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IV Trust Arbitration as a Matter of International Law, 21 Enforcement of Foreign Arbitral Awards Arising from an Internal Trust Arbitration: Issues Under the New York Convention

Sarah Ganz

From: Arbitration of Trust Disputes: Issues in National and International Law

Edited By: SI Strong, Tony Molloy (Consultant Editor)

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 06 June 2023

Arbitrability — Arbitral agreements — Arbitral tribunals — Arbitrators

(p. 494) 21  Enforcement of Foreign Arbitral Awards Arising from an Internal Trust Arbitration

Issues Under the New York Convention

I.  Introduction

21.01  As the field of trust arbitration develops, one important issue involves whether and to what extent the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly referred to as the New York Convention (Convention), can be used to assist with the international enforcement of an award arising from arbitration of an internal trust dispute.1 The Convention, which has been adopted (p. 495) in more than 150 states,2 makes the enforcement of foreign arbitral awards in contracting states generally much easier than the enforcement of foreign judgments by, inter alia, imposing a presumptive obligation to enforce arbitral awards subject to only a limited number of grounds on which enforcement may be refused.3 Can trust awards profit from this favourable enforcement regime, and if so, to what extent? What specific issues, if any, are trust awards likely to face if enforcement is sought under the Convention? This chapter will attempt to address these questions by looking at the different grounds that allow a domestic court to refuse enforcement under the Convention and analysing the problems that a party trying to enforce a trust award could potentially face. As will be seen, several grounds for refusing enforcement under the Convention that usually play a negligible role in other contexts can pose potentially significant obstacles to the enforcement of a trust award.

21.02  The chapter will proceed first by examining the scope of the New York Convention under Article I(3), focusing on whether a trust can be characterized as being ‘commercial in nature’. The discussion will then consider the grounds for refusal of enforcement under Article V(1) of the Convention, focusing on issues of invalidity (such as consent and form requirements) and incapacity as well as lack of proper notice and representation.4 Lastly, the chapter will examine whether the doctrines of non-arbitrability and public policy, as applied in the place of enforcement, may render an award unenforceable under Article V(2) of the Convention.

II.  The Scope of the Convention: The ‘Commercial’ Reservation under Article I(3)

21.03  In order to benefit from the Convention’s enforcement regime, a trust award must fall within the scope of the Convention. Article I(3) of the Convention permits contracting states to limit that scope by, inter alia, making an express declaration (p. 496) restricting their obligations to ‘differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the State making such declaration’.5 When a contracting state in which enforcement of a trust award is sought has adopted such reservation, the nature of a trust as commercial or non-commercial will therefore be relevant in determining whether the favourable enforcement regime of the Convention will apply.

21.04  Approximately one-third of contracting states, including China, Canada, India, and the United States, have adopted a ‘commercial’ reservation.6 However, a considerable number of jurisdictions, such as the United Kingdom, the Bahamas, Malta, Liechtenstein, and Singapore, that are active in international trust law have not adopted such reservation.7 The ‘commercial’ reservation may nevertheless become relevant even with regard to trusts in these jurisdictions, as it is not uncommon for some or all of the assets not to be located in the trust jurisdiction, thereby requiring enforcement to be sought elsewhere, including, perhaps, in jurisdictions that have adopted a commercial reservation.

Definitions of ‘Commercial’

21.05  Article I(3) does not define the term ‘commercial’ and instead leaves this definitional matter to the law of the contracting state making such declaration. Whether or not a legal relationship—for our purposes, a trust—will be considered ‘commercial’ will therefore depend on the approach taken by the domestic courts in the enforcing state.8

21.06  Domestic courts have generally adopted a broad interpretation of the term ‘commercial’.9 For example, US courts have considered employment contracts,10 shareholder disputes,11 and anti-trust and other public law claims12 to be (p. 497) commercial in nature, thereby taking such matters outside the scope of the Article I(3) restriction. While these decisions do not provide a general definition of the term ‘commercial’ that can be directly applied to trust disputes, those cases are evidence of a general willingness to interpret the term generously and expand its scope beyond more traditional commercial transactions involving a bargained-for exchange. Moreover, where there is uncertainty as to whether a dispute is ‘commercial’, some domestic courts have adopted a presumption in favour of arbitration.13

21.07  Such broad interpretations of the term ‘commercial’ cover, as one author has summarized, all relationships ‘involving an economic exchange where one (or both) parties contemplate realizing a profit or other benefit’.14 Sometimes the term ‘commercial’ is afforded an even wider interpretation, covering disputes relating to any pecuniary or economic interest.15

21.08  A broad interpretation of ‘commercial’ is also in line with interpretative guidance given in the context of Article 1 of the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (Model Law), which provides that an arbitration must be ‘commercial’ to fall within the scope of the Model Law. The Report of the United Nations Commission on the Model Law, the terms of which are included in a footnote to Article 1 of the Model Law, notes that ‘[t]he term “commercial” should be given a wide interpretation’, and goes on to list, non-exhaustively, a broad range of relationships that should be considered as commercial in nature.16 There has been a tendency for domestic courts to rely on that wide description when interpreting an Article I(3) reservation.17

(p. 498) 21.09  On rare occasions, domestic courts have adopted a more narrow interpretation of the ‘commercial’ exception.18 However, these appear to be relatively isolated decisions, often relating specifically to employment disputes.

