The recent case of A Limited FURBS decided in the Guernsey Royal Court provides helpful clarification on the question often faced by offshore trustees about whether to submit to the jurisdiction of a foreign court in overseas legal proceedings. This was the first Guernsey case to consider this issue, prior to which it was thought the Guernsey court would take a similar approach to that of the Jersey court.
The decision confirms that Guernsey court will usually take the same approach as the Jersey court, namely that trustees of a discretionary trust should normally resist submission to the jurisdiction of a foreign court. The case clarified, however, that in certain circumstances (for example where the trustee has limited discretion) submission may be appropriate to assist the foreign court. The facts of A Limited FURBS fell into this latter category and so the judge sanctioned the trustee’s submission to the jurisdiction of the English court in the underlying matrimonial proceedings.
The case also confirmed that trustees should be encouraged to apply to their “home” court for directions before deciding whether to submit to the jurisdiction of an overseas court.