In a pivotal ruling in Tonstate Group Ltd & Ors v Wojakovski & Ors [2024] EWHC 975 (Ch), the High Court of England and Wales issued a Bankers Trust disclosure order against a foreign trustee.

This decision is particularly noteworthy for its implications on cross-border asset recovery, as it outlines the circumstances under which the English courts may assert jurisdiction over foreign entities to aid in the recovery of misappropriated assets.

Brief Background

This case arose from a fraud perpetrated against a group of companies, where significant funds were unlawfully extracted by an individual.

Although a previous High Court judgment recognized the companies' rights to these funds, a substantial portion remained unrecovered.

To locate and reclaim these assets, the companies pursued a Bankers Trust order targeting the individual's brother, who was a trustee of a foreign trust and responsible for foreign bank accounts linked to the case.

Key Aspects of the Court's Ruling

The High Court's decision hinged on two critical jurisdictional issues:

1. Personal Jurisdiction: The court first determined that it had personal jurisdiction over the trustee. This was based on the fact that the trustee was a director of a UK company and had registered an address in the UK for service under the Companies Act 2006. This connection was deemed sufficient to subject the trustee to the court's authority, despite the primary focus being on his role as a trustee of a foreign trust.
2. Subject Matter Jurisdiction: The court then addressed the question of whether it could regulate the trustee's conduct concerning assets and information located abroad. Distinguishing this case from the earlier decision in Mackinnon v Donaldson, Lufkin & Jenrette [1986] 1 Ch 482, the court found that there was a sufficient connection to England to justify its intervention. The court’s willingness to grant the order, despite the foreign elements, highlights its commitment to supporting the recovery of assets when a clear link to England exists.

Impact on Cross-Border Litigation

This ruling has significant ramifications for parties involved in international disputes, particularly those seeking to recover assets held in offshore trusts or foreign bank accounts.

The decision illustrates that English courts are prepared to exercise their jurisdiction to compel foreign entities to disclose information and documents necessary for asset recovery, provided there is a meaningful connection to England and Wales.

Conclusion

The High Court’s decision to issue a Bankers Trust order in this case represents a notable expansion of its jurisdiction in the realm of cross-border asset recovery.

It sets an important precedent for future cases where misappropriated assets are hidden in foreign jurisdictions, offering a valuable legal tool for claimants seeking justice beyond domestic borders.

Read our full guide on disclosure orders.