Trusts as ‘Commercial’ Relationships

21.10  In the context of trusts, the generally broad definition of ‘commercial’ adopted by domestic courts should in many cases lead to the characterization of trusts as ‘commercial’. That conclusion is certainly true for trusts which are commonly defined as ‘commercial’ trusts, that is, trusts considered to be the product of negotiations between parties resulting in ‘a trust that implements bargained-for exchange’.19 Examples of these widespread types of instruments include trusts used by parties to provide security in a commercial transaction,20 to finance mortgage or credit-card debt,21 or to invest funds under a pension scheme.22 In such arrangements, a trust would undoubtedly be considered ‘commercial’ under the applicable domestic law, since such vehicles ‘are expressly created for business purposes’.23

21.11  Yet there are other types of trusts which may not be characterized as commercial per se. These instruments are often referred to as donative or personal trusts, or, somewhat confusingly in the current context, ‘non-commercial’ trusts. These include, for example, charitable trusts or trusts involving a donative transfer of property to a family member upon death.24 The distinction is primarily drawn on the basis that the beneficiary is merely a recipient of a gift and is ‘not required or expected to do more than what has been given for his benefit’.25 Trust awards relating to such matters may appear problematic under the ‘commercial’ exception, as they do not fit comfortably even within a relatively broad definition of ‘commercial’ that requires an economic exchange between two parties and the realization of a profit or other benefit.

(p. 499) 21.12  One possible basis for courts nevertheless to characterize such trust disputes as ‘commercial’ may be to limit their consideration to whether the transaction involved is itself ‘commercial’, rather than focusing on the motive behind the transfer. Thus, one commentator has noted that the underlying transaction involved in both donative and commercial trusts is essentially the same: ‘In either case, the wealth-holder places property at the trustee’s disposal in reliance upon the safeguards of the trust form’, which is why ‘not much turns on the distinction between donative and commercial trust’.26 If this view were adopted, the motivation of the settlor—whether to transfer the assets ‘gratuitously’ or to invest in a company with the hopes of seeking profit—would be irrelevant for the purposes of determining whether the transaction itself is ‘commercial’. Such focus on the underlying relationship and transaction involved may help to classify a donative or personal trust more easily as ‘commercial’, as both the legal relationship existing between the trustee and settlor and the transfer of assets to the beneficiary would arguably satisfy the Article I(3) exception.27

21.13  Not many problems should arise with regard to so-called ‘non-commercial’ trusts in jurisdictions that define commercial disputes very broadly, that is, as those relating to any pecuniary or economic interests. Most ‘non-commercial’ trusts are likely to meet this criterion. For example, a trust involving a donative transfer, say for family wealth planning purposes, will almost always relate to the transfer of a pecuniary interest.28

21.14  However, in other jurisdictions, there remains an appreciable risk that purely donative or charitable trust disputes may be considered ‘non-commercial’, with the consequence that the award would fall outside the scope of the Convention. This risk can only be entirely avoided if the award debtor chooses an enforcing state that has not adopted the commercial exception. However, that option may not always (p. 500) be available, since the place of enforcement is usually determined by where the award debtor has assets.

III.  Article V(1): Invalidity, Incapacity, Notice, and Representation

21.15  Turning to the specific grounds for refusal of enforcement under Article V(1) of the Convention, trust awards may face particular challenges on the grounds of invalidity of the arbitration agreement, incapacity, lack of notice, and inadequate representation. These grounds have to be raised by the party resisting enforcement, who also carries the burden of proof.29 Moreover, even if the party is successful in discharging that burden, the enforcing court is not required to refuse enforcement under Article V(1), since the language regarding enforcement is discretionary (‘enforcement [of the award] may be refused’).30


21.16  Under Article V(1)(a) of the Convention, an award may not be enforced if the underlying arbitration agreement ‘is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made’.31 Article V(1)(a) specifies the law that will apply to determine issues of invalidity, therefore superseding the conflict-of-laws provisions in the jurisdiction where enforcement is sought. In the absence of the parties’ explicit agreement to the law applicable to the arbitration agreement, it is generally presumed that the law governing the main contract also applies to the arbitration clause.32 Where no applicable law has been designated by the parties, the law of the country where the award was made will be applied (the lex situs).

21.17  Invalidity as a ground for refusal of enforcement can potentially raise serious hurdles to enforcement of trust awards. Any party trying to enforce such award must therefore consider whether the other side may be precluded from raising this ground for refusal.33 The following section will address the preliminary question (p. 501) of preclusion first, before turning to some specific issues of invalidity in the trust context. In particular, the discussion will consider issues of consent of the relevant parties to the underlying arbitration agreement as well as form requirements for the arbitration agreement.34

(a)  Preclusion

21.18  It is generally accepted that a party may be precluded (or estopped) from raising arguments as to the invalidity of the arbitration agreement at the enforcement stage if that party failed to do so during the arbitral proceedings.35 For example, a German court held that ‘[i]t can be left open whether the parties validly concluded an arbitration agreement in writing, as required by Art. II(1) and (2) Convention, since the defendant participated in the arbitration without raising any objection and is therefore estopped from relying on a formal defect.’36 It follows that, even if issues arise in a trust dispute with regard to the validity of the arbitration agreement (eg whether the beneficiaries have consented to the arbitration), but the losing party failed to raise that issue, that party may be estopped from arguing that point at the later enforcement stage.

21.19  On occasion, courts have refused to apply the principle of preclusion to an objection that there was no consent to the arbitration agreement.37 Some other courts have done so where issues of form were concerned.38 These decisions are difficult to (p. 502) square with the general principle of estoppel, which does not provide any basis for differentiating between formal objections regarding the validity of the arbitration agreement and substantive objections.39 Some courts have also attempted to extend the notion of preclusion, holding that if there are grounds to challenge an award at the seat of the arbitration and the losing party has failed to do so, that party would be estopped from challenging the award on that basis at the enforcement stage.40 However, it seems difficult in this context to establish any contradictory behaviour by the losing party or reliance by the other side which could justify a finding of preclusion, since the losing party is not bound to initiate set aside proceedings.41 The situation may be different if the losing party did initiate set aside proceedings but failed to raise the particular objection now in question.42

(b)  Arbitration agreement and consent

21.20  Consent is one of the cornerstones of arbitration.43 Article V(1)(a) of the Convention gives effect to this elementary principle by allowing a domestic court to refuse enforcement where there is no consent and therefore no valid arbitration agreement between the parties.

