The ADGM Court of First Instance granted comprehensive directions to NX, the trustee of the EYZ Trust, a discretionary family trust originally settled under Cypriot law in 2010. The court confirmed: NX is validly appointed trustee; ADGM law now governs the trust and is the proper law for construing the 2010 Settlement; the ADGM Courts are the forum for administration; Clause 2.1 was validly amended to designate the ADGM as the seat; and three subsequent deeds — one executed in 2021 and two in February 2022 — are each valid in their entirety. The court further declared that, since the Deed of Retirement and Appointment (DORA), NX holds absolute beneficial and equitable title to the Company A shares, Company B holds bare legal title as nominee under the Company A Deed, and Company B cannot act in respect of those shares without NX's consent. Justice Sir Andrew Smith grounded the court's authority in the inherent supervisory jurisdiction affirmed in Schmidt v Rosewood Trust Ltd, applied the migration power in Clause 2.4 of the 2010 Settlement, and deployed orthodox bare trust principles to resolve the title question. The judgment is a significant authority within the ADGM on proper-law migration, the court's trust administration jurisdiction, and the consequences of nominee arrangements following a trustee change.
Decision
All directions sought by NX were granted. First category: NX is validly appointed trustee of the EYZ Trust; ADGM law governs the trust and the construction and effect of the 2010 Settlement; the ADGM Courts are the forum for administration; and Clause 2.1 was validly amended to read 'The seat of the Settlement shall be in the Abu Dhabi Global Market'. Second category: the 2021 Deed, the 4 February 2022 Deed, and the 25 February 2022 Deed are each valid in their entirety. Third category: since the DORA, NX as trustee has been the absolute beneficial owner of the Company A shares; equitable title to those shares is vested in NX as trustee; Company B holds legal title on bare trust and as nominee for NX pursuant to the Company A Deed; and Company B is not entitled to take any action or exercise any rights as legal titleholder without NX's consent.
Facts
The EYZ Trust was created by a trust deed dated 20 September 2010 (the '2010 Settlement') by way of a declaration of trust by Former Trustee C, the founder of the Company D group of companies, the parent of which — Company D Limited — is a trust and corporate services provider. The initial trust property was 1,000 shares in Company E Limited, a BVI company. The sole original beneficiary was AA, the first defendant. The original protector was Former Protector F Limited, also incorporated in the BVI. Article II of the 2010 Settlement was headed 'Proper Law, Forum and Place of Administration'. Clause 2.1 designated the seat of the trust as Limassol, Cyprus. Clause 2.2 placed the settlement under the International Trusts Law of the Republic of Cyprus, with construction and effect subject to Cypriot law. Clause 2.3 made the Cypriot courts the forum for administration. Clause 2.4 conferred on the trustee the power, exercisable by deed, to declare that the proper law should be changed to any other jurisdiction in the world and that the forum for administration should be the courts of any jurisdiction, whether or not that jurisdiction was also the proper law jurisdiction. The expression 'Proper Law of this Settlement' was defined in the Settlement as the law to which the rights of all parties and the construction and effect of every provision were subject. Article IV gave the trustee wide powers over income and capital in absolute discretion, including under Clause 4.2(a) the power to raise any sum out of capital and pay or apply it for the benefit of all or any one or more of the beneficiaries in such shares and in such manner as the trustee thought fit. Article VI permitted the trustee, with the prior express written consent of the protector, to exclude beneficiaries from future benefit by deed (Clause 6.1) or to add to the class of beneficiaries by deed (Clause 6.2). Clause 6.3 allowed a beneficiary of full age to disclaim by deed. Article XI provided for trustee withdrawal and for the protector to appoint a new trustee. Article XIX permitted amendment of the Settlement and its schedules at any time solely by deed executed by all protectors and trustees then in office. Article XX allowed distribution of assets at the expiration of the 100-year trust period or on earlier failure of the trusts, with assets to be distributed to beneficiaries