Dealing with a lack of beneficiaries - Benjamin Orders in Jersey

The Royal Court of Jersey has recently made a Benjamin Order, by which a Trustee was permitted to distribute the assets of a Jersey Trust to non-beneficiaries on the basis that they were entitled to the assets as a matter of private international law. 

Background to the Application
In the Matter of the Banayou Trust [2019] JRC 078 concerned an application to the Royal Court, seeking its blessing of a decision to distribute the assets of a Jersey Law trust to various countries formed following the dissolution of the Former Socialist Federal Republic of Yugoslavia into five successor states (the Successor States).

The Trust was established in December 1988 as a means by which its only beneficiary (and economic settlor) the National Bank of Yugoslavia (NBY) could meet its various debt obligations. Over the years, various issues had arisen with the administration of the Trust, beginning in the early 1990s, with the establishment of the Successor States. A further issue arose as NBY no longer existed in its original form and the  Instrument of Trust provided for the Trustee only to exercise its dispositive powers on the instruction of NBY. Directions as to the status of NBY and the identity of the beneficiaries of the Trust were given in January 1999, from which point the Trust was administered in accordance with the directions of the Royal Court.

In 2001, the Successor States entered into an agreement regulating the division of assets of the Former Socialist Federal Republic of Yugoslavia. After discussions lasting almost eighteen years, the Successor States finally reached an agreement vis à vis the Trust and a Deed of Appointment and Indemnity was put before Royal Court, for its approval. The Trustee considered the decision to enter into this Deed of Appointment and Indemnity to be momentous, given the long history of uncertainty relating to the beneficial class and the fact that the distribution would appoint out the entirety of the Trust fund (totalling some £9.9million at the date of the hearing).

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JERSEY
Nigel SandersPartnerT +44 (0) 1534 700 862nigel.sanders@walkersglobal.com
Fritha FordSenior AssociateT +44 (0) 1534 700 899fritha.ford@walkersglobal.com