21.21  This ground for non-enforcement poses particular problems in the context of trust awards for two reasons. First, a trust is set up by a settlor through a trust deed or a unilateral declaration of trust which may contain an arbitration clause by which the settlor indicates a desire to submit future trust disputes to arbitration. Although such disputes will commonly involve trustees and beneficiaries, usually neither will have participated in setting up the trust containing the arbitration clause. This scenario bears little resemblance to the typical bilateral contract scenario where two parties agree to arbitrate, and raises the question as to whether and how trustees and beneficiaries can be considered to have consented to such clause. Second, and closely connected, there is considerable controversy as to whether a trust is a contract. This controversy has had significant ramifications on the question of consent to and enforceability of the arbitration agreement (and by consequence, the trust award).

(p. 503) Consent of trustees and beneficiaries

21.22  The requirement of consent by the trustee to arbitration generally poses far fewer problems than that of the beneficiary. It is often possible to establish a contractual relationship between settlor and trustee that includes an arbitration agreement, for example in cases where the arbitration clause states that by accepting office, the trustee has or is deemed to have agreed to the arbitration agreement in the trust deed44 or when the arbitration clause is inserted in the contract of appointment or another side agreement.45 While such specific wording and arrangements certainly increase the enforceability of the trust award and are therefore recommended, there are good arguments that even if no such specific precautions are included, the trustee agreed to the arbitration clause contained in the trust deed simply by agreeing to act under the terms of the trust.46

21.23  Establishing the consent of beneficiaries could prove more challenging. As internal trust disputes will frequently involve the beneficiaries as parties (either in trustee–beneficiary or intra-beneficiary disputes), this could potentially pose a significant obstacle to the enforcement of trust awards. The difficulty can be ascribed to the fact that the beneficiary, in contrast to the trustee, does not formally accept any office under the trust, does not normally sign the trust deed, and will sometimes not even be aware of the trust.47 The situation becomes even more problematic with regard to beneficiaries who are minors, not yet born, or not yet ascertained.

21.24  The question of how a third party ‘non-signatory’—here, the beneficiary—can be bound by an arbitration agreement is, of course, not limited to trust disputes and has been widely discussed in a variety of contexts.48 Concepts developed to bind such parties in other contexts can provide some useful insights into the theoretical underpinnings of these principles as well as a number of possible solutions in trust disputes. However, the application of these concepts is far from firmly established and homogeneous in domestic systems even in other arbitration contexts. In trust arbitration, the uncertainty is further exacerbated by the debate as to the contractual nature of trusts, a debate which is underlying much of the criticism levelled (p. 504) against the solutions advanced to bind beneficiaries to an arbitration agreement, as discussed below.

21.25  Some jurisdictions have sought to avoid the issues surrounding consent in trust arbitration by adopting legislation by which non-signatories, namely the beneficiary, are automatically bound to an arbitration agreement in a trust instrument. For example, Florida’s trust legislation provides that:

[a] provision in a will or trust requiring the arbitration of disputes, other than disputes of the validity of all or a part of a will or trust, between or among the beneficiaries and a fiduciary under the will or trust, or any combination of such persons or entities, is enforceable.49

The Trusts Law of Guernsey has also adopted language binding a beneficiary to an arbitration agreement under certain conditions, as have a number of other jurisdictions.50 Thus, under the laws of these countries, a challenge based on the beneficiary’s lack of consent is unlikely to be successful.

21.26  In the absence of specific legislation, the main theory that has been advanced to bind beneficiaries to an arbitration agreement is the concept of deemed acquiescence (also referred to as implied consent),51 which has also been discussed in other non-signatory contexts as a matter of arbitration law.52 This concept is based primarily on the idea that a beneficiary cannot claim the benefit of the trust without accepting the associated burden; for example, the arbitration agreement and other conditions for the transfer of the trust property. Analogies can also be drawn with the permissive approach adopted in several jurisdictions, including Switzerland53 and Germany,54 with regard to arbitration clauses in wills and statutes of foundations. (p. 505) In England, some commentators have also relied on certain language in the English Arbitration Act 1996 in support of this concept. Under Section 82(2) of the Act, a party to an arbitration agreement includes a person claiming ‘under and through’ such party. It has thus been argued that beneficiaries ‘may rationally be regarded as claiming under the settlor, since they take their beneficial interests by way of grant from him’ and will therefore also be considered a party to any arbitration provision in the trust.55

21.27  A very similar concept exists in the United States under the title of ‘conditional transfer’.56 Under that theory, the beneficiary is considered bound by the provisions of the trust to the extent his or her rights are derived from the settlor’s wishes.57 The settlor can therefore condition any benefits under the trust on compliance with the arbitration provision in the trust.58

21.28  It has also been suggested that a beneficiary can be bound under the common law principle of equitable estoppel. Related to the principle of deemed acquiescence and conditional transfer, but considered from a slightly different conceptual angle, this theory states that if a party has asserted rights under a contract, that party will be estopped from asserting that it is not bound by the obligations under the same contract, including an arbitration agreement.59 The same may apply if a beneficiary claims or receives direct benefits from the contract. Similar concepts relating to third party beneficiaries have been developed in some civil law jurisdictions.60

21.29  The solution adopted in the International Chamber of Commerce (ICC) Model Arbitration Clause for Trust Disputes combines the theory of deemed acquiescence and the (closely related) idea of conditioning the beneficiaries’ interest explicitly on the acceptance of the arbitration agreement. Under this clause, the beneficiary’s (p. 506) agreement to arbitrate is a condition precedent to the receipt of its beneficial interest in the trust, and the fact of claiming, being entitled to or receiving any benefit, interest, or right under the trust is deemed to imply that the beneficiary has agreed to arbitration.61

21.30  The decisive question for a party seeking enforcement of a trust award involving a beneficiary is of course whether any of these solutions would in practice be accepted by the domestic court of the enforcing state under the law governing the agreement to arbitrate or the lex situs. At present, there remains a question mark in this regard.62

21.31  There are some—albeit few—examples of domestic court decisions which have recognized the aforementioned principles in the context of trust disputes. For example, the Texas Supreme Court in Rachal v Reitz applied the ‘doctrine of direct benefits estoppel’ to bind the beneficiary to the arbitration agreement, stating:

