Exploring Offshore Litigation

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Exploring Offshore Litigation is a captivating podcast series containing audio of written blog content that dives deep into the intriguing world of offshore litigation, including the BVI and Cayman. Each episode sails through complex legal waters, bringing you up-to-date analysis of recent high-stakes cases and expert commentary from the leading minds in this specialised field. Our episodes demystify legal jargon and break down complex cases to make them accessible to all. Harneys, an international law firm with entrepreneurial thinking, brings each episode to you.

  1. 4 hr ago

    Time is not up: BVI court rules PRC limitation is procedural in Mihot liquidation Background The four grounds of opposition Suspicion is not a dispute The limitation point Abuse of process The liquidators' powers Conclusion

    Time-barred in the PRC, but not in the BVI: Lead Express v Mihot Investments The BVI Commercial Court has decided, for the first time, that a foreign limitation rule which bars the remedy but does not extinguish the right is procedural, so the BVI court applies its own six-year limitation period instead. In Lead Express Ltd v Mihot Investments Ltd, Mithani J appointed liquidators over a BVI company owing HK$60 million under PRC-law loans, even though the three-year PRC limitation period had expired before demand was made. The decision is significant for creditors of the many BVI companies used by PRC individuals and businesses to hold assets. It confirms that an expired PRC limitation period will not, by itself, stop a creditor from pursuing a BVI liquidation, provided the debt is still within time under BVI law. Mihot Investments Limited is a BVI company. Its main asset is an Airbus A318 Elite private jet, which was arrested in Hong Kong in early February 2026. Under three loan agreements made in 2020 and 2021, Madam Chu Lam Yiu lent Mihot a total of HK$60 million (about US$7.69 million), each loan for one year at 4% interest. The loans fell due between October 2021 and October 2022. None of the money was repaid. On 10 February 2026, Madam Chu assigned the loans to Lead Express Limited, a company set up the previous month for the sole purpose of bringing the application. Lead Express served notice of the assignment and a demand for payment that same day. The next day, Mihot, acting through Mr Li Jie, its sole shareholder and then sole director, acknowledged the assignment and said it could not pay. The application to appoint liquidators was issued on 13 February 2026. The opposition came from an unexpected direction. Chengdu Huan Hua Yi Technology Company Limited, a PRC company, holds a PRC judgment against Mr Li personally for more than US$20 million. Chengdu is not a creditor of Mihot. On its application, the court appointed receivers over Mr Li's share in Mihot. The receivers appointed additional directors, who then removed Mr Li from the board and took up the fight against the liquidation application. Mihot said the debt was disputed in good faith on substantial grounds, and put forward four arguments: 1. Identity of the debtor: a Hong Kong company with the same name, also owned by Mr Li, might have been the real borrower. 2. Limitation: the debt was time-barred under PRC law. 3. The assignment: Madam Chu may not have had the mental capacity to sign it. 4. Abuse of process: the application was a device to help Mr Li escape enforcement by Chengdu. None of them succeeded, either individually or taken together. On the identity point, Mihot never actually said that the Hong Kong company was the borrower. Its position was only that it could not accept that the bank account was its own. The judge regarded that as a non-admission rather than a dispute, and made the point that suspicion is not a prima facie case. All of the evidence pointed to the BVI company. The loan agreements named it as borrower, the remittance records showed the money going into its account, and the bank confirmed by email that the account holder was registered in the BVI under Mihot's own company number. Mihot also owned the jet that the loans had been used to buy. Mihot criticised the font and signature block of the bank's email, but the judge said those criticisms came nowhere near showing that the email was not genuine. In his words, a company that says a document from its own bank, identifying its own account by its own registration number, is not genuine "must do more than comment on its typography". The challenge to Madam Chu's capacity was not successful. Mihot had dropped an earlier allegation of forgery, and the capacity point rested entirely on second-hand hearsay from an unnamed intermediary, passed on by Chengdu. On the other side, Madam Chu had travelled to Japan and made an affirmation before a Tokyo notary confirming that she signed the d...