as the trustee determined, and in default to the primary beneficiary, then named beneficiaries in equal shares, then charity. At the date of the 2010 Settlement, Former Trustee C, as trustee, entered into a Trust Deed with Company B (Trustees) Limited under which Company B held legal title to the Company E shares as nominee, with beneficial title remaining with the trustee. By a Deed of Appointment dated 24 September 2010, Former Trustee G was appointed an additional trustee. By a Deed of Appointment and Retirement dated 29 December 2014, Former Trustee C and Former Trustee G retired and Former Protector F, as protector, appointed Former Trustee H Limited — a Cypriot company wholly owned by Company D, with Former Trustee C, Mr I, and Former Trustee G as directors — as sole trustee, with the trust property vested in it accordingly. The structure then evolved through at least four further instruments: a 2021 Deed and two 2022 Deeds (dated 4 February and 25 February respectively) amending the trust structure, and the DORA, by which NX was appointed trustee. Clause 2.1 was amended to substitute the ADGM for Limassol as the seat of the settlement. NX's witness statement, provided in Russian and relied upon in certified translation, and a further witness statement by her legal representative Mr Peter Stewart of Gresham Legal LLP, supported the application. None of the defendants — two adult beneficiaries and two minor beneficiaries who are the objects of the trustee's discretionary powers — appeared or were represented.
Issues before the court
- Was NX validly appointed as trustee of the EYZ Trust, and does the ADGM Court have supervisory jurisdiction to administer the trust and grant directions?
- Was Clause 2.1 of the 2010 Settlement validly amended to designate the ADGM as the seat of the settlement, and is ADGM law now the proper law governing construction and effect of the 2010 Settlement?
- Are the ADGM Courts the forum for the administration of the EYZ Trust?
- Are the 2021 Deed, the 4 February 2022 Deed, and the 25 February 2022 Deed each valid in their entirety?
- Since the DORA, does NX as trustee hold absolute beneficial and equitable title to the Company A shares, with Company B holding bare legal title as nominee under the Company A Deed and being unable to act without NX's consent?
The court's reasoning
Justice Sir Andrew Smith anchored the court's jurisdiction in the principle, drawn from Lord Walker's analysis in Schmidt v Rosewood Trust Ltd [2003] UKPC 26 at paragraph 51, that the court has an inherent jurisdiction to supervise, and if necessary intervene in, the administration of trusts. This provided the platform for all three categories of direction. The claim was brought by claim form, consistent with the ADGM Court Procedure Rules 2016, and the defendants — as objects of the trustee's discretionary powers rather than holders of fixed interests — were not required to participate for the court to act. On the applicable law and forum questions, the court applied the ADGM Application of English Law Regulations 2015, which import English trust law principles — including the English Trustee Act 1925 and the English Recognition of Trusts Act 1987 — into the ADGM legal framework. The Recognition of Trusts Act 1987, applied as ADGM law, governs choice-of-law questions for trusts with a foreign element. Dicey, Morris & Collins on the Conflict of Laws (16th edition, 2022) framed the conflict-of-laws analysis. The critical question was whether Clause 2.4 of the 2010 Settlement was wide enough in its terms to accommodate a migration to the ADGM, a jurisdiction that did not exist when the Settlement was made in 2010. The power was expressed to extend to 'any jurisdiction in the world', and the court construed those words by reference to the objective approach to construction of trust instruments confirmed in Marley v Rawlings [2014] UKSC 2 — giving effect to the natural meaning of the language unless it produces an absurd or inconsistent result. The breadth of the drafting admitted no restriction to named or pre-existing jurisdictions. Accordingly, the amendment to Clause 2.1 was within the power as drafted and effective to migrate the seat, proper law, and forum to the ADGM. For the validity of the 2021 Deed and the two February 2022 Deeds, the court drew on a cluster of authorities concerned with the scope and exercise of powers under trust instruments. The foundational principle from Pilkington v IRC [1964] AC 612 (HL) is that any exercise of a trustee's power must fall within the scope