[i]n accepting the benefits of the trust and suing to enforce its terms against the trustee so as to recover damages, Reitz’s conduct indicated acceptance of the terms and validity of the trust. In sum, we hold the doctrine of direct benefits estoppel applies to bar Reitz’s claim that the arbitration provision in the trust is invalid.63

Here, a beneficiary had brought a claim against the trustee, alleging, inter alia, misappropriation of trust assets. The trustee brought a motion to compel arbitration of the dispute in light of an arbitration clause in the trust which referred any disputes, including those with beneficiaries, to arbitration. Relying on the doctrine of direct benefits estoppel, the court held that ‘a beneficiary who attempts to enforce rights that would not exist without the trust manifests her assent to the trust’s arbitration clause’.
21.32  In the recent decision McArthur v McArthur, the Court of Appeal of California also appeared to recognize the principle of direct benefits estoppel in a trust dispute.65 Although the court eventually did not deem the beneficiary to be bound by the (p. 507) arbitration provision in the trust, this seems to have been due to the fact that the beneficiary had not accepted any benefits or attempted to enforce rights under the trust, but was contesting the validity of the trust:

[T]he arbitration clause in the trust would … be unenforceable against [the beneficiary] unless and until she accepts or seeks to enforce benefits under [that] trust…. In any event, whatever the national trend might be, [the appellant] fails to demonstrate that any other jurisdiction would compel arbitration under the facts of this case, where the beneficiary has not either expressly or implicitly sought the benefits of a trust instrument containing the disputed arbitration provision.66

21.33  Another example of a case applying the aforementioned principles is the recent decision of the Bombay High Court in Jayesh Shah v Kaydee Family Trust, where the court recognized the theory of deemed acquiescence and considered the beneficiaries of a trust to be bound by the arbitration agreement.67 While the decision clearly supports the binding nature of arbitration agreements for the beneficiaries in question, the underlying facts were quite unique and may have facilitated the court’s finding. Thus, it was the applicant beneficiaries of the family trust who considered themselves bound by the arbitration clause and the respondent trustees who argued that those beneficiaries were not bound. In addition, the court does not explain its conclusion in any detail, simply stating that the definition of a ‘party’ under the Indian Arbitration and Conciliation Act 1996 had to be interpreted ‘harmoniously’ and that the arbitration clause also referred to disputes of beneficiaries inter se.68 The usefulness of the decision as support for the binding nature of arbitration agreements for beneficiaries may therefore be somewhat limited.

21.34  As these decisions indicate, much may turn on the specific circumstances of the case. For example, a court may be more likely to consider there to be valid consent if it is the beneficiary who invokes the arbitration clause or where it is the beneficiary bringing a claim under the trust and thereby directly ‘benefitting’ from it. Conversely, the risk of non-enforcement is higher if the case is one of ‘pure deemed acquiescence’, without specific language in the trust instrument and where the beneficiary simply accepts the benefits and is later sued by another beneficiary.69

(p. 508) The trust as a contract

21.35  Leaving specific circumstances aside, objections have been propounded against a beneficiary being bound by an arbitration clause on a more fundamental level, primarily with respect to the characterization of a trust as non-contractual. The distinction between the nature of a trust and a contract has proved to be not only a matter of semantics but ‘drastically influence[s] the way courts approach and analyze the cases’.70 Thus, it is argued that if a trust is not characterized as a contract, the parties may not be treated as giving valid consent and the beneficiaries to the trust cannot then be bound by the agreement, leading to an invalid arbitration agreement underlying the trust award.71

21.36  This is the position taken by the Trust Law Committee of England and Wales in its 2011 report, which states that it is ‘plainly impossible’ for settlors to impose an arbitration clause because, inter alia, the trust relationship ‘is not one of contract’ and legislation authorizing contracts to impose arbitration has therefore no application to trust disputes.72 Other authors have come to similar conclusions.73

21.37  The distinction between a trust and a contract is based mainly on the notion that a beneficiary of a trust receives a beneficial interest in a trust property, whilst the beneficiary of a contract receives only a personal claim.74 The trustee who breaches his fiduciary duties under a trust will therefore not be liable for breach of contract, as trust duties are not contractual in nature.75

(p. 509) 21.38  Several courts—predominantly, but not exclusively, in the United States—have held that such distinctions are central to the finding that arbitration agreements in trusts cannot bind beneficiaries. In Schoneberger v Oelze, a decision that has since been superseded by statute, the question before the Arizona Court of Appeals was whether the arbitration provision in the relevant trust was a ‘provision in a written contract’ for the purpose of Arizona arbitral law. The court concluded:

[t]he legal distinctions between a trust and a contract are at the heart of why [the beneficiaries] cannot be required to arbitrate their claims against the defendants. Arbitration rests on an exchange of promises. Parties … may decide to exchange promises to substitute an arbitral for a judicial forum. Their agreement to do so may end up binding (or benefitting) non-signatories. In contrast, a trust does not rest on an exchange of promises. A trust merely requires a trustor to transfer a beneficial interest in property to a trustee who, under the trust instrument, relevant statutes and common law, holds that interest for the beneficiary…. The ‘undertaking’ between trustor and trustee ‘does not stem from the premise of mutual assent to an exchange of promises’ and ‘is not properly characterized as contractual’.76

21.39  This approach shows a marked difference to the decision in Rachal v Reitz and reflects a lack of general consensus amongst US courts as to whether beneficiaries can be bound by an arbitration agreement.77 While the classification of a trust as non-contractual has been challenged in legal literature, notably by John Langbein’s theory of the contractarian basis of the law of the trusts,78 it nevertheless currently appears to be the prevailing opinion.