  2. 5 days ago

    No disguise: Cayman Islands Court sends redemption claim to Hong Kong arbitration The decision in brief Practical takeaways Comment

    In a recent decision of the Grand Court of the Cayman Islands, a US$87 million claim for "specific performance" of share redemption rights was found to be what it really was: a claim for money, caught by a Hong Kong arbitration clause. The action was stayed. Investors and companies in Asia involved in redemption disputes should take note. Calling a payment claim something else will not take it outside an arbitration agreement, and wording that lets parties go to court for certain relief may be far narrower than it looks. In TB MGMT LLC v Taibang Biological Ltd, the Plaintiffs were holding vehicles through which Joseph Chow held shares in Taibang, a Cayman Islands company. Mr Chow was removed as chairman in December 2024. The Plaintiffs said this was without "Cause", which entitled them to have Taibang redeem their shares at fair market value. Taibang said he was removed for Cause, so no redemption right arose. The shareholders' agreement provided for HKIAC arbitration in Hong Kong. It also allowed either party to seek "an injunction, temporary restraining order or other equitable relief" in court. The Plaintiffs relied on that wording and sued in the Grand Court for specific performance of the redemption provisions, asking to be paid over US$87 million. Three days later, Taibang began the arbitration. It then applied to stay the Cayman Islands action. Justice Doyle granted a mandatory stay under section 4 of the Foreign Arbitral Awards Enforcement Act. The real dispute was whether Mr Chow had been removed without Cause. The specific performance claim was held to be "entirely artificial and a mere device" to get around the arbitration clause. Even if it had been genuine, the court-relief wording only covered interim relief "enjoining" a breach, not a full claim to be paid. An argument that Taibang had waived arbitration also failed, and the judge said he would have granted a discretionary stay in any event. The Plaintiffs, whose attorneys had come off the record, did not attend the hearing and were ordered to pay Taibang's costs. Redemption and put rights in Cayman Islands companies backed by PRC and Hong Kong investors are often paired with an arbitration clause in the shareholders' agreement. For anyone holding or facing those rights, five points stand out. 1. Substance wins over form: The Court will look past the label to the real dispute. If what you are really after is the redemption price, assume the claim will be treated as a claim for money, however you plead it. 2. Read the court-relief wording closely: Here, a right to seek "an injunction, temporary restraining order or other equitable relief" in court was confined to genuine interim relief. It did not open the door to a full payment claim. Nor did the clause heading, "Specific Performance", help, because the agreement said headings were not to be used in interpreting it. If you want redemption claims heard in court, say so clearly. 3. The articles may not offer a way out: The redemption rights and the definition of Cause appeared in both the shareholders' agreement and the articles, but only the shareholders' agreement had an arbitration clause. The Plaintiffs argued that their claims under the articles did not need to be arbitrated. That did not help them, because the substance of the dispute still fell within the arbitration agreement. The simplest fix at the drafting stage is to make the dispute resolution provisions match. 4. Do not go quiet: A company can only appear in the Grand Court through an attorney. If its attorneys come off the record and it does nothing, the Court can carry on without it and order it to pay costs. The judge described the approach taken by the Plaintiffs as an "unhelpful and potentially abusive strategy of non-engagement" and remarked that burying your head in the sand "is rarely, if ever, a good litigation tactic". 5. Move quickly: Taibang started its arbitration three days after the writ was issued and applied for a stay before fili...

