Crociani & O’rs v Crociani & O’rs & Camilla de Bourbon des deux Siciles [2014] UKPC 40


The case arose from proceedings commenced in Jersey in January 2013 concerning alleged breaches of a trust which was created in 1987 (the “Grand Trust”).  The claims were made to recover funds and assets believed to be worth in excess of USD$100 million. It was generally accepted that, at the time of the alleged breaches, the Grand Trust was governed by Jersey law and administered by the First to Third Appellants. By a deed made in 2012, the First to Third Appellants purported to retire as trustees of the Grand Trust in favour of the Fourth Appellant and change the proper law of the trust to Mauritius.

The Appellants sought to have the Jersey proceedings stayed on the basis that proceedings relating to the trust should be heard in Mauritius and not Jersey.  The relevant clause on which the Appellants relied for this contention was Clause 12 which provided (in terms):

The trustees shall have power to appoint new trustees in another jurisdiction and to declare that the trusts shall be read and take effect according to the laws of the country of the residence or incorporation of the new trustees. If this power were exercised, “…thereafter the rights of all persons and the construction and effect of each and every provision hereof shall be subject to the exclusive jurisdiction of and construed only according to the law of the said country which shall become the forum for the administration of the trusts hereunder.

The Royal Court in Jersey and the Court of Appeal refused the stay application and the Appellants appealed to the Privy Council.

The Issues

  1. Did clause 12 confer exclusive jurisdiction to the Mauritius courts?

The Appellants contended that clause 12 confered an exclusive jurisdiction on the courts of the country in which any trustee who replaced the original trustees for the time being is resident or incorporated (here, since the execution of the 2012 deed, Mauritius). Based on this, the Appellants made the following two further contentions:

  • forum for the administration of the trusts”

The Appellants first contention was that “the forum for the administration of the trusts” was a reference to the courts which had jurisdiction to decide and order how the Grand Trust’s affairs were to be conducted i.e. the courts which would resolve disputes and give directions in relation to the Grand Trust. The Respondents, on the other hand, argued that the words simply referred to the place where the affairs of the trust were run.

The Decision

The Privy Council decided that “forum” can be a reference to a court, or it could equally well be used to refer to a place for any purpose, including the place where the trust was to be administered (and there may, for example, be tax reasons why it is important to make this stipulation). The Privy Council therefore agreed with the Respondent’s interpretation.

  •  “subject to the exclusive jurisdiction”

The Appellants second contention was that the clause should be read as concerned with jurisdiction on the basis that it provided that the Grand Trust’s affairs were to be “subject to the exclusive jurisdiction of… the said country“. The Respondents argued that this was a misreading of the clause and that it should be a proper law provision: “subject to the exclusive jurisdiction of…the law of the said country” (emphasis added).

 The Decision

The Privy Council was of the view that the reference to “exclusive jurisdiction” did not make the courts of Mauritius the only jurisdiction in which disputes from the time of the 2012 deed could be resolved. Rather it meant that the governing law applied to all aspects of the Grand Trust.

  1. If Clause 12 conferred exclusive jurisdiction in favour of Mauritius, should the proceedings in Jersey be stayed?

The Privy Council noted that, in the context of contractual exclusive jurisdiction clauses, where a claim is brought in a court in breach of a contractual exclusive jurisdiction clause the burden is on the claimant to justify the claim continuing. To discharge this burden, the claimant must normally establish ‘strong reasons’ for doing so (Donohue v Armco Ltd [2001] UKHL 64). However, the Privy Council was of the view that, while it is right to confirm that a trustee is prima facie entitled to insist on and enforce an exclusive jurisdiction clause in a trust deed, the weight to be given to an exclusive jurisdiction clause is less than the weight to be given to such a clause in a contract.  Whilst a beneficiary who wishes to take advantage of a trust should be expected to be bound by the terms of the trust, it is not a commitment of the same order as a contracting party being bound by the terms of a commercial contract.

The Decision

The Privy Council concluded that, even if clause 12 conferred exclusive jurisdiction on the courts of Mauritius in relation to the claims raised by the Respondents, no stay should be granted in respect of the proceedings in Jersey because (amongst other things) (i) a number of trust law issues raised by the Proceedings would be governed by Jersey law; and (ii) it was a reasonable assumption that the documentation and many of the witnesses would be situate in Jersey.

The issue of jurisdiction clauses in trust deeds has been unclear for some time in light of various previous Court decisions which could be seen as conflicting.  Although this judgment provides some clarity, it was very much an issue of construction in relation to the specific wording used in the trust deed in question.  However, the case undoubtedly emphasises the need to draft very clear jurisdiction clauses if they are to have the desired effect.

We will be looking at this decision in more detail at our breakfast briefing at 8.30am on Tuesday 13 January 2015.