21.40  Thus, in the subsequent case of Diaz v Bukey, the Court of Appeal of California ruled that the beneficiary of a trust who did not agree to arbitrate disputes arising under the trust could not be compelled to arbitrate on the basis that there is an important legal distinction between a trust and a third party beneficiary contract.79 (p. 510) The Court of Appeal was of the view that the general right of a third party beneficiary to sue on a contract made expressly for his or her benefit has no application where a trust has been created in favour of that party.80 While the decision in Diaz is no longer considered precedential as a result of certain specificities of California procedural law, it still provides some insight as to how (US) courts may rely on the non-contractual nature of a trust to reject the enforcement of an arbitration clause against beneficiaries.

21.41  Courts in other jurisdictions have reached similar conclusions. For example, the Delhi High Court in Ms Chhaya Shriram v Deepak C Shriram refused to bind the beneficiaries to the arbitration clause on the basis that a beneficiary:

is granted benefits by the Trust not out of any contract between him and the Trustees and the Settlor. He is not made beneficiary out of his choice but because of the desire of the Settlor. The Trust is not a contract between Settlor and the beneficiary.81

21.42  In a similar vein, the Court of Appeal of Basel in Switzerland held that a beneficiary was not bound by an arbitration clause contained in the trust deed because the beneficiary ‘is not a contractual party to the trust agreement’ and there was no other written agreement between the parties within the meaning of the Convention.82 Even though Swiss legal commentators support the concept of deemed acquiescence,83 the court does not mention this concept as a potential basis for an agreement. It remains unclear whether that is because the court did not consider it necessary to discuss the concept because it believed that it in any case did not fulfil the form requirements under the Convention (or the even stricter form requirements of a bilateral convention between Switzerland and Liechtenstein which applied in that case), or whether the concept is not thought to apply in the trust context at all. The emphasis that the court places on the ‘in writing’ requirement of the Convention, however, seems to point in the former direction.

The trust as a contract—does it matter?

21.43  Based on these decisions, it seems that a party trying to enforce a trust award involving a beneficiary could face considerable difficulties under Article V(1)(a) due to the characterization of a trust as non-contractual. However, the enforceability of trust awards also needs to be assessed in light of the (often recent) case law in favour of trust arbitration. (p. 511) Besides, the decisions refusing to bind the beneficiary to an arbitration provision shed only limited light on the enforceability of trust awards in other jurisdictions. While there is no guarantee that a trust award would be enforced in a civil law jurisdiction (as the decision of the Court of Appeal of Basel illustrates), it is conceivable that civil law jurisdictions, because of a lack of a real trust law tradition, may generally be more inclined to view the trust as a contract for the benefit of third parties84 and may be more amenable to theories such as deemed acquiescence in the trust context.85

21.44  In any case, even if a trust is considered non-contractual in nature, it is questionable whether that view is as incompatible with a beneficiary being bound by an arbitration clause in the trust deed as some of the above-mentioned decisions would suggest. Under the principle of separability, the agreement to arbitrate must be treated as severable from the underlying contract.86 The same concept should apply if the underlying instrument is not a contract but a trust.87 The fact that the trust containing the arbitration clause is not a contract should therefore not necessarily imply that there can be no valid agreement to arbitrate. Under the theory of deemed acquiescence, for example, it is conceivable that even if the trust itself is not a contract, a separate arbitration agreement comes into existence—the arbitration clause contained in the trust deed constituting the offer and the decision to accept the benefits under the trust reflecting the (deemed) acceptance.88 For example, where a clause similar to that of the ICC Model Arbitration Clause for Trust Disputes has been included in the trust instrument, the nature of the trust as non-contractual should not be detrimental to a court finding that arbitration is binding on beneficiaries, since:

[a] beneficiary … does not incur obligations under the trust deed but rather receives by bounty of the settlor benefits from the trust. Submission to arbitration is considered as a condition for benefitting under the trust [under the ICC Model Arbitration Clause for Trust Disputes]. As a consequence, any person claiming to be a beneficiary will be compelled to submit to that condition. This is in the author’s view not considered as creating a sort of forced arbitration as trusts are not contracts and no one is obliged to accept to be beneficiary of a trust. Arbitration is, by will of the settlor, one of the conditions set to draw benefits under the trust.89

(p. 512) (c)  Form requirements

21.45  The required consent of the beneficiaries is not the only hurdle that a trust award has to overcome at the enforcement stage. Article V(1)(a) refers to Article II of the Convention, which requires the arbitration agreement to be ‘in writing’. Article II(2) provides that the ‘term “agreement in writing” shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams’.

21.46  The wording of Article II has rightly been called ‘awkward’90 and even ‘worrisome’91 in the context of trust disputes, in particular regarding the involvement of beneficiaries. Indeed, because of the way the consent of trustees and in particular beneficiaries is typically expressed, the ‘in writing’ requirement could pose a significant challenge for those seeking to enforce a trust award. Thus, even if consent of the beneficiaries and trustees can be established, for example through ‘deemed acquiescence’, the resulting arbitration agreement may not be in ‘writing’, signed by both parties. Indeed, in the case of beneficiaries, it rarely will be.

21.47  The question as to whether the ‘in writing’ requirement is fulfilled where only one side (in the trust context, the settlor or possibly the trustee) signed the agreement while the other side (in the trust context, the beneficiary) only agreed orally or tacitly, has been called ‘[t]he most significant area of disagreement over Article II(2).’92 A considerable number of courts and commentators have held the ‘in writing’ requirement not to be satisfied in such situation.93 The problem here has been less whether implied consent can be sufficient per se (since it is generally accepted that it is) and more whether that implied consent needs to be evidenced in writing, for example by requesting (in other contexts) delivery of ordered goods where the offer contained an arbitration clause.94

(p. 513) 21.48  While this seems to bode ill for the enforceability of trust awards, the analysis of the actual practice of courts and interpretation of the Convention does not stop here. Thus, in line with the general ‘“pro-enforcement bias” of the Convention’95 and the generally liberal approach that courts have adopted with regard to the ‘in writing’ requirement,96 courts have shown a permissive approach where non-signatories are concerned,97 often concluding ‘that there is no requirement under the [Convention] … that an arbitration agreement be signed by all the parties thereto’.98 This reasoning applies to scenarios in which there is an arbitration agreement in writing in place between two parties which is then extended to a third party, in contrast to a two-party situation where one only agreed by implied consent. This analytical approach could arguably also apply in the trust context, in cases where there is a written and signed arbitration agreement between the settlor and the trustee, and that agreement is extended to the beneficiary by implied consent.

