A legal case that had been ongoing since 1999 has been solved thanks to the creative solution of a Jersey lawyer.
Advocate Edward Drummond, a Partner at Bedell Cristin, was recently appointed as amicus curiae to assist the Jersey Court on the case.
The matter is centred on a Jersey law trust which was established by the National Bank of Yugoslavia (NBY). After the collapse of Yugoslavia in the 1990s the NBY ceased to exist but the trust assets remained, leaving the trustee with a quandary – who was it holding the money for?
The trustee sought court directions in 1999 and subsequently followed the ‘beneficiary route’ of trying to identify under international law who inherited the debts and assets of the NBY as if they could just be substituted as beneficiaries. 15 years were then spent negotiating the split of the assets among Yugoslavia’s successor states.
Arguably the ‘settlor route’, when the trust fund goes back to the settlor, would have been more appropriate in this case. This would usually have wide-ranging ramifications for the trustee’s duties, but fortunately here NBY was both settlor and beneficiary, so the outcome was the same.
A further problem arose as the initial negotiation took so long that the agreed split took no account of the later division of Serbia and Montenegro or Kosovo’s declaration of independence.
Advocate Drummond’s solution was a novel one; a ‘Benjamin order’ that covered both the beneficiary and settlor routes and made allowance for possible future claims by Montenegro and Kosovo without causing any further delays.
A ‘Benjamin order’ is normally used when a beneficiary is missing presumed dead and allows the trustee to distribute the assets on the footing that the beneficiary is dead. This brings the trust to an end but should the beneficiary reappear they can claim against those who received the distribution, but not the trustee.
David Cadin, managing partner at Bedell Cristin, commented: “Edward has a fantastic ability to find creative solutions to problems which hugely benefits our clients. It is therefore unsurprising that he was able to help in this situation. As a firm we enjoy facing new challenges and finding innovative ways of overcoming them.”