  3. 3 Nov

    Anchors away: BVI Court of Appeal rejects improper use of anchor defendants Background A high bar for appellate interference The anchor must hold Mere incorporation in the BVI is not sufficient Failure to give full and frank disclosure Key takeaways

    In the recent decision of BTA Bank v Mamesh, the BVI Court of Appeal rejected BTA Bank's attempt to use restored BVI shell companies as anchor defendants for an alleged US$230 million fraud claim against foreign defendants, and upheld the order setting aside permission to serve out. The decision, which turns largely on appellate deference to the judge's evaluative assessment, illustrates that a claimant relying on the necessary or proper party gateway must show that there is genuine utility in the BVI Court trying the claim against the anchor defendant(s). It is also a stark reminder of the consequences of failing to give full and frank disclosure on an ex parte service out application. BTA Bank, a Kazakhstani financial institution, alleges that it was the victim of a fraudulent scheme orchestrated by its former chairman and employees between around 2005 and 2009, involving around 100 letters of credit to fund purported commodity sales, with the money diverted through offshore special purpose vehicles and on to foreign entities. Some of those vehicles were BVI companies. In September 2021, the bank issued proceedings against 54 defendants in the BVI after restoring eight BVI companies that had been struck off and dissolved years earlier. In May 2022, it obtained permission ex parte to serve the foreign defendants out of the jurisdiction, relying principally on the necessary or proper party gateway, with the BVI companies as the anchor defendants. The BVI companies never engaged with the claim and were struck off again in 2022 and 2023. Several foreign defendants applied to set aside the permission to serve out and Justice Wallbank granted the application. He found that (i) even assuming there was a real issue between the bank and the BVI companies, it was not reasonable for the court to try it; (ii) the company gateway was not engaged; (iii) the BVI was not clearly or distinctly the appropriate forum; and (iv) the bank had breached its duty of full and frank disclosure in ways that were not innocent. The bank appealed and argued that the judge was wrong in (i) finding that there was no real issue that was reasonable for the court to try; (ii) deciding that the BVI was not clearly and distinctly the most appropriate forum; and (iii) concluding that there was a breach of the duty of full and frank disclosure. The Court of Appeal dismissed the bank's appeal on all grounds. As a starting point, the Court confirmed that, as an appellate court, it ought to be slow to interfere with the judge's decision where the appeal involves an evaluation of the facts and law and exercise of discretion. Applying the principles set out in its decision in Dufour v Helenair and the English Court of Appeal's decision in Re Sprintroom, the Court reaffirmed that it would only interfere if the judge's decision could be shown to be wrong by reason of some identifiable flaw in his treatment of the question to be decided, such as a gap in logic, a lack of consistency or a failure to consider a material factor, which undermines the cogency of the conclusion. In recognising the appellate court's deference to the evaluative assessment undertaken in the court below, the Court also gave weight to the fact that the same judge had heard both the ex parte application and the set-aside applications. The Court of Appeal disagreed with the bank's argument that the judge had misapplied the gateway. Relying on the Privy Council's decisions in Nilon Ltd v Royal Westminster Investments SA and Altimo Holdings and Investment Ltd v Kyrgyz Mobile Tel Ltd, the Court restated the principles, including the following, applicable to the necessary or proper party gateway: Caution must always be exercised in bringing foreign defendants within the jurisdiction under that gateway, and it should never become the practice to bring them in as a matter of course on the ground that the only alternative requires more than one suit in more than one jurisdiction. The fact that an anchor d...

  4. 29 Oct

    A filter, not a formality: BVI derivative action leave after Dekel Derivative action or unfair prejudice? The leave requirement under section 184C of the BCA A realistic prospect of success Practical lessons Comment

