Jeremy Sandelson, Clifford Chance's London litigation head, will soon be the envy of City firms for the second time in less than a year. Having recently wrapped up the Bermuda trust battle over ownership of Baron Thyssen's vast fortune, in which he acted for the Baron's son Heini, he is now preparing to island hop to the Caymans to embark on yet another trust dispute, along with Clifford Chance partner Roger Leese. His latest offshore battle contains just as many colourful characters as the Thyssen litigation and involves equally astronomical sums of loot.
The case has already been running for two decades, meandering its way through Norwegian, Cayman and UK courts – including the Privy Council and the House of Lords – and involving a whole host of law firms.
For some, it may already be a distant memory. But that will change when hordes of litigators converge in the Caymans later this year for the first stage of the final throes of the battle over ownership of an enormous trust, with sums at stake amounting to some £250m.
Among the parties alleging ownership is the Norwegian tax authority, which has already spent millions of pounds of taxpayers' money trying to track down the trust – professionals' fees are likely to exceed the value of the trust, estimated to be between £70m-£100m. Other parties are the considerable but secretive Norwegian shipping company Eikland SA, Cayman family the Monsens, and some trustees of an invalid charity. Aristotle Onassis, long since deceased, allegedly also holds some claim to a portion of the assets and it will not be just his representatives' appearance in court that will cause a stir. Advisers of Canadian law firm Fasken Martineau, which once had 50 of its partners listed as co-defendants, are also expected to pitch up, albeit, according to one source, in a purely “passive role”. Claims against them have subsequently been dropped. When contacted by The Lawyer, one lawyer still acting for Fasken in the claim said he had forgotten why they were sued in the first place, blaming the passage of time.
The saga began in 1982 on the death of Anders Jahre, a Norwegian businessman and philanthropist, who made his money from a vast shipping and whaling company spawned in the early 20th century, and who was once a close friend of Onassis. Subse-quent investigations by the Norwegian revenue authorities into a donation made by Jahre to meet the cost of a building in his home town of Sandefjord led them to suspect that the origins of this money came from offshore accounts.
The revenue tracked the funding of this donation to a Panamanian-registered company the Continental Trust Company (CTC), which at one point in the 1970s had $64m (£40m) in an account in Skandinaviska Enskilda Banken in Stockholm. In the mid-1970s, the money had been transferred from there, through Lazard Brothers, to an unknown destination. As a result, the Norwegian revenue spent eight years – until 1994 – trying to piece together the full picture, while also carrying out a tax assessment on Jahre's assets between 1970 and 1982. This assessment has been unsuccessfully challenged by Jahre's estate.
The revenue's investigations brought it up against merchant bank Lazard, Lord Hugo Kindersley, a former director and executive director of the bank as well as a former director of Brent Walker, and AJ Hardman, a former senior executive now deceased. Hardman had been Kindersley's batman during the Second World War.
It emerged that Kindersley had advised on the running of Continental Foundation – in 1976 the assets of CTC were transferred to this charitable trust – while Lazard's London branch had been CTC's banker. Kindersley and Hardman refused to cooperate with Norway's request for evidence on the grounds of banking confidentiality, but were eventually forced to do so after the House of Lords ruled that the importance of UK courts assisting Norway outweighed confidentiality. Lazards was subsequently also accused of helping to develop a strategy to hide Jahre's assets from Norway's tax authorities. Last year, Lazard agreed to pay a multimillion pound sum to Norway to settle the claim.
In 1990, a year after the Lords action, a new executor was appointed to manage Jahre's estate, a Norwegian solicitor named Even Wahr-Hansen, who, because of this case, has become something of a hero in Norway. On behalf of the Norwegian revenue he launched his worldwide search for the missing money – a task which, including Norway's previous inquiries, took 12 years, a fact which speaks volumes for the amazing secrecy of offshore jurisdictions which refuse to disclose identities of trust beneficiaries.
In 1994, this task effectively came to an end when Wahr-Hansen tracked the missing funds to a Cayman charitable trust, the Aall Foundation, which was set up in 1982, a few months after Jahre's death. The money, which the claimants are seeking to recover in the pending Cayman litigation, are lodged in this foundation. In the same year, Wahr-Hansen lodged a claim in London totalling some $245m (£153m) against 82 defendants, including Lazards and individual partners in Fasken Martineau. Subsequently, Wahr-Hansen withdrew the claim against the lawyers and a settlement was reached with Lazards.
Soon after the lodging of this London claim, competing interests for the money emerged, and a year later, in 1995, it was ruled that the Caymans, rather than the UK, should be the jurisdiction to resolve these claims. Wahr-Hansen claims that the funds were deposited in the Aall Foundation by Jahre, while the family of Norwegian businessman Thorleif Monsen, represented by Clifford Chance and Geoffrey Vos QC of 3 Stone Buildings, who controlled the foundation until his death in 1992, allege the money is theirs. They are up against the little-known shipping company Eikland, which issued a subsequent action claiming ownership of CTC's assets. Eikland's lawyers claim that Jahre took money from it when trading under a different name. Allegedly Jahre was, at one point, an employee and shareholder of Eikland, represented by Cayman firm Ritch and Connolly and Wilberforce barrister Tom Lowe. The trustees of Aall Foundation, represented by Cayman firm Walkers and Ali Malek QC of 3 Verulam Buildings, also lay claim to the money.
Onassis's connection is that he allegedly once had a mistress in Sandefjord in Norway and during this time he got to know Jahre and transferred assets to him. It is unclear how, or if, the Onassis estate will be chasing these, although there are papers in claimant lawyers' bundles concerning the Greek shipping magnate that date back to 1939. One lawyer close to the case said: “Jahre never made a secret of the fact that Onassis was a friend of his and involved in the CTC. Onassis had lived in Sandefjord before World War II and he and Jahre had been business associates. Wahr-Hansen said he didn't believe Onassis had any interest in CTC.”
The Cayman action could not proceed until a technical point about whether the Continental Foundation was a valid charity had been resolved. If it was valid, none of these competing interests would be able to get their hands on the money in the Aall Foundation, to which Continental Foundations assets had been transferred in 1982. It took five years before the Privy Council held it invalid.
The Cayman trial, due to start in October, will determine ownership of the funds in the Aall Foundation. It will undoubtedly throw up sufficiently complex legal points for the trial to run beyond the four months currently set aside. The points will include whether a claim can be brought considering it has been 21 years since Jahre died and 27 years since he allegedly set up the original trust allegedly linked to the Aall Foundation. Some of the documents date back to the start of the Second World War. Wahr-Hansen's involvement in the affair will also raise some judicial eyebrows. Not least about how it is possible that a solicitor who is acting as an executor of someone's estate can possibly act for Norway in its foreign tax claim. Wahr-Hansen, represented by Jones Day Reavis & Pogue and Christopher Nugee QC of Wilberforce Chambers, is also accused by the Aall estate of obtaining confidential documents belonging to the Monsens and the trustees in such a way that it breached Cayman confidentiality laws.
If resolved in Wahr-Hansen's favour, he will, on Norway's behalf, then seek recovery of the hundreds of millions of pounds in alleged unpaid taxes, plus interest.
Whatever the result, the case will continue to run with expensive appeals and costs assessments to take into consideration. It is another marathon for Sandelson and his gang.