Fighting Firewalls

An examination of two judgments on a conflict between the firewall provisions of Jersey and Cayman trust laws.

Introduction

The Grand Court of the Cayman Islands and the Royal Court of Jersey have recently had to consider the interaction between the firewalls established under sections 90 to 93 of the Cayman Islands Trusts Law (2011 revision) and article 9 of the Trusts (Jersey) Law 1984 (the Jersey Trusts Law), to determine the validity of appointments of assets from a Cayman employee benefit trust (the Cayman trust) to three Jersey employer-financed retirement benefit schemes (the Jersey trusts).

Firewall provisions are a common and important feature of the trusts laws of many offshore jurisdictions. Firewall provisions are aptly named as their purpose is to shield or protect trusts established in such offshore jurisdictions from foreign laws or judgments. The firewall provisions of the Jersey and Cayman trusts laws each require, in essence, that matters