    A BVI derivative action lets a minority shareholder sue on behalf of the company when those in control will not, but leave is far from automatic. The Court of Appeal's recent decision in Dekel v Clerkenwell Lifestyle Ltd is a timely reminder of how high the bar is. It also provides a good opportunity to recap how the derivative route differs from the more familiar unfair prejudice claim. Minority shareholders who are unhappy with how a BVI company is run usually have two main statutory options under the BVI Business Companies Act, Revised Edition 2020 (BCA). An unfair prejudice claim (governed by s184I of the BCA) is a personal claim: the shareholder complains that the company's affairs have been conducted in a way that is unfairly prejudicial to them as a member, and the court has wide powers to remedy that, often by ordering a buy-out. A derivative action is different. The claim belongs to the company, the shareholder is simply the vehicle for bringing it, and any recovery goes to the company rather than to the shareholder personally. That distinction matters. Where directors have caused loss to the company itself, for example through breaches of duty, conflicted transactions or diverting value to connected parties, the shareholder's own loss will usually just reflect the company's loss. The reflective loss rule, as explained in the UK Supreme Court case of Sevilleja v Marex, generally prevents a shareholder recovering that loss in its own name. In that situation the derivative action is often the only way to get the claim in front of a court. A shareholder cannot bring a derivative claim without the court's leave under section 184C of the BCA. The power is discretionary and the court must consider a series of statutory factors, including: whether the member is acting in good faith; whether the proceedings are in the company's interests taking account of the views of the company's directors on commercial matters; whether the proceedings are likely to succeed; the costs of the proceedings compared with the relief likely to be obtained; and whether an alternative remedy to the derivative claim is available. The availability of an alternative remedy is where the two routes meet. If the shareholder's complaint can properly be addressed through an unfair prejudice claim, that may weigh against leave for a derivative action, although the Court of Appeal in Dekel did not rule on this point. The judge did, however, take the parallel English proceedings and the availability of alternative remedies into account. Although there is no strict merits threshold, the court must be satisfied, on an evaluative assessment of the evidence, that the proposed claim has a realistic prospect of success. The Court of Appeal endorsed the judge's approach. In Dekel, a shareholder in a BVI holding company that had raised investor funds for a failed London hotel development sought leave to sue directors, service providers and connected lenders in proceedings in England and Wales. He had invested about £4 million, of which about £2.8 million was lost. The BVI Commercial Court refused leave, and the Court of Appeal upheld that decision. The decision in Dekel gives several practical lessons for shareholders considering this route: Dishonesty needs evidence. Dishonesty is rarely proved directly at an early stage, but conflicts of interest, related-party loans and expensive financing will often be consistent with commercial decisions that went wrong. Without primary facts capable of supporting an inference of dishonesty, the claim will not get off the ground. A failed project is not negligence. The shareholder must show why decisions were negligent when they were made, not just unsuccessful in hindsight, and link the breach to identifiable loss. Check the company's articles. An indemnity in the articles that mirrors section 132 of the BCA can give directors a broad defence to non-fraudulent claims, including claims brought derivatively in the company's na...

  5. 20 Oct

    Disclosure and collateral use lessons for litigants

    The English High Court in Bourlakova v Estate of Bourlakov has confirmed that an order to disclose arbitral material is to be honoured even where the arbitral tribunal has refused permission to do so. The judgment is also a timely reminder that arbitral confidentiality is not a trump card, and that collateral use must be justified document by document. The case forms part of long-running litigation over assets of the late Oleg Bourlakov. Edelweiss, one of the defendants, had promised the English court not to deal with its assets outside the ordinary course of business. When Edelweiss faced a Moscow arbitration claim of over US$101m, the English court ordered it to give the Bourlakovas documents from the arbitration, including a recording or transcript of the main hearing, so that the undertaking could be policed. The arbitral claim was dismissed in January 2026, although the claimant in those proceedings sought to challenge the award. Meanwhile, Mr Korovin, who had given evidence for the claimant in that arbitration, then commenced a new arbitration claiming around US$272.4m from Hermitage One, one of the claimants in the English proceedings. Hermitage One said the new claim bore striking similarities to the first. A number of applications ensued. The order required Edelweiss to ask the arbitral tribunal for permission to record the hearing and to provide a copy of the recording. The tribunal had already allowed recording but refused permission to disclose it, so Edelweiss argued that its obligation to disclose fell away. The English court disagreed: Construed objectively, the order imposed two separate obligations. The word "and" was disjunctive and the duty to disclose was not subject to the tribunal's permission. There was no ambiguity to resolve in Edelweiss's favour, and the context of the original hearing confirmed that permission was only ever in issue for making the recording. There was no material change of circumstances which would justify variation of the disclosure order. The order existed to protect Edelweiss's assets and, while the arbitration was ongoing, the threat remained. The tribunal's refusals were not sufficiently material. The apparent refusal of Edelweiss's Russian lawyers to hand over the recording was no answer without cogent evidence that they were entitled to refuse to provide a copy to their own client. Edelweiss also sought an order that the documents provided under the disclosure order be deleted by the Bourlakovas. The court adjourned that application. The court considered that deletion is best considered once the arbitration has ended, as the documents may become public or fall to be disclosed in the English proceedings. Hermitage One sought permission to use the disclosed material to defend the Korovin arbitration. Permission requires special circumstances giving a cogent reason to release the party from the collateral use restriction. Edelweiss wanted permission limited to three documents. The court considered: Cogent reasons existed. The Korovin arbitration claimed very substantial sums, there were very substantial similarities between the arbitrations and it would be relevant to see what Mr Korovin and the other witnesses did and did not say in the first arbitration. Arbitral confidentiality was relevant but not of great weight. Both sides accepted the first arbitration was bogus, its claimant was unlikely to complain about further use, and there was a real prospect of the documents being aired in open court in Russia. Separately, the way both claims were made – under English law, in foreign arbitral tribunals, long after the relevant limitation period would have expired and without prior warning – heightened the need for the tribunal in the new arbitration to have access to all of the relevant material. Without deciding whether the Bourlakovas had breached their undertaking on use, the court held that the alleged breaches were no reason to penalise a separate entity, Hermitage One. Ther...

