Shares in a Saudi company were held I trust for a Cayman company which had gone into liquidation. Saudi law did not recognise such trusts, and the parties now disputed which was the forum conveniens.
Held: The liquidators’ appeal succeeded. Since Cayman Islands law recognised the division of the legal and beneficial interests in shares the trusts were arguably valid, even though ownership of the shares as registered in Saudi Arabia were governed by the lex situs, Saudi law. However the beneficiary’s claim under the trust was with England and Wales jurisdiction by the 1987 Act.
‘Provided that the property that is made the subject of a trust can be alienated at all under the lex situs, questions as to the validity and effect of placing such assets in trust, even though the assets are shares in a civil law jurisdiction, can be determined by the governing law of the trust. To put the matter in the context of this case, the declarations of trust will not be dividing the equitable and legal interests in the shares under Saudi Arabian law. That is not possible. But the declarations of trust may give SICL rights under the trust in respect of those shares that will have to be determined by the governing law of the trust, taking into account that under Saudi Arabian law a division of equitable and legal interests is not possible. All these matters will have to be worked out at the next stage of this litigation when the court comes to consider the effect on the rights granted by the declarations of trust of the transfer to Samba which took effect under Saudi Arabian law.’
Judges:
Longmore, Kitchin, Vos LJJ
Citations:
[2014] EWCA Civ 1516, [2015] 2 WLR 1281, [2015] BPIR 411, [2014] WLR(D) 521, [2015] WTLR 931, 17 ITELR 921
Links:
Statutes:
Recognition of Trusts Act 1987
Jurisdiction:
England and Wales
Citing:
Appeal from – Akers and Others v Samba Financial Group ChD 28-Feb-2014
Samba sought a stay of insolvency proceedings. Shares in a Saudi company were held in trust by a company registered in Cayman. Upon that company going into liquidation, the shares were transferred to the defendant, who now argued that since Saudi . .
Cited by:
Appeal from – Akers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.
Trusts, International
Updated: 18 July 2022; Ref: scu.539584