of the power and must not amount to a fraud on the power. The court applied the canon of construction that, where equity imputes intention, it does so in the manner most favourable to the valid exercise of the power — a principle sourced in Sugden on Powers (7th edition, 1845) and reflected in the older authorities of Wade v Paget (1784) 1 Bro CC 363 and Mogridge v Clapp [1892] 3 Ch 382. Inglewood v IRC [1983] 1 WLR 366 (CA) was cited on the construction and exercise of powers in trust deeds. Modern purposive construction of trust instruments was supported by Barnado's v Buckinghamshire [2018] UKSC 55 and Millar v Millar [2018] EWHC 1926 (Ch). The recently decided A v C [2026] UKPC 11 was also before the court, indicating regard to the most current Privy Council authority on trust administration. Davis v Richards & Wallington Industries Ltd [1990] 1 WLR 1511 (Ch) appears to have informed the analysis of what property passed under the DORA and the consequences of any incomplete or failed dispositions within the evolving trust structure. On the title question, the court applied orthodox bare trust and nominee principles. The terms of the Company A Deed, under which Company B held legal title to the Company A shares throughout, established a structure in which Company B acted purely as nominee for successive trustees holding beneficial and equitable title. The DORA vested that beneficial and equitable title in NX. Once that was established, Company B's capacity was correspondingly circumscribed: as bare trustee and nominee, it had no independent authority to take any action or exercise any rights as legal titleholder without NX's consent. The court cited its earlier judgment in this litigation — NX (as Trustee of the EYZ Trust) v AA (Beneficiary 1) & Others [2025] ADGM CFI 0030 — and NMC Healthcare Ltd v Dubai Islamic Bank PJSC [2023] ADGM CFI 0017 for procedural and jurisdictional propositions, maintaining consistency within the ADGM's developing body of authority. Following the hearing on 13 March 2026, the court provided a draft judgment to NX's representatives on 26 March 2026, invited further written observations on certain questions, and — having discussed those with Mr Ham — received further written submissions in Mr Cloherty's Note of 12 May 2026 before handing down the final judgment on 31 May 2026.
Applicable law
- ADGM Application of English Law Regulations 2015 — imports English trust law, including the English Trustee Act 1925 and the English Recognition of Trusts Act 1987, into the ADGM legal framework; provides the basis on which English trust law principles apply in the ADGM
- English Trustee Act 1925 — applied as ADGM law through the Application of English Law Regulations 2015; relevant to the powers of trustees, the mechanics of retirement, and the appointment of new trustees as they bear on the validity of successive trustee changes in the EYZ Trust
- English Recognition of Trusts Act 1987 — applied as ADGM law; governs choice-of-law questions for trusts with a foreign element, including the effectiveness of the migration of proper law from Cyprus to the ADGM
- ADGM Court Procedure Rules 2016 — procedural basis for the claim form and directions application brought by NX as putative trustee
- 2010 Settlement, Clause 2.4 — conferred on the trustee the power, exercisable by deed, to migrate the proper law and forum of administration to any jurisdiction in the world; the width of this clause was determinative of whether migration to the ADGM was within the power
- 2010 Settlement, Article XIX — prescribed that any amendment to the Settlement and its schedules could only be made by deed executed by all protectors and trustees then in office; governed the formalities required for the amendment of Clause 2.1
- 2010 Settlement, Article XI — provided for trustee withdrawal and for the protector to appoint a replacement trustee; relevant to the validity of successive trustee appointments culminating in NX
- 2010 Settlement, Clause 2.1 as amended — originally designated Limassol, Cyprus as the seat of the trust; validly amended to read 'The seat of the Settlement shall be in the Abu Dhabi Global Market'
- 2010 Settlement, Article IV and Clause 4.2(a) — conferred on the trustee wide powers in absolute discretion over income and capital, including the power to raise sums from capital and pay or apply them for the benefit of any one or more beneficiaries; relevant to the validity of the amending deeds
