The Plaintiffs were beneficiaries of a number of Trusts, governed by Cayman Islands law, of which E was the Settlor.
In the matter of Re Various Trusts A,B,C,D,E v. D1 and D2, 22 February 2017, the Grand Court was asked to exercise its discretion, pursuant to s10 of the Trusts Law, to substitute and appoint new trustees in circumstances where the existing Trustee (D1) was unwilling to act in US Forfeiture Proceedings to protect the assets of the trusts or considered itself able to voluntarily retire as Trustee. D1 effectively considered itself paralysed and the Plaintiffs, as beneficiaries of the Trusts, sought the removal of D1 as Trustee and to replace it with FFP (Cayman) Limited (FFP).
The Plaintiffs were beneficiaries of a number of Trusts, governed by Cayman Islands law, of which E was the Settlor. Certain Trust assets were subject to Forfeiture Actions in the US by the US Government, which alleged that assets of the Trusts were traceable to a conspiracy to launder money from a foreign state owned company. US law allowed for the controlling entities of those assets, which were ultimately controlled by D1, to make claims in the Forfeiture proceedings. This was not done. In the absence of any claims by a party having standing, the US Government might obtain assets worth hundreds of millions of dollars by default.
The Plaintiffs sought to remove D1 as Trustee due to its unwillingness to act, as it was alleged that that it might be held to be involved in money laundering by the US Government or exposed to civil or criminal liability in taking any action. Whilst this case was unusual in that the existing Trustee did not take a position on the application for it to be substituted, this case demonstrates that the Cayman Islands Court has the power to, and will where necessary, effect a substitution of a Trustee that is paralysed from acting in the best interests of beneficiaries of a Trust.