Baker & Partners Secure Jurisdiction Victory In Application To Remove A Trustee

In a recent decision of the Jersey Royal Court Tanya Dick-Stock v PanTrust International SA, Wigley & Anor,1 Baker & Partners acting for a beneficiary, have secured a significant early victory in a legal battle for the court ordered removal of a Panamanian trustee of significant Jersey real estate.

In a significant intervention in the administration of what, on their face, appeared to be foreign law trusts, administered from Panama, with a non-resident trustee, the Royal Court has accepted jurisdiction to hear an urgent application to remove and replace PanTrust with a regulated Jersey trustee; G.B. Trustees Limited (an affiliate of Garfield-Bennett Trust Company).


The trusts were originally established in Jersey in the late 1970s.

In 2007 the administration of the trusts was uprooted from Jersey and taken to Panama. Trusteeship was transferred to a new Panamanian trustee, PanTrust International SA, and the proper law of the trusts was purportedly changed from that of Jersey to Panama (the "2007 DORAs").

Following an extensive investigation by the Panamanian authorities into its affairs, PanTrust was banned by the Panamanian regulator from conducting trust business from February 2015. The Panamanian regulator also ordered PanTrust to retire as trustee in favour of a new trustee, nominated by the settlor.

In response, two directors of PanTrust purported to transfer trusteeship from PanTrust to themselves without the consent of either the settlor or the beneficiaries, contrary to the order of the Panamanian regulator.

For a number of years, PanTrust and the beneficiaries have also been engaged in a parallel legal battle in the US state of Colorado concerning US law trusts of which the beneficiary in the Jersey proceedings was also interested.


The primary beneficiary of the trusts, the settlor's daughter, commenced proceedings before the Royal Court for the removal and substitution of PanTrust and Messrs Wigley with a new, Jersey regulated trustee.

PanTrust and Messrs Wigley responded by inter alia challenging the Royal Court's jurisdiction, seeking a stay of the Jersey proceedings pending the determination of the proceedings in Colorado (and proceedings it had commenced against the regulator in Panama) and alleging that the trusts were in fact a sham arrangement, designed and operated for the benefit of the settlor.

Before the court could grant the substantive relief sought (i.e. the removal of the trustee and transfer of assets), it had to consider whether it should assume jurisdiction over the dispute.2


The jurisdictional gateway relied upon by the beneficiary was Article 5(c) of the Trusts (Jersey) Law 1984 ("the Trusts Law") that there was Jersey situs trust property; namely the shares in the Jersey registered companies that held the Jersey real estate. Jersey's trust law prohibits the direct holding of Jersey immovable property on trust.

The beneficiary also relied upon Article 5(a) of the Trusts Law; that despite the apparent change of proper law to Panama by the 2007 DORAs, the proper law of the trusts remained that of Jersey. There is Jersey authority to the effect that a power to change the proper law of a trust, when vested in a trustee, is a fiduciary power.3


The court was satisfied that the dispute was within at least one of the 'gateways'; the trusts clearly held Jersey situs property.

Without reaching a determination on whether the trusts were still Jersey law trusts, the court considered that the inclusion of this point in the pleadings was an important factor in why Jersey should take jurisdiction over the removal application and that on the merits, the beneficiary had 'the better of the argument' on that point.

Following the Judicial Committee of the Privy Council decision in Crociani v Crociani4 the court's approach to the construction of an alleged jurisdiction clause was as follows:

First to consider whether the provisions in question amount to a jurisdiction clause at all. If the answer to the first question is yes, the court...

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