Akers & Ors v Samba Financial Group [2014] EWCA Civ 1516 (04 December 2014)

Akers & Ors v Samba Financial Group [2014] EWCA Civ 1516 (04 December 2014)

Article 4 of the Hague Trusts Convention does not exclude the application of the Convention to declarations of trust where the settlor already owns the property and declares himself trustee; the Convention applies to the validity and effects of such trusts. The lex situs (Saudi Arabian law) governs only whether the property can be alienated at all, not the validity or effects of the trust. Article 15 does not mandate the application of Saudi Arabian law to the transfer of beneficial interests in this context without clear evidence that the relevant rules are mandatory. The issues of governing law and the application of Article 15 could not properly be determined on a summary or stay...

Citation
[2014] EWCA Civ 1516
Parties
Claimant/appellant: Stephen John Akers; Claimant/appellant: Mark Byers; Claimant/appellant: Hugh Dickson; Claimant/appellant: Saad Investments Company Limited (in liquidation); Defendant/respondent: Samba Financial Group
Jurisdiction
England and Wales
Judgment Date
04 December 2014
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division, Companies Court) to Court of Appeal
Outcome
Appeal allowed
Legal Topics
Recognition of Foreign Trusts, Applicable Law to Trusts, Void Dispositions in Insolvency, Forum Non Conveniens, Cross Border Insolvency, Transfer of Shares in Civil Law Jurisdictions
Insolvency Trusts and Equity Conflict of Laws Recognition of Foreign Trusts Applicable Law to Trusts Void Dispositions in Insolvency Forum Non Conveniens Cross Border Insolvency +1 more

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Parties

Stephen John Akers

Claimant/appellant

Mark Byers

Claimant/appellant

Hugh Dickson

Claimant/appellant

Saad Investments Company Limited (in liquidation)

Claimant/appellant

Samba Financial Group

Defendant/respondent

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division, Companies Court) to Court of Appeal

Legal Issues

  1. 1 Whether the Hague Trusts Convention (as enacted by the Recognition of Trusts Act 1987) applies to trusts of shares registered in civil law countries that do not recognise trusts or division of legal and beneficial ownership.
  2. 2 Whether Article 4 of the Convention excludes the application of the Convention to the transfer of beneficial interests in shares under declarations of trust.
  3. 3 Whether Article 15 of the Convention requires the application of mandatory rules of the lex situs (Saudi Arabian law) to the transfer of beneficial interests in shares.

Ratio Decidendi

Article 4 of the Hague Trusts Convention does not exclude the application of the Convention to declarations of trust where the settlor already owns the property and declares himself trustee; the Convention applies to the validity and effects of such trusts. The lex situs (Saudi Arabian law) governs only whether the property can be alienated at all, not the validity or effects of the trust. Article 15 does not mandate the application of Saudi Arabian law to the transfer of beneficial interests in this context without clear evidence that the relevant rules are mandatory. The issues of governing law and the application of Article 15 could not properly be determined on a summary or stay...

Court Disposition

Appeal allowed

Orders

  • Stay of proceedings set aside
  • Matter to proceed to trial for determination of the substantive issues