21.49  A party enforcing a trust award may also want to rely on the interpretative guidance provided by UNCITRAL in a recommendation on the interpretation of Article V(1)(a) of the Convention, encouraging a relaxation of existing form requirements.99 While the recommendation is not binding, it should nevertheless be taken into account by national courts as a ‘postratification understanding’ of the signatory states under Article 31(3)(a) of the Vienna Convention on the Law of Treaties.100 What exactly is meant by a ‘relaxation of form requirements’ is not specified in the recommendation, but it seems that the concepts of deemed acquiescence and conditional transfer could fall within a more expansive approach to the form requirement.101

21.50  More concretely, Article 7(3) (Option I) of the 2006 version of the UNCITRAL Model Law provides that the signature of the parties is no longer required for a valid arbitration agreement and states that the ‘in writing’ requirement is fulfilled if the content of the agreement is ‘recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct, or by other means’.102 Thus, in jurisdictions that have adopted the 2006 Model Law, the ‘in writing’ requirement should not stand in the way of those seeking to enforce a trust award where the beneficiaries may have provided implicit consent by accepting the benefit of the trust.

(p. 514) 21.51  That outcome is particularly apt because Article VII(1) of the Convention allows courts in the enforcing state to apply less stringent form requirements found in the national law of that jurisdiction. Article VII(1) would therefore allow application of the 2006 Model Law or laws of other jurisdictions, for example France or Singapore, which have abandoned form requirements altogether.

21.52  Thus, the form requirement of Article V(1)(a) constitutes a significant but not insurmountable hurdle to the enforcement of trust awards. Whether enforcement will be refused will eventually depend on the law governing the arbitration agreement or the law of the seat, with considerable divergence between the solutions adopted in different jurisdictions and considerable uncertainty remaining because of the limited case law dealing specifically with trust awards which could provide guidance.103


21.53  The lack of capacity of any of the parties to the arbitral agreement is a further ground for refusal of enforcement under the Convention. ‘Incapacity’ in this context refers to a lack of capacity to conclude a binding agreement to arbitrate.104

21.54  The Convention does not set out the specific types of ‘incapacity’ that would permit a domestic court to refuse enforcement. Instead, Article V(1)(a) provides for a choice-of-law rule for the question of capacity, referring to the ‘the law applicable to [the parties]’.105 The definition of ‘incapacity’ will therefore be contingent on the conflict-of-laws rules of the country in which the award is being enforced, which will usually refer to the personal law of the parties.106 In civil law jurisdictions, this will usually be the law of the party’s nationality, in common law jurisdictions that of the domicile, and, regarding corporations, the law of the seat of the corporation or that of incorporation.107

(p. 515) 21.55  While this ground for refusal of enforcement has been characterized as ‘rarely aris[ing]’ in practice,108 the same is not true in the context of the enforcement of trust awards. Here, potential problems arise when parties to a trust include beneficiaries who are minors or who are unborn or unascertained at the time the dispute arises. This is by no means a rare situation, since a settlor will often designate classes of beneficiaries who include minors, unborns, or unascertaineds, for example by leaving property held at death to a trustee for the benefit of the settlor’s children and unborn grandchildren.

21.56  Trust disputes involving minor, unborn, or unascertained beneficiaries give rise to two main problems under the Convention: (1) whether and how these beneficiaries can be considered bound by the agreement despite their lack of capacity to give consent to the arbitration agreement; and (2) how to ensure that their interests will be properly represented in an arbitral proceeding. The second issue is more frequently addressed in legal literature but is more closely linked to proper representation under Article V(1)(b) and arbitrability under Article V(2)(a) and will be discussed in more detail below. The first issue goes to the heart of incapacity. Whether enforcement of a trust award involving minors, unborns, or unascertaineds may be refused on the basis of incapacity will depend on whether the ‘law applicable to them’ permits a representative to legally bind the individuals to the arbitration agreement or considers them bound in other ways.

21.57  Some jurisdictions provide a clear answer to this issue in their legislation. For example, the Trusts Law of Guernsey states that an arbitration agreement may bind a beneficiary ‘whether or not yet ascertained or in existence and whether or not minors or persons under legal disability’, provided that person is properly represented.109 While the Trustee Act in the Bahamas does not explicitly address the topic, that statute provides generally for beneficiaries to be bound by the arbitration and sets out a detailed regime regarding the representation of such beneficiaries in a trust arbitration.110 Together, these provisions imply that minor, unborn, and unascertained beneficiaries can be bound by an arbitration provision in a trust.

(p. 516) 21.58  In many jurisdictions, the consent of the parents will usually be needed to bind a minor beneficiary to the trust arbitration clause.111 The situation is more difficult regarding unborn or unascertained beneficiaries, who have no predetermined representative. In trust litigation, the interests of such beneficiaries are safeguarded by representatives. In arbitration, however, a preliminary question is how these beneficiaries can be considered to be bound to arbitrate in the first place. Commentaries and case law are usually silent on this point, but it seems generally to be assumed in such circumstances that, in line with the solutions adopted in the above-mentioned trust legislation, it is sufficient if the unborn or unascertained beneficiaries are properly represented in the proceedings.112 However, it is conceivable that a domestic court might refuse enforcement based on such incapacity unless the representative agreed to the arbitration on behalf of the incapacitated beneficiary.113

Proper Notice and Representation

21.59  A party may also lodge objections to a trust award under Article V(1)(b) of the Convention, which provides that enforcement may be refused where ‘[t]he party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case.’ Article V(1)(b) is silent on which law the enforcing court should apply to determine whether these due process requirements have been met. While there is some debate on the subject, the majority of courts seems to apply the law of the state where enforcement is sought (the lex fori), while taking into account the international character of the arbitral process.114