  6. 9 Oct

    An expanded BVI Commercial Court: strengthening the infrastructure for international disputes A Commercial Court built around international disputes Why does this matter? The expanded Court is only part of the story What should clients take from the dev

    The British Virgin Islands is set to expand its specialist commercial litigation offering. At its meeting on 19 August 2026, Cabinet approved the expansion, together with funding through to 2029 for an additional Commercial Judge, supporting court administration staff and commercial rental space. It is expected this expanded Court will commence hearing matters in the fourth quarter of 2026. The announcement reflects a broader investment in the capacity and infrastructure of the BVI's commercial justice system at a time when the disputes arising from the jurisdiction's role as an international financial centre are increasingly complex, cross-border and time-sensitive. The BVI Commercial Court was established in 2009 and has developed into a specialist forum for commercial disputes. The Court has jurisdiction to hear commercial matters across the nine member jurisdictions of the ECSC, although its work is predominantly BVI-focused. Claims ordinarily falling within its jurisdiction have a minimum value of US$500,000, with many matters significantly exceeding that threshold. The nature of the Court's work reflects the international use of BVI corporate structures. The ECSC has itself described the BVI Commercial Court's caseload as consisting of "high value, complex, cross-border litigation", with particular concentrations in company, insolvency, trusts, asset recovery and enforcement matters. Its recruitment materials also recognise the wider significance of the Court's work, noting that its decisions are influential in other common law jurisdictions. For a dispute involving a BVI company, the issues rarely stop at the BVI's borders. Parties, assets, witnesses, financing arrangements and related proceedings may be spread across multiple jurisdictions. The Court must therefore be equipped not only to determine substantive commercial disputes, but also to deal efficiently with the procedural and interim issues that commonly arise in international litigation. Commercial proceedings may require urgent injunctive relief, applications concerning assets located overseas, service outside the jurisdiction, evidence from foreign witnesses, recognition of foreign insolvency officeholders or coordination with proceedings in another jurisdiction. The addition of an expanded Commercial Court will provide further capacity to support these objectives. The Cabinet announcement is also notable because the investment extends beyond the Judge, Court space and staff. In addition, the Government's 2026 budget programme identifies a number of technological developments intended to improve the wider court experience. These include the continued development of the electronic case management platform, additional training for Judges and support staff, voice-to-text technology for Court reporters and work towards an improved electronic search facility for Registry records. For businesses and investors using BVI structures, access to the BVI's specialist Commercial Court which is familiar with complex corporate, insolvency and cross-border issues can be an important consideration. An expanded Commercial Court, together with investment in court administration, technology and physical infrastructure, represents a further strengthening of that framework and ensures the BVI will continue to be a significant centre for the resolution of international commercial disputes.

