Chellaram and Others v. Chellaram and Others

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ICLR: Chancery Division/1985/CHELLARAM AND OTHERS v. CHELLARAM AND OTHERS [1983 C. No.5697] - [1985] Ch. 409

[1985] Ch. 409

[CHANCERY DIVISION]

CHELLARAM AND OTHERS v. CHELLARAM AND OTHERS [1983 C. No. 5697]

1984 June 14, 15, 18, 19, 20, 21, 22, 25; July 13

Scott J.

Trusts - Appointment of new trustees - Foreign settlements - Indian family settlements - Members of familyresident abroad - Trust assets in Bermuda - Trusts administered in England - Whether court havingdiscretionary jurisdiction to administer settlements

Practice - Stay of proceedings - Jurisdiction - Appointment of new trustees for foreign settlements - Trustsadministered in England - Whether defendants able to show England as forum non conveniens

In 1975 two Indians, who were almost certainly both domiciled in India at the relevant time and werebrothers, made discretionary settlements in favour of other members of the family, some of whom wereresident in India and others resided abroad. The settlements were drawn up in India by an Indian lawyer butwere worded in English and were in a form common for English discretionary settlements. After signature bythe settlors in Singapore and Lagos respectively, the two settlements were kept by solicitors in London. Thetrust assets were shares held by the two settlors in Bermudan companies. The underlying assets were heldby a number of companies situated in many parts of the world, but all of them outside India. Two of theoriginal trustees were permanently resident in England, while the third, who unlike the others was a memberof the family, held a British passport, spent some months every year in England, and maintained a house inLondon available for his use. However, the two non-family trustees were later replaced by other members ofthe family in 1981. The present trustees (the defendants) were all born and domiciled in India, some residedoutside India, and all visited London with some regularity. The value of the trust assets was considerable butno income or capital had ever been distributed to the beneficiaries. Such little administration as there hadbeen had been done in London.

By a writ dated 14 December 1983 the four plaintiffs, members of one branch of the family, sought, inter alia,against the defendant trustees, the removal of the defendants as trustees and the appointment of newtrustees in their place.

On the defendants' motion for a stay of proceedings on the ground either that the English court had nojurisdiction or power to remove and appoint trustees of foreign settlements or that the court in Bombay wasthe forum conveniens: -

Held, (1) that, on the basis that the proper law of the trust was Indian, service of the writ had been effectedon the defendants in England and, therefore, the court had jurisdiction over each defendant in respect of theissues raised in the writ; that the court had jurisdiction to administer a foreign trust, even where the trustfunds were outside the jurisdiction; that the court had power to administer such a trust by ordering its

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[1985] Ch. 409 Page 410

trustees to fulfil their obligations under the trust and power, if necessary, to remove the trustees and appointnew trustees by orders in personam against the existing trustees requiring them to resign and to vest thetrust funds in the new trustees (post, pp.425F - 426D,427A-E,428A-F,432E - 433B).

(2) That, although the court had a discretion to decline jurisdiction, the defendants had failed toshow that the English court was a forum non conveniens and, therefore, the defendants'application for a stay of proceedings would be dismissed (post, pp.433G-H,436G - 437C).

Ewing v. Orr Ewing(1883) 9 App.Cas. 34, H.L.(E.) applied.

Letterstedt v. Broers(1884) 9 App.Cas. 371, P.C., and The Abidin Daver [1984] A.C. 398, H.L.(E.)considered.

The following cases are referred to in the judgment:

Abidin Daver, The[1984] A.C. 398; [1984] 2 W.L.R. 196; [1984] 1 All E.R. 470, H.L.(E.)

Amin Rasheed Shipping Corporation v. Kuwait Insurance Co. [1984] A.C. 50; [1983] 3 W.L.R. 241;[1983] 2 All E.R. 884, H.L.(E.)

Atlantic Star, The[1974] A.C. 436; [1973] 2 W.L.R. 795; [1973] 2 All E.R. 175, H.L.(E.)

Ewing v. Orr Ewing(1883) 9 App.Cas. 34, H.L.(E.)

Kehr, decd., In re[1952] Ch. 26; [1951] 2 All E.R. 812

Ker's Settlement Trusts, In re[1963] Ch. 553; [1963] 2 W.L.R. 1210; [1963] 1 All E.R. 801

Letterstedt v. Broers(1884) 9 App.Cas. 371, P.C.

MacShannon v. Rockware Glass Ltd.[1978] A.C. 795; [1978] 2 W.L.R. 362; [1978] 1 All E.R. 625,H.L.(E.)

Marlborough (Duke of) v. Attorney-General[1945] Ch. 78; [1945] 1 All E.R. 165, C.A.

Pollak's Estate, In re[1937] T.P.D. 91

Trendtex Trading Corporation v. Crdit Suisse[1980] 3 All E.R. 721; [1980] 3 W.L.R. 367; [1980] Q.B.629, C.A.

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Wilks, In re[1935] Ch. 645

The following additional cases were cited in argument:

Baroda (Maharanee of) v. Wildenstein[1972] 2 Q.B. 283; [1972] 2 W.L.R. 1077; [1972] 2 All E.R. 689,C.A.

Bawtree v. Great North Western Central Railway Co. (1898) 14 T.L.R. 448, C.A.

Chamberlain v. Napier(1880) 15 Ch.D. 614

Colt Industries Inc. v. Sarlie[1966] 1 W.L.R. 440; [1966] 1 All E.R. 673, Lyell J. and C.A.

Cook Industries Inc. v. Galliher[1979] Ch. 439; [1978] 3 W.L.R. 637; [1978] 3 All E.R. 945

Courtney, In re, Ex parte Pollard(1838 to 1840). Mont. & C. 239

Ewing v. Orr Ewing(1885) 10 App.Cas. 453, H.L.(Sc.)

Forsyth v. Forsyth[1891] P. 363

Henderson v. Henderson[1967] P. 77

Iveagh v. Inland Revenue Commissioners[1954] Ch. 364; [1954] 2 W.L.R. 494; [1954] 1 All E.R. 609

Jones v. Jones(1894) 30 N.Y.S. 177

Paget's Settlement, In re[1965] 1 W.L.R. 1046; [1965] 1 All E.R. 58

Penn v. Lord Baltimore(1750) 1 Ves.Sen. 444[1985] Ch. 409 Page 411

Perpetual Executors and Trustees Association of Australia Ltd. v. Roberts[1970] V.R. 732

Razelos v. Razelos (No. 2) [1970] 1 W.L.R. 392; [1970] 1 All E.R. 386

St. Pierre v. South American Stores (Gath & Chaves) Ltd. [1936] 1 K.B. 382, C.A.

Toller v. Carteret(1705) 2 Vern. 494

Weckstrom v. Hyson[1966] V.R. 277

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West (Richard) & Partners (Inverness) Ltd. v. Dick[1969] 2 Ch. 424; [1969] 2 W.L.R. 1190; [1969] 1 AllE.R. 943, C.A.

Motion

By a writ and statement of claim dated 14 December 1983, the plaintiffs, Harish ShewakramChellaram, his wife Radhika Chellaram, and his two sons Vishal Harish Chellaram and AshwinHarish Chellaram (minors), sought against the defendants, Lal Lokumal Chellaram, Sham LokumalChellaram, Ram Tahilram Chellaram, Murli Tahilram Chellaram, Hotchand Gopaldas Advani,Lokumal Kishinchand Chellaram, and Pishu Tahilram Chellaram, orders (1) that the defendants doprovide the plaintiffs with copies of, or alternatively permit them to inspect and take copies of, alltrust documents relating to (i) a settlement made by Mohan Shewakram (brother of the first plaintiff)dated 14 February 1975 and (ii) a settlement made about February 1975 by the first plaintiff; (2) anorder that the defendants do provide the plaintiffs with full and proper accounts of both settlementsfrom the dates of their respective creations; (3) an order that the defendants do provide theplaintiffs with, or procure the provision of, (i) accounts of Kayshewak (Bermuda) Ltd., Eskay(Bermuda) Ltd., Kaycee (Bermuda) Ltd. and Chellsons (Bermuda) Ltd., (ii) minutes of generalmeetings thereof, (iii) copies of directors' service contracts relating thereto and (iv) copies of

registers maintained by such companies, in each case from and after 14 February 1975; (4) anorder removing the defendants as trustees and appointing some fit and proper persons to betrustees in their place, (5) further or other relief, and (6) costs.

By a notice of motion dated 11 January 1984, the defendants sought an order under R.S.C., Ord.12, r. 8, and/or the inherent jurisdiction of the court that the writ be set aside; alternatively, that allfurther proceedings in the action be stayed, on the grounds that the action was not a proper actionto be brought in the English courts, and was frivolous, vexatious and an abuse of the process of thecourt.

At the hearing of the motion the defendants indicated that they did not now seek to have the writ setaside, and that they only sought a stay so far as related to the prayer for the removal of trustees

and the appointment of new ones. As to the rest they contended that they had supplied thedocuments sought or appropriate information, and did not challenge any right to additionaldocuments or information if the proceedings were to continue.

The facts are stated in the judgment.

