There have been a number of cases decided recently by offshore Courts (particularly in Jersey and Bermuda), in which the Courts have had to consider the scope of their jurisdiction to determine disputes relating to trusts that are governed by the relevant offshore law, but which have significant international and foreign connections (including, for example, foreign assets, foreign settlors, foreign trustees, and foreign beneficiaries). The issue is an important one, since the outcome of many international disputes, including claims by beneficiaries against trustees, is often impacted by the jurisdiction in which they are determined, with the effect that “forum shopping” and jurisdictional skirmishes are common features in offshore trusts litigation.
In Re A Trust  Bda LR 79, the Supreme Court of Bermuda considered an application for an anti-suit injunction that was brought, and supported, by the trustee and various beneficiaries of a Bermuda law trust, seeking to restrain another beneficiary from pursuing foreign proceedings that he had threatened to bring against the trustee in the foreign jurisdiction where the trustee was domiciled.
The hostile beneficiary had threatened to bring those foreign proceedings for the purpose of seeking the compulsory production of trust documents and information, even though this course of action would be inconsistent with various confidentiality obligations imposed upon the beneficiary, as well as a standard clause in the trust deed that identified the Bermuda court as the proper “forum for administration” of the trust.
In deciding whether or not to grant an anti-suit injunction, the Bermuda court had to consider whether or not the “forum for administration” clause amounted to an exclusive jurisdiction clause, which would bind the hostile beneficiary to the exclusive jurisdiction of the Supreme Court of Bermuda (in the absence of exceptional circumstances).
Chief Justice Kawaley approached the issue with pragmatism. He concluded that the mandatory language of the “forum for administration” clause, taken with the combined choice of (a) Bermuda law as the governing law and (b) the Bermuda court as the forum for administration, “points towards the draftsman's intent that the courts of Bermuda should exclusively determine matters relating to the administration of the trust”. The Court accepted that the foreign proceedings that had been threatened by the hostile beneficiary against the trustee were properly characterised as claims raising matters relating to the administration of the trust, and that they were therefore caught by the clause. The Court therefore granted an anti-suit injunction against the hostile beneficiary, with a view to enforcing the jurisdiction of the Supreme Court of Bermuda.
The same issue has recently been considered by the Royal Court of Jersey, in Crociani v Crociani  JRC 194A. On different facts, the Royal Court did not accept that the claims made by the claimants were covered by an exclusive jurisdiction clause contained in the trust deed under consideration, and therefore dismissed a jurisdictional challenge asserted by the defendants. The Royal Court also concluded, in the alternative, that the circumstances of the case were such that it would not enforce the exclusive jurisdiction clause, even if it had otherwise found that the exclusive jurisdiction clause was applicable to the claimant’s claims.
Although these judgments give some guidance (and comfort) to settlors, beneficiaries, trustees, trustee liability insurers, and draftsmen of offshore trusts that “forum for administration” or exclusive jurisdiction clauses are likely to be upheld and enforced in accordance with their terms, they do illustrate the importance of careful drafting and review of such clauses, as well as similar such clauses (as well as governing law clauses) in any contracts or transactions between trustees and foreign third parties.