The pension holder had executed a deed agreeing to invest his shareholding in PAS Ltd, a UK company valued at £1 million, in a Guernsey pension scheme in order to gain the tax advantages of an offshore pension.
The case concerned the trustees of the scheme taking action against the pension holder once they had discovered that the shares he had committed to the scheme had been improperly re-registered in the name of the pension-holder and members of his family.
The key defences to the claim included the mis-selling of the tax advantages of the scheme and legal defences such as the trustees, who are Seychelles companies, lacking legal capacity to carry out "trust business" under Seychelles law. These defences failed and the court ordered reimbursement to the trustees of the cash equivalent of the pension asset of £1 million.
Richard Spearman QC, sitting as Deputy Judge of the Chancery Division, gave a ruling on the disputed issue of statutory interpretation of Seychelles company law, an issue on which there was no ruling of the Seychelles courts, and a point of potentially considerable importance to those carrying on international trust business through the vehicle of a Seychelles registered International Business Company.
The circumstances which gave rise to this issue of Seychelles corporate law was the principal employer of the pension scheme who exercised powers to remove the Trustees, a dispute having arisen with the Guernsey-based Trustees then acting.
The new Trustees were two limited companies registered in the Seychelles. Those Seychelles Trustees continued to act as Trustees and, together with other parties, were claimants in the pension case and sought reimbursement to the pension-holder of the value of the shares, which he had wrongly re-registered in his own name. In the course of the litigation, the Defendants discovered that the Seychelles trust companies had a limitation in their Memoranda of Association which precluded them from carrying on “trust business”.
Jason Squire, Dispute Resolution Partner at Ashfords LLP, led the team advising the Trustees, assisted by Associate, Claire Boucher. David Fletcher, of St John's Chamber's Commercial Dispute Resolution Team, represented the claimants at the trial.
This ruling has clarified a point of Seychelles corporate law on which the Seychelles courts have never ruled.