Michael Miller Q.C.and Francis Barlow, for the defendants. Copies of the documents relating to thesettlements, and full and proper accounts of the companies, which the plaintiffs sought in their statement

[1985] Ch. 409 Page 412

of claim, have been supplied. There was never any basis for doubting, subject to jurisdiction, that theplaintiffs were entitled to such relief. The jurisdiction being exercised by the court is in personam and such

relief is proper to be given if the circumstances justify it. But the jurisdiction to remove trustees is in rem.Since both the settlements are Indian and are governed by Indian Law and none of the trust property issituated within the jurisdiction, there is no jurisdiction to remove the trustees in this case.

The defendants contend, alternatively, that the court should not exercise any jurisdiction that it may have. Anorder removing the trustees would be acting in rem, and it is doubtful if the Indian courts would recognisesuch order. There is no sufficient nexus with this country to make the English court the forum conveniens.Accordingly what the defendants seek is an order staying or striking out paragraph (4) of the relief sought,namely the order removing the trustees and appointing fresh ones; see R.S.C., Ord. 12, r. 8(1)(g) and (h).

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The court has no jurisdiction to make such an order, and that claim should be struck out.

The settlements were drafted by an Indian lawyer, Mr. Advani, in Bombay, and executed in Singapore and inLagos. The settlors were both Indian by birth, and their domicile of origin was there. The present trustees are

all Indian born, though they are scattered around the world. As foreign settlements the proper law is Indian.The form of settlement which was used does not point to any particular law as the proper law of thesettlements. English happens to be the language of the courts and of the legal system in India, and the formwould be appropriate equally in Singapore, Bermuda, Nigeria or Hong Kong.

The defendants contend that the situs of administration is irrelevant to the proper law. There is no evidenceof any acts of administration until 1981 - if there had been any such acts, London might well have beenchosen, just as for the appointment of new trustees. The present residence of the trustees is not relevant toany point as to the proper law, but it may be relevant to questions of forum conveniens. Although all thedefendants may be found from time to time in London, that fact does not make the English court theappropriate, as opposed to the convenient, court. There are other beneficiaries who are entitled to be beforethe court and they mostly live in India. The English court should not act without being satisfied that the Indiancourts would recognise its orders. Such complications would not arise if the proceedings were in India.

Similar relief could be obtained under Indian Law, the procedure being similar. It is fairly slow - on theplaintiffs' evidence - from 7 to 10 years, but interlocutory steps are available. The removal of trustees couldbe sought by petition in India. [Reference was made to the Indian Trustee Act of 1882, sections 71, 73, and74.] The English court has no jurisdiction, save in relation to trust property situated within the jurisdiction, andin cases where English law is the proper law of the settlement. If the English court were to assert jurisdictionthere would be serious conflict with the Indian courts under section 71(d) of the Indian Trustee Act 1882.[Reference was made toDuke of Marlborough

[1985] Ch. 409 Page 413

v. Attorney-General[1945] Ch. 78, 83, 85, 88, 89 as to the principles for ascertaining the proper law of thesettlements.]

Direct evidence as to the intention of the parties is not admissible, but it is relevant that they were prepared

by Mr. Advani, an Indian lawyer practising in Bombay. [Reference was made toIveagh v. Inland RevenueCommissioners[1954] Ch. 364, 368, 379 as to the relevant considerations, on the proper law questions.] It istrue that in that case the inference can be drawn that administrative acts were expected to be carried out inLondon, but nevertheless, over all, the proper law must be taken to be the law of India. That being so, theEnglish court should not interfere to appoint trustees, thus acting in rem, bearing in mind that the trustproperty is not within the jurisdiction. The only jurisdiction possessed by the English court in the present caseis an in personam one to require the trustees to comply with their duties under the proper law of thesettlements.

On the question of forum conveniens, seeIn re Ker's Settlement Trusts[1963] Ch. 553;Forsyth v. Forsyth[1891] P. 363; In re Paget's Settlement[1965] 1 W.L.R. 1046;In re Kehr decd. [1952] Ch. 26;Amin RasheedShipping Corporation v. Kuwait Insurance Co. [1984] A.C. 50; The Abidin Daver [1984] A.C. 396; TheAtlantic Star [1974] A.C. 436, 453, 454, 463, 475, 476 and MacShannon v. Rockware Glass Ltd. [1978] A.C.

795, 810, 812, 817, 818, 819, 822, 824, 825 to 829.

The conclusions to be drawn from the above authorities are that first the English court is not the naturalforum, since the settlements are governed by Indian law, and the beneficiaries are Indian all ordinarilyresident in India; secondly, the effectiveness of any order the English court might make is seriously in doubt;would the Indian courts recognise an English order, as being the order of a competent court, and asdischarging the trustees from their obligations; and thirdly, how would the new trustees know that their statuswas accepted by the Indian courts? The Indian Trustee Act 1882 cannot be regarded as conferring anypower on the English court. Any supposed superiority of the English court procedure is irrelevant if, as is

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contended by the defendants, the English court is the wrong court. Delay does arise in the Indian courts butthere can be interlocutory relief. [Reference was made to Dicey & Morris on The Conflict of Laws, 10th ed.(1980), vol. 2, p. 683, rule 121.]

Michael Lyndon-Stanford Q.C. and Nicholas Warren, for the plaintiffs. The High Court has jurisdiction toentertain any action in personam against any person within the jurisdiction, where the proceedings are eitherserved personally or service is accepted on their behalf by a solicitor. In the present case all the defendantswere either served personally or service was duly accepted on their behalf; seeMaharanee of Baroda v.Wildenstein[1972] 2 Q.B. 283 andColt Industries Inc. v. Sarlie[1966] 1 W.L.R. 440 and Ewing v. Orr Ewing(1885) 10 App.Cas. 453.

The court could order the defendants to execute a deed of retirement as trustees, and appoint other trusteesin their place. Such a deed of retirement and appointment of fresh trustees would be an effective instrumentunder the terms of the settlements. The deed would be

[1985] Ch. 409 Page 414

the settlements. But the plaintiffs contend that it is not the proper law of the settlements which is relevant but

the law of the place of administration which governs such issues as the removal of trustees and theappointment of new ones, and in the present case the place of administration is London. InEwing v. OrrEwing, 9 App.Cas. 34, the House of Lords held that English courts had jurisdiction to administer the trusts ofthe will of a testator who died domiciled in Scotland: see per the Earl of Selborne L.C. at pp. 39 et seq., andperLord Blackburn at pp. 45 et seq. This case shows that the courts do have jurisdiction to administerforeign trusts, via in personam orders, even where there is no settled property in England. Where the courtsdo so, presumably the law applied is English. In its "in personam" jurisdiction equity will go to great lengths. Itis not a valid criticism that its "in personam" orders are tantamount to an order in rem: Toller v. Carteret(1705) 2 Vern. 494;Penn v. Lord Baltimore(1750) 1 Ves.Sen. 444;In re Courtney, Ex parte Pollard(1838 to1840) Mont. & C. 239; Razelos v. Razelos (No. 2) [1970] 1 W.L.R. 392;Cook Industries Inc. v. Galliher[1979] Ch. 439;Richard West & Partners (Inverness) v. Dick[1969] 2 Ch. 424 andBawtree v. Great NorthWestern Central Railway Co. (1898) 14 T.L.R. 448.

If a foreign court made an order removing the trustees of an English settlement, the English courts wouldrecognise the order, even if the subject matter of the settlement was English land. [Reference was made toDicey & Morris on The Conflict of Laws, 10th ed., vol. 2, p. 1072, for rule 185 on the conclusiveness offoreign judgments. Cases under the Variation of Trusts Act 1958, such as In re Ker's Settlement Trusts[1963] Ch. 553 andIn re Paget's Settlement[1965] 1 W.L.R. 1046, show that where an English courtassumes jurisdiction, it applies its own law as to administrative powers.] There is no evidence that either theIndian courts or the Bermuda courts would not apply an order of the court in the present case. The principleson which a court exercises its discretion to stay proceedings have been developed through the followingcases:St. Pierre v. South American Stores (Gath & Chaves) Ltd. [1936] 1 K.B. 382; Trendtex TradingCorporation v. Credit Suisse[1980] 3 All E.R. 721; [1980] Q.B. 629 and [1982] A.C. 679; Robert Goff J.'s

judgment at first instance at pp. 733 to 735 is a distillation of the proper principles, as was acknowledged inthe House of Lords in that case; The Atlantic Star [1974] A.C. 436; MacShannon v. Rockware Glass Ltd.[1978] A.C. 795;Amin Rasheed Shipping Corporation v. Kuwait Insurance Co. [1984] A.C. 50 and TheAbidin Daver [1984] A.C. 398. The relative speed with which the case can be brought to trial in England is a

judicial advantage, and this would avoid the great delay there would be in the alternative jurisdiction inBombay.

With regard to the domicile of Harish,Henderson v. Henderson[1967] P. 77, 80, 81, shows that an intentionto return on an indefinite event does not prevent the acquisition of a domicile of choice and the displacementof a domicile of origin.

In support of the contention that the settlements were intended to be administered here, the plaintiffs rely on

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(i) the form of settlement[1985] Ch. 409 Page 415

adopted is English, although it was drawn by Mr. Advani, an Indian lawyer, in Bombay; (ii) the residence ofthe original trustees was principally in England, two of them were permanently resident here; (iii) the

settlements refer to a trust corporation, an English expression, which would not be a term of art in Indian law,and (iv) under the English Law of perpetuities, the settlement is valid.

