A warning to trustees: contracts and personal liability
In the Royal Court of Guernsey case Investec Trust (Guernsey) Ltd & Bayeux Trustees Ltd v Glenalla Properties Ltd and others [Civ 1462/2010], the court was asked to consider the circumstances in which trustees could be personally liable to repay loans obtained in their capacity as a trustee. The court specifically highlighted the importance of using express wording in agreements to ensure that the trustee’s liability is restricted to exactly what was intended.
Investec Trust (Guernsey) and Bayeux Trustees (the trustees) were the former trustees of TDT, a Jersey law trust. While they were trustees of the trust, the trustees entered into deeds of novation in order to assume liabilities for loans owing to four British Virgin Islands (BVI) companies, which were owned by the trust. These loans were not recorded in any formal written agreements. They were unsecured, interest free and repayable on demand. The loans were not intended to constitute corporate borrowing, but rather were intended as intergroup transfers.
The relevant issues arose when the BVI companies were put into liquidation and the companies’ liquidators sought repayment of the loans from the trustees…
Click on the link below to read the rest of the Wragge Lawrence Graham & Co briefing.
News from Wragge Lawrence Graham & Co
News from The Lawyer
Briefings from Wragge Lawrence Graham & Co
In part two of this series, Martin Chitty takes a closer look at what action has been announced and the options open to employers.
Dispute resolution in the UAE: what are the options? Part three — enforcing an arbitration award in the UAE
Different regimes apply in the UAE for enforcing international awards and local awards (i.e. awards made within the UAE).