21.60  The notice requirement may give rise to relatively complex issues in trust disputes. Trust disputes often do not resemble a typical commercial arbitration scenario of two or a limited number of relatively easily identifiable parties that need to be notified. Rather, there may potentially be a large number of beneficiaries who cannot be identified easily (or indeed at all). Such situations can typically arise in a family trust context, for example, if succession law needs to be taken into account in order to identify the interested parties.115 However, these issues can also occur in (p. 517) commercial trusts, where succession law may also be relevant, or where the set-up of the trust may otherwise complicate the identification of interested parties.116

21.61  This scenario bears some interesting resemblance with class arbitration, where the issue of notice has also been discussed.117 It also shares some common features with collective shareholder arbitration, which can equally involve a large number of parties.118 However, the practical problems to overcome—and the ensuing risk that proper notice of all relevant parties is lacking—seem to be even greater in trust arbitration. For example, the articles of incorporation may oblige all shareholders to provide a current address of service, but similar obligations would be more difficult to impose on beneficiaries.119

21.62  Problems with regard to notifying beneficiaries properly are not limited to trust arbitration. Indeed, courts have faced similar issues in trust litigation. In both cases, proper notice will often be difficult, but possible, in particular if specific provisions are made in the trust deed. However, where either the respondent or the arbitrator120 fail to take sufficient care in identifying all relevant parties that should be given notice of the trust dispute and in providing such notice, the enforcing court may find the award unenforceable.121

21.63  Particular issues may arise regarding the due process requirements under Article V(1)(b) where the beneficiaries are minor, unborn, or not yet identified and therefore cannot themselves be properly notified. In trust litigation, this situation is resolved by appointing a representative for the beneficiaries. In the case of minors and mentally ill persons, there will often already be a legal representative who can fulfil that role. In other cases—for example, unborn beneficiaries—the court will (p. 518) either appoint a specific person representing the interests of the beneficiaries, or, as in the United States, allow a beneficiary whose interests are identical to those of the absent beneficiaries to represent such beneficiaries (‘virtual representation’).122

21.64  The question is whether an enforcing court would consider such solutions sufficient under Article V(a)(b). Clearly, there is little chance that the award would be considered enforceable in cases where the tribunal and named parties chose to ignore the point and minor, unborn, or unascertained beneficiaries were not represented at all. But what if the arbitral tribunal or trustee followed the advice of several commentators and appointed representatives themselves?123

21.65  Again, the solution is straightforward if there is specific legislation such as the Trust Law of the Bahamas that prescribes the mechanisms to appoint such representatives and to ensure adequate representation.124 Where there is no such legislation (as is the case in the majority of states), the question is more difficult to answer, and ‘[a] fear may well be that certain courts, even arbitration-friendly ones, may set aside an award … due to what they regard as improper or insufficient representation of parties who cannot adequately protect their own interests.’125

21.66  The answer will depend on the applicable law but also, it seems, on the specific circumstances. The basic question an enforcing court is likely to ask is whether any procedure adopted in arbitration offers equivalent representation and thereby protection for the beneficiaries in comparison to court proceedings. For example, a court is likely to consider whether the representation was fair and whether it ensured that there was no conflict of interests, such as those that might exist if the representative (eg the parent) is also a party in the proceedings.126

21.67  Another consideration may be who appointed the representative. In some jurisdictions, such appointment may only be done by the courts, at least if certain beneficiaries are involved.127 Such requirement would not bar trust arbitration involving (p. 519) minor, unborn, or unascertained beneficiaries per se, since limited court involvement in arbitration proceedings is not unknown in other contexts.128 But where such procedure is not followed in the arbitration (ie where there is no court involvement at all), the enforceability of the award could be questionable under the laws of these jurisdictions. Moreover, where the arbitrator has appointed the representative, there may also be a question on how that influences his or her impartiality towards the party thus represented, which may lead to enforcement issues under other Article V grounds.129 Finally, if an enforcing state requires court approval for the settlement of claims involving minors or the mentally ill (eg as is the case in England), it is also possible that the award may be unenforceable if such settlement has not been authorized by the courts.130

IV.  Article V(2): Arbitrability and Public Policy

21.68  Under Article V(2) of the Convention, the recognition or enforcement of an award may also be refused if ‘(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or (b) The recognition or enforcement of the award would be contrary to the public policy of that country.’ The inclusion of the words ‘the law of that country’ and ‘the public policy of that country’ subjects awards, exceptionally, to the law of the jurisdiction of the enforcing court.131 While the burden of proof lies with the award debtor (as is the case with awards challenged under Article V(1)),132 challenges based on non-arbitrability and public policy may be raised by the enforcement court ex officio.133


21.69  Arbitrability concerns the question as to what types of issues can be submitted to arbitration and what types fall within the exclusive jurisdiction of the domestic (p. 520) court.134 The arbitrability provision in Article V(2)(a) allows states to protect their public interests by reserving certain matters involving such interests exclusively to the courts.135

21.70  Arbitrability may be defined by either domestic legislation or the domestic courts; there is no universally accepted position as to what matters are arbitrable.136 While the scope of what is deemed arbitrable has broadened considerably over time and courts have generally held a wide range of subject matters to be arbitrable, there remain some uncertainties as to the arbitrability of internal trust disputes or at least certain types of internal trust disputes. As will be seen, the extent of uncertainty will to a large degree depend on the specific jurisdiction where enforcement is being sought.