Either the proper law of the settlement is English, not Indian, or at least the proper law for the administrationof the settlement is English. In Dicey & Morris on The Conflict of Laws 10th ed., vol. 2, p. 683, rule 121 statesthat "The administration of a trust is governed (semble) by the law of its place of administration". In In rePollak's Estate[1937] T.D.P. 91 a testator domiciled in the Transvaal left movable property in England andSouth Africa and elsewhere. He appointed an English bank as executor and left his estate for beneficiaries,most of whom were domiciled in England. Although the will was governed by South African law, the courtheld that the trust was intended to be administered in England; see alsoPerpetual Executors and TrusteesAssociation of Australia Ltd. v. Roberts[1970] V.R. 732. In that case the proper law was chosen by referenceto "the place where the trust was set up". It was also accepted in that case that there could be one properlaw for construing the settlement, and another proper law for the administration. In the present case the

trustees resided in England, the parties evidently contemplated that it would be administered in London, or atleast in accordance with the law of administration in England. Mr. Advani gave evidence that the purpose ofthe settlements was to save Indian estate duty. There is also evidence that Lachmibai's gift to thesettlements was prompted by the same considerations. [Reference was made toWeckstrom v. Hyson[1966]V.R. 277.]

To sum up, (i) if the proper law of the settlements is, as the plaintiffs contend, English law, then section 41 ofthe Trustee Act 1925 would apply; (ii) if the basic proper law of the settlements is, on the other hand, Indian,but the proper law of their administration is English law, then again section 41 would apply; (iii) if the properlaw of the settlements is Indian law, but the English court nevertheless assumes jurisdiction, then casesunder the Variation of Trusts Act 1958 show that the English court has powers to deal with matters, and thusagain section 41 would apply; (iv) alternatively, if the proper law is Indian law, and there is no English statutelaw applicable, the court can nevertheless, under its inherent jurisdiction, make an in personam order against

the defendant trustees, and order that they be removed; (v) propositions (ii), (iii) and (iv) above applywhether or not there are any trust assets in England.

[In further submissions on the proper law, reference was also made toChamberlain v. Napier(1880) 15Ch.D. 614 andJones v. Jones(1894) 30 N.Y.S. 177.] The settlements were made by members of aninternational family, carrying on an international business, which was controlled and administered fromLondon. Similarly trustees resident in England were chosen to administer the settlements here.

The burden of showing that there is some more appropriate jurisdiction than England rests upon thedefendants. It is not certain

[1985] Ch. 409 Page 416

that the Bombay court would even have jurisdiction. There is a conflict of evidence between the experts onIndian law as to whether the Bombay court would itself have any jurisdiction; it is not certain that the Bombaycourt would accept jurisdiction.

Indian law would not regard the Indian courts as having sole jurisdiction; they would recognise the Englishcourt. The opinion expressed by the defendants' expert, Mr. Munim, is not firm. At least it has not beenclearly shown that the English court would not be recognised; see R.S.C., Ord. 12, r. 8.

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The present trustees reside in different parts of the world, viz Hong Kong, Nigeria and the Canary Islands,but they all visit London. There is considerable advantage to the plaintiffs in suing in England, because of theinordinate delays occurring in relation to litigation in Bombay, and the financial pressure on the plaintiffs, dueto the fact that no income is being received from the settlements although they were set up as long ago as1975, and the payments which they formerly received ceased in May 1983, when the disputes first broke out.

Miller Q.C., in reply. It is obvious that an Indian court has jurisdiction to remove trustees of an Indian trust;section 74 of the Indian Trustee Act 1882 does not contradict the expert evidence of Mr. Munim on theresidence of all the defendants. There is no apparent hostility by the trustees towards the plaintiffs. TheEnglish court cannot exercise the statutory power given by section 74 of the Indian Trustee Act 1882. If anorder were made similar to that made in Penn v. Lord Baltimore, 1 Ves.Sen. 444, the foreign court would nothold the transferor to the purported transfer of the trust property. If the English court accepts jurisdiction, itshould only apply Indian law. [References made to Perpetual Executors and Trustees Association ofAustralia Ltd. [1970] V.R. 732 and Jones v. Jones, 30 N.Y.S. 177.] The order here being sought wouldinfringe the sovereignty and jurisdiction of Indian law. There is no authority that the English courts have anypower to appoint trustees of a foreign settlement; the courts of this country would never recognise an orderof a foreign court purporting to remove trustees of an English settlement, and the reason for this is that thestatus of trustee is left to the courts of the proper law.

Cur. adv. vult.

13 July.SCOTT J. read the following judgment. The plaintiffs in this action are beneficiaries under certaindiscretionary settlements of which the defendants are trustees. By specially endorsed writ dated 14December 1983 the plaintiffs sought under paragraphs 1, 2 and 3 of the prayer, orders that the defendantsprovide them with copies of all relevant trust documents, with trust accounts, with accounts of certaincompanies with which the settlements are connected, and with copies of certain other documents. Underparagraph 4 of the prayer the plaintiffs sought an order removing the defendants as trustees of thesettlements and appointing other trustees in their places.

By notice of motion dated 11 January 1984 the defendants sought an order that the writ be set aside or,

alternatively, that all further proceedings in the action be stayed on the grounds that the action was[1985] Ch. 409 Page 417

not proper to be brought in this court and was frivolous, vexatious and an abuse of the process of the court.That application is now before me.

Notwithstanding the wide terms of the relief sought by the notice of motion, Mr. Miller for the defendantsopened the application on the footing that he did not seek to have the writ set aside, and sought a stay of theaction only so far as the prayer for the removal of trustees and the appointment of new trustees wasconcerned. As to the rest, the defendants take the position that since the date of the writ they have madeavailable to the plaintiffs copies of all trust accounts, and have supplied the plaintiffs with all available orappropriate information: if the plaintiffs wish to continue the action in order to obtain additional documents orinformation, or for the purposes of costs, the defendants will not argue against the plaintiffs' rights to do so.

They do, however, contend that the claim for their removal as trustees and for the appointment of others intheir places, should be stayed. This contention of the defendants is based on two alternative grounds. First, itis submitted that the proper law of the settlement is the law of India and that this court has no jurisdiction or,alternatively, no power to remove trustees of foreign settlements and to appoint new ones in their places.Secondly, it is submitted that the issue between the plaintiffs and the defendants has no or no sufficientconnection with this country, that India is the forum conveniens in which the issue should be litigated, and, asa matter of discretion, this court should decline to permit the issue to be litigated here.

Each of these contentions requires that I should carefully consider the circumstances relevant to the

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settlement and to this litigation. The litigation concerns the affairs and fortunes of the Chellaram family, awell-known Bombay trading family. The family trading enterprise was started by the grandfather of the firstplaintiff, one Kishinchand Chellaram. He has been, for many years, deceased. He had three sons:Shewakram, Lokumal and Tahilram. Since the surname of practically everyone involved in the present caseis Chellaram, I hope I will not be thought guilty of any discourtesy if for convenience I refer to the members of

the family simply by their respective given names.

Shewakram died in 1949 and was survived by his widow, Lachmibai, who is now 74 years of age.Shewakram and Lachmibai had two sons: Mohan and Harish the first plaintiff. The second plaintiff, Radhika,is the wife of Harish. They have two children, the third and fourth plaintiffs, both of whom are minors. Mohanis unmarried. I have been told that his capacity to manage his own affairs may be open to doubt. Shewakramand Lachmibai had also daughters who are now married.

Kishinchand's second son, Lokumal, is the sixth defendant. He is now 70 years of age. Lokumal has twosons: namely, Lal and Sham, the first and second defendants.

Kishinchand's third son, Tahilram is now deceased. Tahilram had three sons: namely, Murli the fourthdefendant, Pishu the seventh defendant and Ram, the third defendant.

Following the death of Kishinchand, the family trading business was carried on by his three sons.Shewakram, for a time, left the family business but subsequently returned to it. The business consisted, as to

[1985] Ch. 409 Page 418

part, of trading enterprises carried on within India and, as to part, of trading enterprises carried on outsideIndia. The trading business outside India was carried on in a large number of countries, mainly in the FarEast and in West Africa, and generally in each of these countries through the medium of an operatingcompany incorporated under the laws of the country in question. The shares of the several operatingcompanies were held by a Bermudan holding company, Kaycee (Bermuda) Ltd. There has been no evidencebefore me as to the manner in which the trading enterprise in India was organised.

At the time of his death, Shewakram held a 30 per cent. interest in the Bermudan holding company, andthereby in the family trading enterprises outside India. This 30 per cent. interest was, on his death, inheritedby his widow, Lachmibai. In 1973 the Chellaram family, following some years of discussions, decided toeffect a separation of the trading interests of the Lokumal branch of the family from those of the Tahilrambranch of the family. Accordingly, a new Bermudan company was incorporated, Chellsons (Bermuda) Ltd.("Chellsons"). Kaycee (Bermuda) Ltd. ("Kaycee") was to own the operating companies of the Lokumalbranch; Chellsons was to own the operating companies of the Tahilram branch. Lachmibai decided to retainher 30 per cent. interest in both holding companies. Accordingly, after the division and reorganisation hadbeen effected, Kaycee was owned as to 70 per cent. by Lal and Sham and as to 30 per cent. by Lachmibai:Chellsons was owned as to 70 per cent. by Murli, Pishu and Ram, and as to 30 per cent. by Lachmibai.