- 2010 Settlement, Article VI, Clauses 6.1, 6.2, and 6.3 — powers to exclude and add beneficiaries by deed (with protector consent) and for beneficiaries of full age to disclaim; relevant to the trust's evolving beneficiary class
- Company A Deed — the instrument under which Company B (Trustees) Limited held legal title to the Company A shares as bare trustee and nominee for the trustee for the time being of the EYZ Trust; the terms of this deed were determinative of Company B's restricted capacity following the DORA
Practical implications
Trustees, settlors, and protectors should treat this judgment as a practical reference point for migrating a trust's proper law and supervisory forum into the ADGM. Several specific points of drafting and procedural significance emerge directly from the court's analysis. First, the migration power must be drafted with sufficient breadth. Clause 2.4 of the 2010 Settlement succeeded because it referred to 'any jurisdiction in the world' without restriction, enabling migration to the ADGM even though that jurisdiction did not exist when the Settlement was executed. Trust instruments that limit migration to named or specified jurisdictions, or that impose additional consent requirements not addressed in the original deed, risk failing to achieve a clean migration. Practitioners advising on new settlements or on the amendment of existing instruments should audit the migration clause carefully before any step is taken. Second, the amendment formalities in Article XIX — requiring execution by all protectors and trustees then in office — were satisfied here. Any trustee contemplating a similar exercise must identify precisely who holds office at the date of execution and ensure all required parties execute the amending deed. Failure to satisfy those formalities would likely invalidate the amendment regardless of the width of the underlying power. Third, rather than proceeding on assumed authority following a migration, trustees should consider seeking court directions at the outset. This judgment shows that the ADGM Court will grant comprehensive declaratory relief in a single application, covering the validity of the trustee's appointment, the governing law, the forum, the validity of prior amending deeds, and the precise title position over trust assets. Consolidating these questions in one application is materially more efficient than piecemeal litigation and removes uncertainty that could otherwise cloud subsequent trustee decisions. Fourth, nominee and bare trust arrangements over trust assets require explicit deed-level documentation that is updated each time a trustee change occurs. The court's finding that Company B could not act without NX's consent depended entirely on the terms of the Company A Deed. Trustees holding principal assets through nominee vehicles should ensure the nominee documentation accurately reflects the post-DORA position — and that it is refreshed with each new appointment — so that the nominee's restricted role is beyond doubt.
Precedent value: As a decision of the ADGM Court of First Instance, this judgment is persuasive rather than binding. It constitutes significant authority within the ADGM on three distinct questions: the exercise and scope of proper-law migration clauses in offshore trust instruments, including migration to a jurisdiction not in existence at the date of settlement; the court's supervisory jurisdiction to grant comprehensive declaratory directions to a trustee administering a family trust seated in the ADGM; and the title consequences of bare trust and nominee arrangements following execution of a deed of retirement and appointment. The judgment also contributes to the ADGM's growing body of trust administration jurisprudence, building on the court's earlier ruling in the same litigation ([2025] ADGM CFI 0030) and on NMC Healthcare Ltd v Dubai Islamic Bank PJSC [2023] ADGM CFI 0017.
Action point
Trustees, settlors, and protectors of offshore discretionary trusts — particularly those with roots in Cypriot, BVI, or other common-law jurisdictions — should review as a matter of priority whether any purported migration to the ADGM has been properly executed and documented in compliance with the migration and amendment provisions of the original settlement deed, and whether nominee arrangements over trust assets have been updated to reflect each successive trustee appointment.
Source
This case note is generated from a public court record and reviewed under the firm's automated editorial quality gate. General information only — it does not constitute legal advice. For advice on a specific matter, please contact us.