated by the GFSC. The Representor, which replaced the Former Trustees as trustee of the Trust on 25 June 2010, was a company incorporated in Switzerland. There was an action and an application for directions pending before the Royal Court of Guernsey.

The Guernsey proceedings arose from agreements recorded as informal loan agreements between the Former Trustees and the underlying companies of the Trust which had gone into liquidation in the BVI. There were insufficient assets in the Trust to repay the sums to those companies if such sums were found owing. Whilst the Former Trustees had recognised the appointment of the Representor as new trustee, they had declined to vest the assets in the Representor pending directions from the Guernsey Court.

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