At about the same time as this division and reorganisation was finally effected, Lachmibai gave her 30 percent. interest to her two sons, Mohan and Harish. I am not clear whether or not this gift was made before orafter the division. Nothing, however, turns on this. They each became absolutely entitled to a 15 per cent.shareholding in Kaycee and a 15 per cent. shareholding in Chellsons.

At this stage I should describe in a little more detail the location of some of the operating companies. InSingapore there was a Chellsons operating company, K. Chellaram and Sons (Far East) Ltd. This companyhad also a branch in Kuala Lumpur. In Hong Kong there were two Kaycee companies and one Chellsonscompany. Both Kaycee and Chellsons had operating companies in Nigeria. Kaycee had companies in Ghana

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and Sieria Leone. Chellsons had companies in Gambia, Upper Volta and Niger. Both had companies inSpain and Gibraltar. Both also had companies in London incorporated under the Companies Act 1948. TheKaycee London company was K. Lokumal and Sons (London) Ltd. The Chellsons London company was K.Chellaram and Sons (London) Ltd. These London companies served a rather different function from thatserved by the other operating companies. They were used for providing financial and administrative services

to the other members of their respective groups. London served, to some extent, as a post office throughwhich material which needed to be distributed among the group would be sent for that purpose. These werethe groups owned by the Bermudan holding companies in which Harish and Mohan held their shares.

[1985] Ch. 409 Page 419

On 14 February 1975 Mohan and Harish each made a discretionary settlement of his shares in Kaycee andChellsons. These settlements were made on the advice of the fifth defendant, Mr. Advani. Mr. Advani is aneminent lawyer practising in Bombay. He was described to me by Mr. Miller as the doyen of the Bombay bar.He drafted these two settlements. They are in identical terms, save for the class of beneficiaries, and arebroadly in terms with which any practitioner at the Chancery bar in England would be familiar. Eachsettlement was made between the settlor of the one part and three trustees of the other part. The threetrustees were Ram Chellaram, a Mr. K. Rupchand and a Mr. G. R. Bharwani. In Harish's settlement the classof beneficiaries was described as comprising the following: his mother, Lachmibai; his wife, Radhika; his twochildren; his brother, Mohan; the wife and any children of Mohan; the children and remoter issue of the father

and mother of the settlor; the spouses of any of those persons, and the spouses of any adopted child of thesettlor. There were, however, expressly excluded from the class of beneficiary, the settlor, the spouse of thesettlor and the husbands of any female issue of Lachmibai.

The class of beneficiaries under Mohan's settlement is the same, save that Mohan is excluded and Harish isincluded. Accordingly, Harish and Radhika are beneficiaries under Mohan's settlement; Mohan is abeneficiary under Harish's settlement; Lachmibai and Harish's two children are beneficiaries under bothsettlements. In addition, Mohan and Harish's sisters are beneficiaries under both settlements.

The settlements confer on the trustees wide powers to apply income or capital for the benefit of any of therelevant class of beneficiaries, and in each there is an ultimate trust for the issue of the settlor. Eachsettlement contains, in addition, the following relevant provisions: (1) a very wide power of investment of trust

money authorising investment in, inter alia: "property of whatsoever nature and wheresoever situated"; (2) acharging clause for: "any trustee who may be a trust corporation, accountant, and who is a barrister-at-law";(3) a power for the trustees by deed to declare that the settlement shall:

"take effect in accordance with the law of some other place in any part of the world and that the forum for theadministration hereof shall thenceforth be the laws of that place."

Finally, (4) a power of appointment of new trustees vested in: "the trustees or the executors or administratorsor the liquidator of the last surviving trustee."

In Harish's settlement, his address is given as 102, High Street Singapore, and the settlement was signed byhim in Singapore. In Mohan's settlement, his address is given as 54, Marina, Lagos, and the settlement wassigned by him in Lagos. In neither settlement is any address given for any of the three trustees. However,both Mr. Rupchand and Mr. Bharwani were, at the date of the settlements, permanently resident in London.Mr. Rupchand was chairman and Mr. Bharwani was a director of K. Chellaram and Sons (London) Ltd. theChellsons London company.

[1985] Ch. 409 Page 420

There is some dispute between the parties as to the residence at the time of the settlements of the third

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trustee, Ram. In his affidavit he deposes to a residence in Las Palmas, Canary Islands, since 1974.However, it is common ground that he or the Chellsons London company maintained - and still maintains - ahouse in London available for his use, and that he has always spent some months in London each year.Moreover, Ram held, at the date of the settlement, a British passport issued in London on 27 September1972, in which his country of residence is given as England. There is evidence that the settlement signed by

Harish was returned by him, duly signed, to Mr. Advani. It is a fair inference that it was then taken or sent byMr. Advani to London and there signed by the three trustees. I infer that the same process was followed inthe case of Mohan's settlement.

It appears from the evidence that the two settlements were kept in London in the custody of Norton, Rose,Botterell and Roche, solicitors. Each settlement purported to settle the shares of the settlor in Kaycee and inChellsons. The share certificates relating to these shares were at all material times held in Bermuda byBermudan solicitors, Conyers, Dill and Pearman, who acted for the Chellaram family in connection with theBermudan company affairs. By letter dated 25 March 1975 addressed to Conyers, Dill and Pearman, andwritten from London, Harish enclosed a copy of his discretionary settlement and a copy of Mohan'sdiscretionary settlement, but requested that the shares be allowed to remain for the time being registered inthe names of himself and Mohan respectively. He concluded by saying that when it was desired that theshares should be transferred into the names of the trustees of the settlement, Conyers, Dill and Pearman

would be so informed. It is not so stated in the evidence, but I infer that this letter, like the settlements, wasdrafted by Mr. Advani. Accordingly, the trust shares remained vested in the respective settlors.

However, on 22 October 1976 a new Bermudan holding company, Eskay (Bermuda) Ltd. ("Eskay 1"), wasincorporated by Conyers, Dill and Pearman, with an issued share capital of 180,000 shares of BD$2.40each. Of these, 89,998 were transferred to Mohan, and 89,997 to Harish. The five remaining shares wereheld by partners or employees of Conyers, Dill and Pearman, in order to comply with Bermudan law, in trustfor the trustees of the two settlements. The holdings of Mohan and of Harish in Kaycee and Chellsons weretransferred to Eskay 1. In order to document that the new shares in Eskay 1 were subject to the trusts of thesettlements, Mohan signed two letters addressed to the trustees of his settlement: one letter referred to hisKaycee shares; the other to his Chellsons shares. By each letter, Mohan confirmed:

"the shares of Eskay are trust property and that those shares of Eskay registered in my name are being held by me for

the trustees of the settlement."

These two letters were signed by Mohan in London before a notary public on 29 March 1977. Two similarletters to the trustees were signed by Harish in Singapore before a notary public on 24 March 1977. By twoletters dated 7 June 1978, one addressed to the trustees of Mohan's

[1985] Ch. 409 Page 421

settlement, and the other addressed to the trustees of Harish's settlement, Mr. Rupchand and Mr. Bharwanipurported to resign their respective trusteeships. These letters purported to be written from 16/26, BannerStreet, London E.C.1, the offices of the Chellsons London company. To whom they were actually sent isuncertain. They appear to have been left in the custody of Norton, Rose, Botterell and Roche in London.Since no new trustees were appointed in place of the two retiring trustees, it is not clear whether the

retirements were of any legal effect. However, effective deeds of retirement and appointment of trusteeswere made dated 12 May 1981. The parties thereto were Mr. Rupchand and Mr. Bharwani of the first part,Ram of the second part, and Lal, Sham, Murli and Mr. Advani of the third part.

By one of these deeds Lal, Sham, Murli and Mr. Advani were appointed trustees of Harish's settlement jointlywith Ram, and in place of Mr. Rupchand and Mr. Bharwani. By the other deed, the same appointment wasmade in respect of Mohan's settlement. Each of the deeds was executed by the parties thereto in Londonand was then sewn up in the settlement to which it related and kept by Norton, Rose, Botterell and Roche inLondon.

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There is in evidence before me a document dated 27 March 1981 signed by Harish and witnessed by Mr.Advani, in which Harish purported to transfer to the trustees of his settlement the 89,997 shares in Eskay 1which stood in his name. Presumably, Mohan signed a similar document. There is, however, no evidence asto whether or not the shares were then formally registered in the names of the trustees.

