In a recent decision of the Grand Court of the Cayman Islands (Re Stingray Trust), Kawaley J resolved the previously unclear issue from previous decisions on whether s.90 of the Trusts Law (now “Act”) provides that all questions relating to, among other matters, the validity of a Cayman Islands Trust can only be adjudicated by the Cayman Islands courts.
Kawaley J, after a detailed review of the authorities and applying a purposive construction which was entirely consistent with the natural and ordinary meaning of the section, found that s.90 does not contain a statutory exclusive jurisdiction clause on the Cayman court to adjudicate all issues which the section expressly requires to be determined under Cayman Islands law. Kawaley J made clear that his finding in no way undermines the proposition that the combination of ss.48 and 90 of the Trusts Act applied to a trust expressly governed by Cayman Islands law will usually mean that an application for Beddoe relief would in most cases justify the Cayman court in viewing itself as vested with exclusive jurisdiction for the purposes of such an application.
Kawaley J described the proceedings as a tale of two representatives (the Guardian and the Trustee) and two jurisdictions (Italy and the Cayman Islands), whereby the Guardian of the elderly settlor and beneficiary of the trust sought to stay the Cayman proceedings brought by the Trustee to establish the validity of the trust, belatedly in response to the Italian proceedings brought by the Guardian to establish the invalidity of the trust; the Trustee had obtained retrospective Beddoe relief to participate in the Italian proceedings (see our previous blog here) and had submitted to the jurisdiction of the Italian court. Having determined that s.90 of the Trusts Act does not provide a statutory exclusive Cayman Islands jurisdiction clause, Kawaley J considered the issue of the appropriate forum, concluding that this was the Italian Court, having regard, not only to the logistical factors present, but to the fact that the Trustee had already submitted to the jurisdiction of the Italian court. Accordingly, Kawaley J granted the stay of the Cayman proceedings sought by the Guardian, subject to the condition that the validity of the trust was to be determined under Cayman Islands law.
This is an important decision on s.90 and is a good reminder that a prudent trustee, if practicable, wishing to have a contentious matter determined by the Cayman court, must ordinarily seek to invoke the court’s jurisdiction as the first and not the last resort.