Foreign Courts’ Invasion Of Jersey Trusts Repelled

On 15 August 2008, the Royal Court of Jersey delivered a landmark judgment regarding the circumstances in which it will enforce or give effect to a foreign court order varying the terms of a Jersey trust.

The decision in In the Matter of the IMK Family Trust (Mubarak v Mubarak) (2008) JRC 136, recently upheld by the Court of Appeal, is a significant development of the case law concerning the enforcement in Jersey of foreign court orders against Jersey trusts.

Mr and Mrs Mubarak established the IMK Family Trust (a discretionary trust governed by Jersey law) in September 1997. Mrs Mubarak was originally a beneficiary under the trust. Under the terms of the trust, Mr Mubarak was granted the power to add and exclude beneficiaries. In 1998, Mr Mubarak exercised this power by removing his wife as a beneficiary and declaring her to be an excluded person. Mrs Mubarak subsequently commenced divorce proceedings against her husband in the English High Court.