Later during 1981 an important company reconstruction took place. The background to this was the desire bythe Lokumal and Tahilram branches of the family that each should conduct its overseas trading businesswithout any participation therein by the other. This had been achieved in the main by the Kaycee/Chellsonsdivision effected in 1973. However, the settlement trustees held, through Eskay 1, interests both in Kayceeand in Chellsons, and the settlement trustees included both Lokumal representatives, namely, Lal and Sham,as well as Chellsons representatives, namely, Ram and Murli. It was desired to remove this fiduciaryparticipation by Lokumal trustees in Chellsons affairs and by Tahilram trustees in the affairs of Kaycee. Inaddition, the decision was reached, although by whom and in what circumstances is not clear, that thesettlement holdings in Kaycee and Chellsons respectively should be represented by a different class of sharefrom the shares held by the Lokumal or Tahilram shareholders, as the case may be. So, the following stepswere taken:

(1) On 9 June 1981 Kaycee and Chellsons each held a special general meeting convertingthe shares held by Eskay 1 into B shares with a minimum guaranteed and preferential dividendof 6 per cent., and with restricted voting rights. The meetings were held in Bermuda. At eachcompany meeting the chairman, Sir Bayard Dill, a partner in Conyers, Dill and Pearman, heldthe proxy from Eskay 1. The proxy forms had been signed by Mr. John Ellison, another partnerin Conyers, Dill and Pearman, as a director of Eskay 1, and by Mr. Younie, also a partner inthat firm, as assistant secretary of Eskay 1. The evidence before me does

[1985] Ch. 409 Page 422

not reveal in what manner the approval of the settlement trustees to this conversion of the trustshares into the B shares was obtained, or how that approval was communicated to Conyers,Dill and Pearman.

(2) Eskay 1 was put into liquidation.

(3) On 26 June 1981 two new Bermudan companies were formed: Eskay "K" (Bermuda) Ltd.,which subsequently became Kayshewak Ltd. ("Kayshewak"), and Eskay "C" (Bermuda) Ltd.,which subsequently became Eskay (Bermuda) Ltd. ("Eskay 2"). Each company had an issuedshare capital of 150,000 shares of 1 each. In the case of Kayshewak, 149,995 of the issuedshares were allotted to the trustees of the two settlements, and in the case of Eskay 2, 149,995shares were allotted to a nominee Bermudan company, Pembroke Ltd., to hold for the trustees.The remaining shares in each of the two companies were allotted to individual members ofConyers, Dill and Pearman, upon trust, I infer, for the trustees of the settlements. Theconsideration for the allotment of the Kayshewak shares was the Kaycee shares held by Eskay1. The consideration for the allotment of the Eskay 2 shares was the Chellsons shares held byEskay 1.

(4) By deeds of appropriation and appointment dated 24 May 1982, supplemental to Harish'ssettlement, first, two funds were constituted: an "A" fund comprising the settlement'sKayshewak shares, and a "B" fund comprising the settlement's Eskay 2 shares. Second, theTahilram trustees, that is, Ram and Murli, and also Mr. Advani, retired as trustees of theKayshewak shares and Lokumal was appointed in their place. So Lal, Sham and Lokumalbecame trustees of the Kayshewak shares, Kayshewak being the company which held theshares in Kaycee. Third, the Lokumal trustees, that is Lal and Sham, retired as trustees of the

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"B" fund and Pishu was appointed in their place. So Ram, Murli, Pishu and Mr. Advani becametrustees of the Eskay 2 shares, Eskay 2 being the company which held the shares inChellsons.

A deed of the same date between the same parties and to the same effect was made supplemental toMohan's settlement. Both these deeds were drawn up by Norton, Rose, Botterell and Roche in London, andwere executed by the respective parties, thereto in London. These deeds were kept in London by Norton,Rose, Botterell and Roche.

In summary, by the process I have mentioned, each settlement held Kayshewak shares of which the trusteeswere the first, second and sixth defendants, and Eskay 2 shares, of which the trustees were the third fourth,fifth and seventh defendants. Kayshewak held B class shares in Kaycee, representing 30 per cent. of itsissue share capital. Eskay 2 held B class shares in Chellsons, representing 30 per cent. of the issued sharecapital of that company. There are no other trust assets.

The plaintiffs have two particular complaints arising out of the reorganisation to which I have referred. First,

complaint is made of the acceptance of the B class non-voting shares in substitution for the ordinary sharespreviously held. The trustees, it is said, ought never to have agreed to this. Secondly, it is said that thereorganisation involved the family trustees - that is to say, all the trustees bar Mr. Advani - being placed in aposition in which they had conflicting interests and

[1985] Ch. 409 Page 423

duties. I need not, for the purposes of this application, further consider these complaints; but they representsome of the matters which the court may have to consider if the action proceeds.

Accounts of Kaycee and of Chellsons have recently been supplied to the plaintiffs and are in evidence.Kaycee's balance sheet, as at 30 June 1983, shows it as having a net worth of 4,246,699. Chellsonsbalance sheet as at 30 June 1982 shows it as having a net worth of 2,849,866. These accounts, however,are not consolidated accounts, and each company is simply a holding company. It is possible that

consolidated accounts may show a different picture. However, these are the companies in each of which thesettlements hold a 30 per cent. interest and, on any basis, the settled assets are substantial in worth.

It is, therefore, a matter of some surprise to discover that the settlements have not, from the date on whichthey were made to the present time, received any income whatever from these assets. So far as appearsfrom the evidence before me, in the period up to the incorporation of Eskay 1, no dividend was ever paid byKaycee or Chellsons to Mohan or to Harish. After the incorporation of Eskay 1, Eskay 1 received no suchdividends. Since the reorganisation in 1981, Kayshewak and Eskay 2 have respectively received theminimum 6 per cent. dividend from Kaycee and Chellsons, but neither Kayshewak nor Eskay 2 has everdeclared a dividend, so no income has ever been received by the trustees of the settlements. It follows thatno distribution of trust income or trust capital to any of the beneficiaries under the settlements has ever beenmade.

Having thus reviewed the settlements and their history, I should now return to the individual members of theChellaram family. Their respective circumstances are relevant both to a consideration of what is the properlaw of the settlements, and also to Mr. Miller's forum conveniens argument.

Mohan is Indian by birth and domicile. At the date of the settlements he was resident in Lagos. He is now,and has for some time, been resident in Bombay.

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Harish is also Indian by birth. He has a domicile of origin in India. In 1972, or thereabouts, he went with hiswife and children to live in Singapore and manage the Singapore company, K. Chellaram and Sons (FarEast) Ltd. In order to do so, he was required under Singaporean law to bring into Singapore a substantialcapital sum and to acquire the status of a permanent resident. He did both. He has since retained that status.Both he and his wife, Radhika, have deposed that on moving to Singapore they had no intention of ever

returning to live in India and had acquired a Singaporean domicile at the time the settlements were made. Nocross-examination has taken place of them or of any other deponent, notwithstanding a number of disputesof fact which appear from the affidavits. I bear that in mind, but nevertheless, addressing myself to theobjective facts, I am unable to conclude that Harish has lost his domicile of origin, let alone that he had lost itby 14 February 1975. He has always held an Indian passport. I have seen copies of his passport issued in1973, and of his current passport which was issued in 1980. In both his domicile is given as India. In both hegives, as his

[1985] Ch. 409 Page 424

permanent address in India, his mother's Bombay address at which, it is common ground, rooms arepermanently available for his and his family's occupation. His wife's successive passports and his children'spassports likewise claim an Indian domicile with a permanent address in India at the home of Lachmibai. Thefamily regularly visit Bombay. I do not see any prospect that Harish, in the face of these facts, could establishthat he had abandoned his Indian domicile of origin. The evidence, in my view, shows that when he made his

settlement he was domiciled in India.

Lachmibai is, and has always been, domiciled in India and resident in Bombay. The sisters of Harish andMohan are beneficiaries under the settlements; they all live in India.

I now come to the trustees. I have already described the residence of the original trustees at the date of thesettlements. The present trustees are scattered around the world. They are all Indian born and domiciled inIndia. Lokumal is resident in India; Lal is resident in Hong Kong; Sham is resident in Lagos. Of the Tahilramfamily, Ram is resident in Las Palmas; Pishu is resident in India, Murli is resident part of the time in Bombayand partly in West Africa. All of the Chellarams appear to have London addresses, houses where they ortheir respective families stay when in England. These houses stand in the names of their respective Londoncompanies. They all appear to visit England with some regularity.

Mr. Advani, the only non-family trustee, practises law in Bombay but visits England regularly, usually in Mayof each year.

The bedrock of Mr. Miller's case is that these two settlements are foreign settlements, the proper law ofwhich is the law of India. Mr. Lyndon-Stanford contends, on the contrary, that the proper law is the law ofEngland.

It is important to be clear at the outset as to the relevance of this issue on the present application. Theapplication seeks to prevent the plaintiffs from prosecuting in England a claim for the removal of the trusteesand for the appointment of new trustees. Mr. Miller argues that the law by which the proposition that the

trustees should be removed must be tested, and by which the question of who should be appointed in theirplaces must be answered, is the proper law of the settlement. Mr. Lyndon-Stanford submits, however, that itis not the proper law of the settlement, but the law of the place of administration that should govern suchissues as removal of trustees and appointment of new ones. The place of administration, he submits, isLondon.

The proper law of the settlement is,perLord Greene M.R. inDuke of Marlborough v. Attorney-General[1945] Ch. 78, 83, the law which governs the settlement. He continued:

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"This law can only be the law by reference to which the settlement was made and which was intended by the parties togovern their rights and liabilities."

In Dicey & Morris, Conflict of Laws, 10th ed. (1980), vol. 2, p. 678, rule 120 states: "The validity, the

interpretation and the effect of an[1985] Ch. 409 Page 425

inter vivos trust of moveables are governed by its proper law ..." Rule 120 identifies the proper law of thesettlement as:

"in the absence of an express or implied selection of the proper law by the settlor, the system of law with which the trusthas its closest and most real connection."

