The Trusts (Amendment No 5) (Jersey) Law 2012 is the latest in a
series of amendments to the Trust (Jersey) Law 1984 designed to
maintain Jersey's position as an attractive repository for
private wealth and a leading trusts jurisdiction.
In 2006, Article 9 of the 1984 Law was amended to increase the
protection afforded to Jersey Law trusts under attack by foreign
courts. Article 9(1), as amended in 2006, provided that questions
relating to the validity and administration (including capacity of
Settlors, exercise of powers and dispositions of property) of
Jersey trusts should be determined in accordance with Jersey law
and without reference to foreign law.
Almost immediately, questions were raised as to the effect of
these amendments. In Re B (heard the day after the 2006
amendments came into force) the Court held that, notwithstanding
the new law, the principle of comity still applied in respect of
enforcing an English order 'varying' a Jersey trust and
that, in any event, Article 51 directions could be used to give
substantial effect to an English Court order requiring variation of
a trust irrespective of whether the trust was variable under Jersey
A degree of judicial clarity was afforded by the 2008 judgment
in Mubarak v Mubarak  JLR 250 which sought to
distinguish between variation and alteration of a trust. Here, the
Jersey Court held that under Articles 9(1) and 9(4) an English
order 'altering' a Jersey trust could not be enforced
irrespective of comity (although the trust in that case was altered
on other grounds). The Court confirmed, however, (that had the
English decision amounted to a variation as in Re B), and
not an alteration, the Court could have given the trustee
directions so as to achieve the objectives of the English Court
order as the giving of directions would not amount to enforcement
for the purposes of Art 9(4). An alternation of a trust involves
making changes which are outside of the powers of that trust.
Variation of a trust involves changes which are within the powers
of the trust.
The recent amendment No. 5 to Article 9 builds on the findings
in Mubarak, enhancing the level of protection provided to
Jersey trusts. Article 9(1) now expressly states that any question
relating to powers to vary a Jersey Law trust or the nature and
extent of beneficial rights and interests in trust property must be
determined in accordance with Jersey Law. A new Article 9(3A)
provides that Jersey's own conflicts of laws rules are not to
be applied when determining any question set out in Article 9(1),
and Article 9(4) has been extended so as to provide that decisions
of foreign tribunals (e.g. arbitration awards) as well as foreign
courts will not be enforceable to the extent that they are
inconsistent with Article 9 irrespective of conflicts of laws
The amendments to Article 9(1) seek to immunise Jersey trusts
against future attempts by foreign courts to alter their terms, and
the amendments to Articles 9(3) and 9(4) aim to prevent conflicts
of laws principles from being used to circumvent this protection.
Foreign laws are not wholly excluded as Article 9(2A) makes clear
that foreign law will still apply in determining whether foreign
situate assets belong to a Settlor and have been validly settled).
Although the amendments are yet to be tested, it appears that
attempts by the English Family Courts to order alteration of Jersey
trusts may be met with more resistance in the future.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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