Bahamas Supreme Court rejects "root and branch" challenge to the Arbitral Award with huge ramifications for arbitration and the trust industry.
We act for Matteo Volpi (Matteo) in a first-of-its-kind appeal against a trust arbitration award before the Bahamas Supreme Court.
Matteo is the son of a well-known Italian billionaire, Gabriele Volpi (Gabriele), who made his fortune in the oil and gas industry in Nigeria. Matteo brought arbitration proceedings against his father, and Delanson, a trust company, in 2018 in relation to three trusts established by Gabriele which held billions of dollars of assets including African oil and gas interests, an interest in an African energy company, real estate, ships and an investment company, as well as Croatian and Italian football clubs, a stadium and an Italian water polo club.
Following the breakdown of family relations in 2016, at the direction of Gabriele, the trustee transferred all of the assets out of the trusts to Gabriele personally. Matteo brought arbitration proceedings on behalf of the beneficial class, of which he is one beneficiary, in order to recover the assets and reconstitute the trusts.
In 2018, with the support of our team, Matteo was successful in arguing that the transfers were made in breach of trust at the direction of Gabriele, who was found to be an accessory to the breach of trust by way of knowing receipt/unconscionable assistance. The transfers were also found to be a fraud on a power, meaning that the transactions were void from the beginning.
Gabriele and Delanson appealed that decision before the Bahamian Supreme Court. In doing so they challenged almost every finding the tribunal made on a number of different grounds under the Bahamas Arbitration Act.
On 28 December 2023, Justice Klein of the Bahamas Supreme Court handed the judgement down, rejecting all of Gabriele and the Trustees arguments and dismissing their appeals in their entirety. The decision clarifies the role of the Bahamas Courts in relation to arbitral awards and places an important marker down for a jurisdiction which actively encourages the determination of trust disputes by way of arbitration.
The tribunal included Dr. Georg von Segesser (Presiding Arbitrator), the Rt. Hon. Lord Neuberger of Abbotsbury and Professor Avv. Alberto Malatesta.
Partner and Head of Taylor Wessing's Contentious Trusts team in the UK, Emma Jordan said: "This appeal is the first of its kind under the Bahamas Arbitration Act, which has huge ramifications in future trust arbitrations that extends beyond the Bahamas. The judgement decides how the Bahamas Arbitration Act is interpreted and clarifies the position on the types of challenges that can be made to arbitration awards before the court. Crucially, the judgement has made clear that challenges to points of law can only be made with the consent of all parties. This precedent setting case will no doubt be an important addition to the "thin and underdeveloped" case law as referred by the judge that will impact the wider trust arbitration sector."
Robert Gibson, Senior Associate commented: "Bahamas is one of only a handful of jurisdictions which offer a statutory regime for trust arbitration. From a commercial perspective, this decision protected and strengthened the Bahamas' position as a forum for trust arbitration. In recent years, as a team we are seeing trust arbitrations become more prevalent. To those who wish to have their trust disputes determined by arbitration, this judgement sends a message that the ability for parties to challenge an arbitration decision is limited and the Courts will not easily intervene in tribunal's findings."
The team was led by Partner Emma Jordan with support from Senior Associates Robert Gibson and George Porter and Associate Isabelle Moisy from the Private Client team.