When Mr. Miller first opened the case to me, I was strongly inclined to regard the law of India as the obviousproper law of these two settlements, but as argument progressed I found myself progressively less certain.The beneficiaries are an Indian family. The trustees were all Indian in origin although one or other may have

held a British passport. The settlements were drawn up in Bombay by Mr. Advani, an Indian practitioner,acting apparently in the course of his profession. The settlors were Indian in origin and Indian domiciled atthe date of the settlement. All these factors point - and I think point strongly - to the law of India being theproper law.

Mr. Advani has sworn an affirmation in which he has stated in terms that he intended Indian law to apply tothese settlements which he drafted. This evidence is inadmissible as evidence of the intentions of the partiesto the settlements, but I may, I think, take it as indicating that the settlements are appropriate in form for thepurposes of Indian law. Nevertheless, I am left with doubts. The trust property was Bermudan. Theunderlying assets, in the form of the operating companies, were all situated outside India. The purpose of thesettlements was, it seems, in part to escape Indian taxation and, in part, to escape Indian exchange controlregulations. But most important of all, it seems to me, is the identity of the three original trustees. Two, Mr.Rupchand and Mr. Bharwani, were permanently resident in England. The third, Ram was the member of the

family who, in 1975, appeared to have the closest connection with England. The inference is inescapablethat the parties to the settlements contemplated that administration thereof would take place in London.Indeed, Mr. Miller accepted that this was an inference which was open to be drawn.

The question why, if the parties intended the settlements to be governed by Indian law they should havearranged for an English administration, is a difficult one to answer. The parties' contemplation of an Englishadministration seems to me to point strongly in favour of an English proper law. For the moment, however, Ipropose to leave the question open and to assume that Mr. Miller is right that the law of India is the properlaw of the settlement and to see where that leads. It leads, Mr. Miller submitted, to the conclusion that theEnglish courts should have nothing to do with the plaintiffs' claim for the removal of the trustees. You cannothave, he said, English courts removing foreign trustees of foreign settlements any more than you can haveforeign courts removing English trustees of English settlements. Tied up in this cri de coeur are, in my view,three separate points. First, there is the question of jurisdiction. Does an English court have jurisdiction to

entertain such a claim? Second, there is the question of power. If an English court does have jurisdiction,can it make an effective order removing foreign trustees of foreign settlements? Third, there is the

[1985] Ch. 409 Page 426

forum conveniens point. Is this an action which an English court ought to be trying?

I start with jurisdiction. In a sense, there is no doubt at all but that the court has jurisdiction. Each of thedefendants was either served personally or service was effected on Norton, Rose, Botterell and Roche whohad authority to accept service. No question arises as to the application of R.S.C., Ord. 11. By reason of due

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service of the writ, the court has jurisdiction over each of the defendants in respect of each of the issuesraised by the writ.

As to subject matter, also there is in my judgment no doubt that the court has jurisdiction. In Ewing v. Orr

Ewing(1883) 9 App.Cas. 34 it was held by the House of Lords that the English courts had jurisdiction toadminister the trusts of the will of a testator who died domiciled in Scotland. The will was proved in Scotlandby executors, some of whom resided in Scotland and some in England. The assets, the subject of the trusts,consisted mainly of hereditable and personal property in Scotland. An infant beneficiary resident in Englandbrought an action in England for the administration of the trusts of the will by the English courts. It was clearthat the proper law of the trusts was the law of Scotland. Nonetheless, the House of Lords, affirming theCourt of Appeal, upheld the jurisdiction of the English courts. The Earl of Selborne L.C. said, at pp. 40-41:

"the jurisdiction of the English court is established upon elementary principles. The courts of equity in England are, andalways have been, courts of conscience, operating in personam and not in rem; and in the exercise of this personal

jurisdiction they have always been accustomed to compel the performance of contracts and trusts as to subjects whichwere not either locally or ratione domicilii within their jurisdiction. They have done so as to land, in Scotland, in Ireland,in the colonies, and in foreign countries:... A jurisdiction against trustees which is not excluded ratione legis rei sitae asto land, cannot be excluded as to moveables, because the author of the trust may have had a foreign domicil; and forthis purpose it makes no difference whether the trust is constituted inter vivos, or by a will, or mortis causa deed."

Lord Blackburn agreed, at pp. 45-46:

"It was argued that the domicil of the testator being Scotch, the court of Chancery had no jurisdiction at all; that thejurisdiction depended on the domicil of the testator, or at least on the probate in England, and was therefore confined tothe comparatively small part of the property that was obtained by means of the English probate. I do not think that thereis either principle or authority for this contention. The jurisdiction of the court of Chancery is in personam. It acts uponthe person whom it finds within its jurisdiction and compels him to perform the duty which he owes to the plaintiff."

Both Lord Selborne L.C. and Lord Blackburn went on to say that the jurisdiction of the court to administer theforeign trust was not truly

[1985] Ch. 409 Page 427

discretionary, and that the plaintiff was entitled to the order sought ex debito justitiae: see pp. 41-42 and47-48.

That view cannot, in my judgment, stand with more recent pronouncements in the House of Lords: see, forexample, Lord Diplock inThe Abidin Daver[1984] A.C. 398, 410, 411. Current authority establishes that thecourt does have a discretion to decline jurisdiction on forum conveniens or forum non conveniens grounds.But the principle that the English court has jurisdiction to administer the trusts of foreign settlements remainsunshaken. The jurisdiction is in personam, is exercised against the trustees on whom the foreign trustobligations lie, and is exercised so as to enforce against the trustees the obligations which bind theirconscience.

The jurisdiction which I hold the court enjoys embraces, in my view, jurisdiction to remove trustees andappoint new ones. InLetterstedt v. Broers(1884) 9 App.Cas. 371, Lord Blackburn, giving the judgment of thePrivy Council in a case on appeal from the Supreme Court of the then colony of the Cape of Good Hope,referred, at p. 385, to a passage in Story's Equity Jurisprudence, at p. 1289, which reads: "Courts of equityhave no difficulty in interposing to remove trustees who have abused their trust." Lord Blackburn thencontinued, at p. 386:

"It seems to their Lordships that the jurisdiction which a court of equity has no difficulty in exercising under thecircumstances indicated byStory, is merely ancillary to its principal duty, to see that the trusts are properly executed."

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Accordingly, in my judgment, the courts of this country having jurisdiction to administer the trusts of the twosettlements have jurisdiction ancillary thereto to remove the trustees.

Mr. Miller's argument that the court did not have jurisdiction to remove the trustees of a foreign settlementwas based in part on the proposition that an order of removal would be ineffective to divest the presenttrustees of the fiduciary duties they owed under the proper law of the settlements. To some extent, thissubmission was based on the form of the relief sought by the writ. Paragraph 4 seeks:

"An order removing the defendants as trustees of Mohan's settlement and Harish's settlement, and appointing some fitand proper persons to be trustees in their place."

An order in that form would not of itself, however, divest existing trustees and vest trust property in newtrustees. Consequently, such an order would usually be accompanied by a vesting order under section 44 -in the case of land - or section 51 - in the case of stocks and shares - of the Trustee Act 1925. It could not, inmy opinion, sensibly be suggested - and Mr. Lyndon-Stanford has not suggested - that a vesting order under

section 51 could divest the defendants of the trust shares in the Bermudan holding companies or could vestthose shares in new trustees. A vesting effect could be achieved by a vesting order only in respect of stocksand shares situated within the territorial jurisdiction of the court. Further, so long as the trust shares remainvested in the defendant trustees their fiduciary obligations in respect thereof must

[1985] Ch. 409 Page 428

remain. So, Mr. Miller submitted, the court lacks the power to grant the relief sought by paragraph 4 of thewrit.

This argument is, in my judgment, based upon a point of form and not of substance. The jurisdiction of thecourt to administer trusts to which the jurisdiction to remove trustees and appoint new ones is ancillary, is anin personam jurisdiction. In the exercise of it, the court will inquire what personal obligations are binding uponthe trustees and will enforce those obligations. If the obligations are owed in respect of trust assets abroad,

the enforcement will be, and can only be, by in personam orders made against the trustees. The trustees canbe ordered to pay, to sell, to buy, to invest, whatever may be necessary to give effect to the rights of thebeneficiaries, which are binding on them. If the court is satisfied that in order to give effect to or to protect therights of the beneficiaries, trustees ought to be replaced by others, I can see no reason in principle why thecourt should not make in personam orders against the trustees requiring them to resign and to vest the trustassets in the new trustees. The power of the court to remove trustees and to appoint new ones owes itsorigin to an inherent jurisdiction and not to statute, and it must follow that the court has power to make suchin personam orders as may be necessary to achieve the vesting of the trust assets in the new trustees. Thisis so, in my judgment, whether or not the trust assets are situated in England, and whether or not the properlaw of the trusts in question is English law. It requires only that the individual trustee should be subject to the

jurisdiction of the English courts. It does not matter, in my view, whether they have become subject to thejurisdiction by reason of service of process in England or because they have submitted to the jurisdiction, orbecause under R.S.C., Ord. 11 the court has assumed jurisdiction. In every case, orders in personam are

made by the courts on the footing that those against whom they are made will obey them.

