Settlor Not Living "La Dolce Vita" After Singapore High Court Determines A Failure To Surrender Beneficial Interest In Assets

• Author: Mr Hussein Mithani, Richard Norridge and Daniel Chia
• Law Firm: Herbert Smith Freehills
• Published date: 29 May 2023

Summary

In Dolce Vita Fine Dining Company Limited v Zhang Lan and others [2022] SGHC 278 the High Court of Singapore determined that assets held within a family trust structure were beneficially owned by the settlor of those trusts. In particular, although the Judge found that the settlor had executed documents putting these assets into a company within the trust, he determined that the settlor never intended to relinquish their beneficial interest in those assets and thus retained that beneficial interest. This ultimately led to an order that creditors of the settlor could enforce against those assets.

This decision concerns Zhang Lan (the "Settlor") who is a wealthy Chinese businesswoman and has been involved in a protracted dispute with La Dolce Vita (the "Plaintiff") which has involved an arbitration and proceedings in New York, Hong Kong, and Singapore.

Hussein Mithani, an associate in our disputes and private wealth team, and Daniel Chia, head of litigation at our Singapore alliance firm Prolegis LLC, consider the decision in more detail below.

Background

The Settlor owned Success Elegant Trading Limited ("SETL"). SETL had bank accounts in its name, one at Credit Suisse AG and one at Deutsche Bank AG (the "Bank Accounts").

In 2013, the Plaintiff acquired shares in companies beneficially owned by the Settlor. The proceeds of the sale of...