  7. 2 Oct

    Freezing orders, delay and proprietary injunctions: key lessons from Alliance Petrochemical v Mazzagatti Background The WWFO application The applicable principles The impact of delay API's three new grounds: all rejected The proprietary injunction A BVI

    The English Commercial Court has confirmed that delay in seeking a freezing order and proprietary injunction can be fatal to the application. In Alliance Petrochemical Investment (Singapore) Pte Ltd v Mazzagatti , the Court refused API's application for a worldwide freezing order (WWFO) and a proprietary injunction after Alliance Petrochemical Investment (Singapore) Pte Ltd (API) waited approximately 17 months to apply and did not produce new evidence of dissipation. The judgment arose from allegations that at least €143 million had been misappropriated from API, a Singapore-incorporated petrochemical company, and its subsidiary, Alliance Petrochemicals Trading LLC (APT). API alleged that its former CEO, Mr Mazzagatti, and his associate, Mr Dixit, misappropriated at least €143,808,798.66 from API and APT. It said the money was diverted through customer payments, profits routed through Napag IT Limited, and direct withdrawals from API and APT's bank accounts. API alleged that a substantial portion of the misappropriated funds financed the acquisition of RockRose Energy plc by Viaro Energy Limited, a company indirectly 96.4 per cent owned by Mr Mazzagatti. API also alleged that Viaro Energy relied on forged loan facility documents, purportedly from two Abu Dhabi individuals for £250 million each (the Abu Dhabi Loan Facilities), to present the acquisition as having legitimate financing. The court refused API's application for a WWFO, which sought to restrain assets up to €160 million. API had established serious issues to be tried. The decisive question was whether there was a real risk of unjustified dissipation of assets. The test for a freezing injunction is well established. The applicant must show: 1. a good arguable case/serious issue to be tried; 2. a real risk, judged objectively, that a future judgment would not be met because of an unjustified dissipation of assets; and 3. that it would be just and convenient to grant the order. The court also noted, citing Holyoake v Candy, that such orders "have the nuclear effect of prohibiting the affected party from dealing with his assets". The court's refusal turned principally on delay. API first requested freezing undertakings from the Defendants in a letter dated 8 August 2024, the day after the Claim Form was issued. The Defendants declined to provide the undertakings, characterising API's claimed risk of dissipation as "risible". Approximately 17 months later, API issued its WWFO application in January 2026. During that period, API's principal allegations of fraud and forgery had not materially changed. Drawing on the principles in Madoff Securities International Ltd v Raven, the court acknowledged that delay alone is not dispositive but held that it can be "a powerful consideration". Critically, the court required API to demonstrate new evidence of dissipation risk that had emerged since the delay. API relied on three developments to justify the timing of its application: Viaro Investment Limited's financial vulnerability: API's expert suggested that Viaro Investment, Viaro Energy and RockRose were financially vulnerable. The court found that API's case "conflates assets belonging to the Defendants, on the one hand, and assets belonging to the Viaro Group, on the other" and that transactions by the companies did not amount to dissipation by Mr Mazzagatti personally. The TAQA Court of Appeal decision: The court held that this did not suggest a propensity to strip assets, noting that the first instance findings favourable to Mr Mazzagatti "have not been disturbed by the Court of Appeal". Excessive remuneration: Whilst acknowledging that the Defendants' salaries were "undoubtedly extremely generous" (Mr Mazzagatti received £68.4 million and Mr Dixit £20.1 million between 2022 and 2024), the court found that Mr Mazzagatti's remuneration was contractually linked to a fixed percentage of EBITDA, fully disclosed in company accounts, and made in the ordinary course of business. ...

