Sunday, March 17, 2013

Trust - Issues on 'Arbitration'


Nov 17

Thoughts to Share:
What appears to have been covered at some length is the view the domestic court has taken.In doing so, the impression given is that some of the rules on international arbitration; which , to one's understanding are to be found in what is referred to as the Model Law. Even so, one is not clear, hence requires to be elaborated, as to how far / to what extent any such view of a domestic court could be effectively and finally enforced against a disputing party who is an alien to the country over which the domestic court has jurisdiction. In other words, the grave doubt is centered on the more serious issue often faced with; that is, to be precise, the concept , replete with complicity- comprehensively referred to as "extra territorial jurisdiction".
May be, any law expert well /reasonably versed and exposed to principles governing international arbitration, more particularly with personal experience of practice in international court (s) could offhand  throw some light, even though not any firm opinion.
Believe to have made self clear on the point of genuine doubt likely to arise in the mind of anyone else similarly placed.
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Aug 30


Arbitration Clauses in Trust Deeds

Random thoughts / Posers:

As a general proposition, one could validly urge, the very concept  of 'arbitration' has the inherently essential  objective of resolving any dispute out of / in relation to anything covered in any contract agreement or arrangement of every kind. Trust is one such arrangement . Should that be so, and proceeding on that premise, the posers are:
1. Why any dispute, of whatever type, arising in relation to a trust is not a matter to be first tried and settled only through arbitration, by way of honoring the intention of the author of the trust, as clearly borne out by the very fact that in the Deed there has been an arbitration clause?
2.  Why, then, such a right  to press for an arbitration should , by applying the principles of natural justice, -instead of being bogged down by going into the scope under the statute on arbitration, - not to be regarded to be dependent on facts such as, whether any beneficiary named (or envisaged),  was a minor or major, so as to avoid the controversy of whether or not  he was a 'party'.

Incidentally, none can afford to ignore the sublime wisdom behind the (s)age-old-saying, "LAW IS AN ASS". As such, the point for right-minded legal pundits to consider is this: - Should, in order to simplify and thereby avoid scope for any such possible mind-boggling controversies, and court litigation between trusties and all intended beneficiaries (minor or major, or future off-springs), any author of the trust need to, by way of abundant caution, have the 'arbitration clause' suitably drafted in as comprehensive manner as feasible.

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Useful Extracts :

"Principally, the application was resisted on two grounds: (a) that the beneficiaries were not ‘party’ to the arbitration agreement; and (b) in any event, the arbitration agreement being entered into while the beneficiaries were minor, was void. It was also argued that “parties claiming through a party to arbitration agreement can apply for referring the dispute to arbitration under s. 45”, but this provision applied only with respect to Part II and no such provision was found in Part I of the Act. Reliance was placed on a judgment of the Delhi High Court in the case of Chhaya Shriram v. Deepak Shriram, for the proposition that beneficiaries are not a ‘party’ to an arbitration agreement in a trust deed."

" It is noteworthy that a strong view that trust disputes of this nature are not arbitrable at all, has been put forward by a report of the Trust Law Committee authored by of John Wood, David Brownbill QC and Christopher McCall QC: one of the reasons being that the trust concept itself is the creature of the courts of equity, exercising discretion which can be exercised only by the court: hence, the rights of beneficiaries and trustees can only be validly determined by Courts. In reliance, one can look to the decision,,,,"

" In April 2012, the Trusts Law Committee (Chaired by Sir Peter Gibson) opined that while in principle arbitration of trusts disputes was desirable, new legislation would be needed for this. AN interesting discussion is also available in an article by Toby Graham and Joanna Pool, available here.

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