Accordingly, and for these reasons, I do not accept Mr. Miller's submission that the English courts have nopower to remove the defendants as trustees of these two settlements. Since, however, such removal wouldhave to be effected by in personam orders, the plaintiffs have put before me an amended statement of claimwhich seeks such orders. In my judgment, the court would have power, if it thought it right to do so, to makethose orders.

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There are two other associated points which I should now deal with. As an adjunct to his submission that theEnglish courts lack the power to remove trustees of foreign settlements, Mr. Miller submitted that if such anorder in the in personam form were made the defendants could not safely obey the order without firstobtaining confirmation from the Indian courts that it would be proper for them to do so. Further, he submitted,his client ought not to be subjected to such an order unless it were clear that Indian law would regard them, if

they did obey, as discharged from their fiduciary obligations under the settlements.

It would be a matter entirely for the defendants and their advisers what steps they take in the Indian courts,but for my part I am not impressed by the proposition that such confirmation would be necessary. TheEnglish courts have jurisdiction over these defendants. An objection

[1985] Ch. 409 Page 429

to the exercise of jurisdiction on forum conveniens grounds has been taken and I must deal with it, but if inthe end the case continues in England, I would expect that the Indian courts, for reasons of comity, wouldafford the same respect to orders of this court as in like circumstances and for the same reasons Englishcourts would afford to theirs.

Mr. Miller suggested to me that I would give short shrift to an order of a foreign court removing a trustee of anEnglish trust; but if the English trustee had been subject to the jurisdiction of the foreign court exercised inlike circumstances to those in which English courts claim and exercise jurisdiction, I can see no reason why Ishould recoil from an order in personam made by the foreign court against an English trustee. And if theorder had been given effect to by, for example, the trustee transferring trust assets in England into thenames of new trustees, I can see no reason why an English court should question the efficacy of thetransfer. All of this assumes, of course, that there were no vitiating features in the manner in which theforeign order was obtained.

As to the point that the defendants might, notwithstanding that they had transferred the Bermudan shares tonew trustees, still owe fiduciary duties under the settlements, there is, in my view, no substance in that point.First, no party to the English action could so contend. Mohan and Lachmibai are not parties to the action butcould easily be joined, as also could any of the sisters who wished to be joined. This does not therefore

seem to me to be a practical problem.

Secondly, the point could be raised as a defence to the plaintiffs' claim for the removal of trustees, and, if thecourt were satisfied that the point was a sound one, I cannot imagine that the defendants would be orderedto transfer the shares.

Thirdly, the status of trustee and the burden of the fiduciary obligations arising therefrom, have, as it seemsto me, no reality except in relation to assets which are vested in or under the control of the trustee. If atrustee is divested of the trust assets, I do not understand how it can be supposed that he can retain anyfiduciary obligation thereafter in respect of those assets or in respect of the income derived from them.

I do not, therefore, think there is anything in Mr. Miller's objections to the efficacy of the in personam orders,if such orders were made.

I have dealt with Mr. Miller's submissions on jurisdiction and on the power of an English court to make theorders sought on the footing that Indian law is the proper law of the settlements. As an adjunct to hisarguments on those matters, Mr. Miller submitted that if Indian law was the proper law of the settlements,then Indian law was the system of law which ought to be applied to the matter of removal of trustees of thesettlements, and to the appointment of new ones. He drew my attention to the relevant provisions of theIndian Trusts Act 1882 as amended up to 1969 and commented, rightly in my opinion, that the various

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provisions in that Act relevant to the removal and appointment of trustees by the Indian court could not beapplied by an English court in the present case.

[1985] Ch. 409 Page 430

Mr. Miller wielded this point as part of his argument on jurisdiction and also as relevant to his forum

conveniens point. Mr. Lyndon-Stanford has contended that the proper law of the settlement is English lawbut he has submitted that even if that is wrong, England is the place where the trusts were intended to beadministered and the place where, in fact, the trusts have been administered; that the administration of atrust is governed not by the proper law of the trust but by the law of the place where administration takesplace; and that the removal of trustees and the appointment of new ones is a matter of administration. It is afeature of the history of these settlements that there has been remarkably little administration. The reason forthis is that the trust property has been represented simply by shares in Bermudan holding companies, andno trust income has been derived therefrom. Until recently, when in response to the plaintiffs' demand trustaccounts were prepared, there were no such accounts. However, Mr. Lyndon-Stanford is, in my view, right inpointing out that such administration as there has been has taken place in London. It was in London that thedeeds of retirement and appointment of new trustees were prepared and executed; such legal advice as hasbeen taken by the trustees seems to have been taken by Mr. Advani from Norton, Rose, Botterell and Rochein London, and there seems to me to be no room for any real doubt that the parties to the settlementcontemplated that the administration would take place in London.

Accordingly, in my judgment, the factual basis on which Mr. Lyndon-Stanford makes his submission issound. As to law, Mr. Lyndon-Stanford relies on the proposition stated in rule 121 in Dicey & Morris, p. 683:"The administration of a trust is governed (semble) by the law of its place of administration." Among thematters classified in the notes to rule 121 as matters of administration is: "the question who can appoint anew trustee, and what persons may be so appointed." If this rule correctly states the law, it would seem tofollow that the issue regarding removal of the trustees of these settlements should be governed by the law ofthe place of administration of the settlements. However, the tentative manner in which the rule is expressedis justified, in my view, by the lack of clear authority provided by the cases cited in the footnotes.

There are two categories of case which must be distinguished from cases such as the present case. First,there are cases which establish that the administrative powers conferred upon personal representatives by

the Administration of Estates Act 1925 can be exercised by English personal representatives in relation toassets in England, whether or not the deceased died domiciled in England: seeIn re Wilks[1935] Ch. 645.These cases exemplify the well-settled proposition that the administration of a deceased's assets isgoverned by the law of the country from which the administrator derives his authority.

Secondly, there are cases which support the view that the provisions of English trust legislation apply to trustproperty situated in England whether or not the trusts on which the trust property is held are the trusts offoreign settlements: seeIn re Kehr, decd. [1952] Ch. 26, although Danckwerts J. doubted, at p. 30: "whethertrustees constituted

[1985] Ch. 409 Page 431

by the law of a foreign country would have the powers conferred upon trustees regulated by English law ...;"see alsoIn re Ker's Settlement Trusts[1963] Ch. 553. But neither of these lines of cases supports Dicey's

rule 121 when applied to a foreign settlement which is being administered in England but where the trustproperty is not in England.

More cogent support is provided by In re Pollak's Estate[1937] T.P.D. 91. In that case the testator wasdomiciled in the Transvaal. He left moveables in England and in South Africa as well as in other countries.By his will he appointed as his executor and trustee an English bank which had no branch in South Africaand left his residuary estate upon trust for beneficiaries, the majority of whom were domiciled in England. Anumber of questions were raised for the decision of the Transvaal court, including a question as to the lawwhich should determine the rights and duties of the bank as trustee in the execution of the testamentary

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trust. Since the testator was domiciled in the Transvaal, South African law governed the construction of thewill, but the court concluded that the testator had intended the trust to be administered in England, and DavisJ., with whose judgment Greenberg J. concurred, said, at p. 101:

"I have no doubt that in appointing an English bank ... to administer a trust fund wherein the great majority of thepersons interested were at the time domiciled in England, the testator ... intended English law to govern."

He cited, at p. 102, with approval this passage from the volume on Conflict of Lawsissued by the AmericanLaw Institute, at p. 380:

"If the testator appoints as trustee a trust company of another state, presumptively his intention is that the trust shouldbe administered in the latter state; the trust will therefore be administered according to the law of the latter state."

Accordingly, the court held that the rights and duties of the bank as trustee were to be governed by Englishlaw, notwithstanding that the essential validity of the trust and the construction of the will were governed bythe law of South Africa, the domicile of the testator. The reasoning which led the Transvaal court to thisdecision I respectfully accept. The court concluded that the testator in establishing a settlement to beadministered in England must have intended English law to govern its administration. The court gave effectto that intention. But it does not follow from In re Pollak's Estate[1937] T.P.D. 91 that the law of the place ofthe administration of a trust would govern the rights and duties of the trustee in a case where thecircumstances did not enable the inference to be drawn that such was the testator's or settlor's intention.Inre Pollak's Estatewas a case of testamentary trust. It is well-established English law that the essentialvalidity of a testamentary trust of moveables is governed by the law of the testator's domicile. But there is noreason why a testator should not by will establish a trust to be governed by some law other than the law ofhis domicile. His ability to create the trust may be subject to the law of his domicile but subject thereto he is,in my view, as able by will to make a foreign settlement as

[1985] Ch. 409 Page 432

he is able to do so inter vivos. In re Pollak's Estatesupports the proposition that a testator can do so. It doesnot, in my view, support anything further and does not really support rule 121.

As a matter of principle, I find myself unable to accept the distinction drawn by rules 120 and 121 in Dicey &Morris between "validity, interpretation and effect" on the one hand and "administration" on the other hand.The rights and duties of trustees, for example, may be regarded as matters of administration but they alsoconcern the effect of the settlement. The rights of the trustees are enjoyed as against the beneficiaries; theduties of the trustees are owed to the beneficiaries. If the rights of the beneficiaries are to be ascertained byapplying the proper law of the settlement, I do not understand how the duties of the trustees can beascertained by applying a different law, and vice versa. In my judgment, a conclusion that the law of theplace of administration of a settlement governs such matters as the rights and duties of the trustees, can onlybe right if that law is the proper law governing the settlement.