  8. 23 Sept

    When Irrevocable Becomes Revocable: Jersey Royal Court Blesses Reversal of Settlor Exclusion Following Abolition of the Non-Dom Regime Background The Article 47 variation The B Trust The Article 51 Blessing Comment

    In In the Matter of the Affinity Trust and the V Trust, the Jersey Royal Court approved the variation of a discretionary trust to reverse the irrevocable exclusion of its settlor as a beneficiary and blessed the trustee's decisions to re-admit the settlor and distribute approximately £4.8 million to him. The decision addresses the application of Articles 47 and 51 of the Trusts (Jersey) Law 1984 in the context of trust restructurings prompted by the abolition of the UK Non-Dom regime. The V Trust was a Jersey discretionary trust established in 2001. In 2017, the Settlor was irrevocably excluded as a beneficiary on English tax advice, the objective being to prevent the Trust from being treated as "settlor interested" by HMRC. However, the exclusion proved ineffective as the Settlor's wife had not been simultaneously excluded, and her potential addition as a beneficiary was sufficient to attribute Trust income to the Settlor for UK tax purposes. Following the abolition of the Non-Dom regime from 6 April 2025, annual UK tax liabilities were projected to reach "tens or hundreds of thousands of pounds", with substantial inheritance tax charges arising every ten years. The Settlor therefore asked the trustee to apply to the Royal Court to reverse his exclusion, re-admit him as a beneficiary, and distribute approximately £4.8 million to him, which he would then gift to his four adult children. The proposed distribution was structured to take advantage of the UK's Temporary Repatriation Facility (TRF), which permits distributions at a 12% rate if made by 5 April 2027. The Court was asked to approve the variation of the Trust under Article 47 of the Trusts (Jersey) Law 1984 on behalf of the minor and unborn beneficiaries, so as to reverse the Settlor's irrevocable exclusion. Article 47 empowers the court to approve, on behalf of persons unable to consent, any arrangement varying or revoking the terms of a trust or enlarging the trustee's powers of management and administration. The Court followed previous decisions, confirming that its understanding of the word "arrangement" has a wide construction, so long as it benefits to some extent those persons who cannot consent, citing Mubarik v Mubarik [2008]. The Court noted that this approach had already been taken to revoke a settlor's irrevocable exclusion from the class of beneficiaries, most recently in IQEQ (Jersey) Limited Re B Trust [2024]. On the question of "benefit", the Court also applied the broad principles of construction endorsed in Re Weston's Settlements [1969], in which Lord Denning MR observed that "nearly every variation" before the court has tax avoidance as its principal object and "no one has ever suggested that this is undesirable or contrary to public policy." The Court acknowledged previous warnings against "overt tax avoidance" and noted that, where a variation affects the irrevocable exercise of a power, it will give "particularly close examination" to the underlying motivation. It held that legitimate tax planning would usually benefit those who cannot look to their own interests, and that this threshold was therefore met on the facts. The Court ordered the variation so as to render the Settlor's exclusion revocable. In reaching its decision, the Court assessed the balance of risk by reference to the points raised by the Court in The B Trust [2024]: why would a settlor not be expected to provide for their family if the assets are appointed back to them; and what would the Court say to the minor and unborn beneficiaries if it refused the variation? The Court in the present case adopted the same reasoning as in The B Trust. Without the proposed arrangement, annual tax charges would steadily drain the Trust's assets, and the Settlor's additional US tax position further constrained the trustee's ability to make tax-efficient appointments. The Settlor could reasonably be expected to pass the wealth to the next generation, an expectation supported by the Trustee, th...

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Exploring Offshore Litigation is a captivating podcast series containing audio of written blog content that dives deep into the intriguing world of offshore litigation, including the BVI and Cayman. Each episode sails through complex legal waters, bringing you up-to-date analysis of recent high-stakes cases and expert commentary from the leading minds in this specialised field. Our episodes demystify legal jargon and break down complex cases to make them accessible to all. Harneys, an international law firm with entrepreneurial thinking, brings each episode to you.

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