In the TASSARRUF MEVDUATI SEGORTA FONU -v- MERRIL LYNCH BANK AND TRUST COMPANY (CAYMAN) LTD & OTHERS (2011) UKPC 17, the Privy Council, permitted the appointment of an equitable receiver, to exercise the power of revocation of a settlor of a Cayman discretionary trust, so to enable a creditor to procure the execution of such power, and to recover all the settled assets, to satisfy his judgment debt.
Under the trust deed establishing the Cayman trust, the judgment debtor/settlor of the trust, had a power of revocation, which stated:
“ This Trust may be revoked, amended, varied, or altered in any manner, whatsoever from time to time, and at any time, by the Settlor by deed and delivered to the Trustees, provided always that no such revocation, amendment, variation or alteration shall take effect, until actual receipt of such instrument by the Trustees, or with the written consent of the Trustees thereto, if such revocation, amendment, variation or alternation would increase or extend the obligations, liabilities or responsibilities of the Trustees”.
The Privy Council held that:
(i) The powers of revocation of a settlor of a discretionary trust, are such, that in equity, in the circumstances of a case like the one under consideration, the settlor/judgment debtor, can be regarded as having rights tantamount to ownership.
(ii) The interests of justice require that an order be made in order to make effective the judgment of the Cayman Court, recognizing and enforcing the Turkish judgment.
NOTE: If the settlor has been made bankrupt, the power of revocation of the trust, will automatically vest in the trustee in bankruptcy.
For further information on this topic please contact Mr. Soteris Pittas at SOTERIS PITTAS & CO LLC, by telephone (+357 25 028460) or by fax (+357 25 028461) or by e-mail (email@example.com).
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