But the right of beneficiaries to have trustees removed and new ones appointed is a right of a rather special

nature. It is not - at least in the usual case - a right conferred by the settlement. If it were the case that asettlement conferred upon particular beneficiaries or on a particular person such as the settlor the right toremove trustees and appoint new ones, that right - like any other rights conferred by the settlement onbeneficiaries or trustees - would, in my view, require to be given effect in accordance with the proper law ofthe settlement. That would, in my view, be so regardless of where the settlement was being administered.But no such right is conferred by the two settlements with which I am concerned.

The plaintiffs' claim for the removal of trustees and the appointment of new ones is, in this case - as in mostcases - not an attempt to enforce a corresponding right conferred by the settlements, but is an appeal to the

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inherent jurisdiction of the court to which Lord Blackburn referred in Letterstedt v. Broers, 9 App.Cas. 371,386. The function of English courts in trust litigation is to enforce or protect the rights of the beneficiarieswhich bind the conscience of the trustee defendants. The identification and extent of those rights is a matterfor the proper law of the settlement, but the manner of enforcement is, in my view, a matter of machinerywhich depends upon the powers enjoyed by the English courts. Among the powers available to English

courts is the power to order the removal of trustees and the appointment of new ones. This power is, in myview, machinery which, under English domestic law, can be exercised by English courts where necessary inorder to enable the rights of beneficiaries to be enforced or protected. The exercise of the domestic powerdoes not, in my view, depend upon whether the rights of the beneficiaries are enjoyed under domesticsettlements or foreign settlements, or on whether the trust property is situated in England or abroad. Thelocality of the trust property will, however, determine whether the removal can be achieved by an in remorder or whether an in personam order is appropriate. Accordingly, except where rights conferred by thesettlement are under consideration, the removal of

[1985] Ch. 409 Page 433

trustees and the appointment of new ones is not, in my judgment, a matter to be governed by the proper lawof the settlement. Nor, in my opinion, is it a matter governed by the law of the place where the administrationof the settlement has taken place. It is, in my judgment, a matter to be governed by the law of the countrywhose courts have assumed jurisdiction to administer the trusts of the settlement in question.

In the view of the matter I take, therefore, I do not think that the identification of the proper law of thesettlement is a critical issue on this application. Any court before which the plaintiffs' case is litigated will haveto consider the rights of the beneficiaries under these discretionary settlements in order to form an opinion asto whether the enforcement or protection of those rights requires the removal of the present trustees but noone has suggested that the nature of those rights is going to be different if tested under Indian law than iftested under English law. Any such difference is likely to be marginal only and to be immaterial for thepurposes of the plaintiffs' claim for the removal of the trustees.

Mr. Miller argued that if the proper law of the settlements were the law of India, the identity of any newtrustees should be decided upon by the application of criteria relevant to an Indian discretionary trustestablished for the benefit of an Indian family, and that this could not well be done by an English court. I hope

I have the argument correctly, and if I have I am bound to say that I think there is nothing in it. On anyfooting, these discretionary settlements are Indian settlements, in a descriptive and not a proper law sense,intended for the benefit of an Indian family, and English courts, if they came to appoint new trustees, wouldapply criteria to their selection which would reflect that character of the settlements. I do not accept that thecriteria which would be applied by an Indian court would be any different from those applied by an Englishcourt, and I do not accept that in either jurisdiction those criteria would be any different if English law orIndian law were the proper law of the settlements.

It is, therefore, not necessary for me to decide on this application whether Indian law or English law is theproper law of the settlements. I am dealing with an interlocutory application. The relevant evidence has notbeen tested by cross-examination. In these circumstances, I would, I think, be unwise to express aconclusion on the proper law question and I do not do so.

I have held, contrary to Mr. Miller's submissions, that the English courts have both jurisdiction and power todeal with the plaintiffs' claim for the removal of trustees and for the appointment of new ones. In that event,Mr. Miller submits that the court ought nevertheless to decline to exercise that jurisdiction on the ground,shortly stated, that there is another competent jurisdiction, India, in which justice can be done between theparties, and that by comparison with India, England is a forum non conveniens.

I have been referred to a number of decisions in which the criteria to be applied by a court which is asked tostay an action on, in effect, forum non conveniens grounds, have been discussed. Mr. Miller referred

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[1985] Ch. 409 Page 434

me toThe Atlantic Star[1974] A.C. 436, to Lord Reid's dictum, at p. 454D, that the plaintiff should offer somereasonable justification for his choice of forum, and Lord Kilbrandon's comments, at p. 475A-E, thatconveniens is to be read as meaning "appropriate" rather than "convenient." InMacShannon v. Rockware

Glass Ltd. [1978] A.C. 795 Lord Salmon at p. 817, expressed the test as being whether the defendants couldshow that to refuse a stay would produce injustice. Lord Keith of Kinkel, at p. 828, said that a defendantseeking a stay must show good reason why the court's discretion should be exercised in his favour. I wasreferred toAmin Rasheed Shipping Corporation v. Kuwait Insurance Co. [1984] A.C. 50 where Lord Diplock,at p. 68, referred to excessive costs or excessive delay likely to be occasioned by the foreign proceedings asfactors to be taken into account, and to the most recent House of Lords authority on the subject, The AbidinDaver[1984] A.C. 398, where Lord Diplock, at p. 411G, commented that there was no longer any discernibledifference between the English law approach and the Scottish doctrine of forum non conveniens. Mr.Lyndon-Stanford referred me to the principles set out by Robert Goff J. in Trendtex Trading Corporation v.Crdit Suisse[1980] 3 All E.R. 721.

These authorities establish that the old rule expressed by Lord Blackburn in Ewing v. Orr Ewing, 9 App.Cas.34, that an English court has no discretion where defendant trustees are properly before it to decline to

administer the trust of a foreign settlement, is no longer good law. On the positive side, the authoritiesestablish that in all cases where on forum conveniens grounds a stay is sought, the court must strike abalance between the right of the plaintiff to choose his forum and the right of the defendant that he shouldnot be required to take part in litigation before a court inappropriate for that litigation. In striking the balance,all the circumstances relevant to the parties and to the litigation are proper to be taken into account.

The circumstance on which Mr. Miller most heavily relied was that these are Indian settlements made for thebenefit of an Indian family. I accept his adjectives if used in a descriptive sense, and I accept that this is afactor in favour of litigation in India rather than in England. The point is, however, a rather more precise one.Although litigation in India and the jurisdiction of the Indian courts have been mentioned, it is in fact litigationin Bombay and the jurisdiction of the Bombay courts for which Mr. Miller is contending. The Chellaram familyis a Bombay family. The evidence adduced before me has concerned the jurisdiction of and the incidents oflitigation to the Bombay courts. There has been no evidence relating to litigation in any other courts in India.

Mr. Lyndon-Stanford has sought to meet Mr. Miller's point by questioning whether the Bombay court wouldaccept jurisdiction in this case, and I have had expert evidence as to this from Bombay lawyers. Mr. Mehta,for the plaintiffs, has given his opinion that the Bombay court would not have jurisdiction. Mr. Munim, for thedefendants, has concluded that it would. Both views depend upon certain assumptions which Mr. Mehta andMr. Munim respectively make. Having considered this evidence, the position, in my view, can be summarisedthus: the Bombay court has the jurisdiction conferred on it by the letters patent

[1985] Ch. 409 Page 435

which created it; it does not enjoy, as does the English court, an inherent jurisdiction. The Bombay court has,as I understand it, jurisdiction if the defendants are resident or carry on business within its territorial area.This requirement is satisfied so far as Mr. Advani, Lokumal, and Pishu are concerned. As to the others, Lal,Ram, Sham and Murli, each of them retains in Bombay both a business and residential connection which I

would expect to be sufficient to satisfy the jurisdictional requirements. It is, however, on the evidencepossible that there might be some difficulty in the case of Lal who resides generally in Hong Kong, and in thecase of Sham, who is generally in Nigeria, in establishing the requirement.

In addition, the Bombay court has jurisdiction whenever the cause of action in question arises within thejurisdiction. This test of jurisdiction is a little difficult to apply to a case where administration of a trust, or afacet thereof such as the removal of the trustees, is sought. This is particularly so where, as here, the trustproperty is not situated within the jurisdiction.

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Although, on the evidence before me , I think it likely that the Bombay court would accept jurisdiction, I amleft with a measure of doubt whether it would, under the terms of its letters patent, have jurisdiction toentertain this case. It is true, as Mr. Miller pointed out, that all the defendants, having asserted before me thatthe Bombay court would have jurisdiction, would be in a poor position to assert before the Bombay court thatit did not. But neither of the experts has commented on this point, and I am not sure that I can make any

assumptions as to how the Bombay court would be likely to receive it. Under English law, a statutoryjurisdiction cannot normally be enlarged by an estoppel.

I think, therefore, that the lack of certainty about the jurisdiction of the Bombay court goes some way tocounteracting Mr. Mi

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Chellaram and Others v. Chellaram and Others