(a)  Definition of arbitrability in domestic legislation

21.71  Some, mainly common law, jurisdictions have enacted specific legislation dealing with trust arbitration which can provide helpful guidance as to the arbitrability of trust disputes in these jurisdictions. For instance, Florida has enacted a statute providing for the enforceability of an arbitration clause regarding trust disputes ‘other than disputes of the validity of all or a part of a … trust’.137 Similarly, Guernsey’s trust law allows for trust arbitration with regard to claims against a trustee founded on breach of trust,138 while the Bahamas’ Trustee Act goes even further, expressly allowing the arbitration of ‘any dispute or administration question in relation to a trust’.139 While none of these statutes explicitly addresses arbitrability, their permissiveness regarding arbitration clauses in trust instruments (at least for some types of disputes) indicates that such disputes would also be considered arbitrable in the respective jurisdiction.140

(p. 521) 21.72  Other jurisdictions have not adopted specific legislation on trust arbitration but have general arbitration legislation defining arbitrability. The general trend that can be deduced from existing legislation, which is again in line with the pro-enforcement bias of the Convention, is to adopt a wide definition of arbitrability covering most, if not all, trust disputes. For example, under Swiss, Austrian, and German law, any dispute involving an economic interest will be amenable to arbitration.141 As mentioned earlier in the context of the ‘commercial’ reservation, this language should cover most trust disputes, including so-called non-commercial trusts, which will almost always relate to the transfer of a pecuniary interest.142 Accordingly, it has been noted with regard to the Swiss ‘economic interest’ definition that ‘the majority of such [trust] disputes can be arbitrated’, ‘[a]s nearly all types of trust disputes ultimately concern the distribution of private wealth.’143 There may be exceptions, but they would usually relate to very specific aspects of internal trust disputes, such as the provision of information to a beneficiary.144

21.73  In other jurisdictions, the determining factor for arbitrability is whether the rights in question can be freely disposed of.145 Under this criterion, most trust disputes should also be deemed arbitrable, since beneficiaries can dispose of their rights under the trust—for example, by disclaiming the benefits they receive under the trust.146

(b)  Arbitrability of trusts in other jurisdictions

21.74  Where domestic legislation is silent as to arbitrability, the determination whether and to what extent trust disputes can be subject to arbitration becomes more uncertain. While there have been only few instances where an enforcing court has refused in other contexts to enforce an award on the basis of non-arbitrability,147 and while some courts have adopted a presumption in favour of arbitration,148 the number of authorities dealing with arbitrability in a trust context is limited.

21.75  Most objections as to the arbitrability of trust disputes are based primarily on the concern that an arbitration clause in a trust instrument ‘ousts’ the jurisdiction of the courts.149 While most commentators address the potential ‘ouster’ argument as an issue separate to arbitrability, the question is ultimately whether a trust dispute (p. 522) can be submitted to arbitration, and it therefore seems conceptually preferable to analyse it as a question of arbitrability.150

21.76  The ‘ouster’ argument has its roots in the extensive powers which courts have traditionally exercised over the administration of trusts, which developed due to the unique nature and history of trusts.151 In many jurisdictions, a highly developed body of procedural and substantive rules exists which must be applied by national courts to internal trust disputes, and specific courts have exclusive jurisdiction with regard to such disputes. This has led to some hostility, or at least scepticism, amongst some trust lawyers and courts towards trust arbitration and has resulted in the claim that trust disputes should not be arbitrable unless there is permissive legislation in place. As the English Trust Law Committee stated:

the trust concept is itself the creature of the courts (historically the courts of equity), exercising judicial discretions as described by the Privy Council in Schmidt v Rosewood Trustees [2003] 2 AC 709, so that the legal rights of beneficiaries and trustees can be determined only by the courts.152

21.77  To assess whether concerns about the purported ouster of jurisdiction are justified and likely to lead courts to refuse enforcement based on Article V(2)(a), it is necessary to analyse more closely what underlies that concern. Several sub-issues can be identified in this regard, most of which coincide with factors that are generally taken into account by courts when assessing arbitrability.153

21.78  First, there is the concern that arbitrating internal trust disputes would place one of the parties at a disadvantage, in particular by non-application of mandatory trust law. However, as with many of the objections to the arbitrability of trust disputes, this objection fails to take into account that many (if not all) of the roles that a court fulfils in internal trust disputes can in fact also be fulfilled by an arbitral tribunal, provided that such tribunal is neutral and adheres to the required procedural standards, as it should. Mandatory provisions of law can and must be (p. 523) applied by arbitral tribunals to the same extent as courts,154 which is evidenced by arbitral tribunals considering public policy and mandatory law in other fields, such as competition law.155

21.79  A second concern is based on the notion that in order to protect the beneficiaries, the administration of the trust must be supervised by a court and that the beneficiary cannot be deprived of his or her right to apply to court to enforce the trustee’s obligations. It is argued that without such right, there is no valid trust, and courts have an ‘inherent jurisdiction to supervise, and if necessary to intervene in, the administration of trusts’.156 However, this objection is again based on the assumption that supervision, administration, and enforcement of the trustee’s obligations and protection of the beneficiaries can only be properly carried out by the courts.157 This assumption seems misconceived. Indeed,

[t]here is no reason in principle why a beneficiary could not vindicate his or her right to hold a trustee to account through an arbitral process. So long as they are enforceable, the beneficiaries’ rights—and the trustee’s corresponding obligation—exist regardless of the forum in which they are enforced.158

21.80  It is true that there are certain aspects of the courts’ involvement in trusts that at least at first sight seem to lend themselves less well to arbitration, such as issues of judicial accounting or instruction.159 Judicial accounting, for example, usually requires continuous supervision, whereas arbitral tribunals are usually established and act only with regard to a single dispute.160 However, workable solutions have been suggested for such scenarios, for example ‘establish[ing] dispute review boards, which are common on large construction projects’, and allowing a party to initiate arbitration ‘[w]here a board fails to resolve the dispute’.161 Requests for judicial instruction could be considered similar to a request for interim or provisional relief, which could lead to concurrent jurisdiction between an arbitral tribunal and a state court.162

21.81  The third objection, namely that trust disputes are often allocated to specialized courts which have exclusive jurisdiction over trust concerns, is also unconvincing. These allocations developed historically, and their aim was to allocate jurisdiction internally (p. 524) within the court system.163 However, such internal allocation does not necessarily imply an exclusive jurisdiction with regard to arbitration.164 In fact, the specialized knowledge of courts dealing with trust disputes could also be replicated in the trust context, where parties are free to appoint arbitrators specializing in that area.165

21.82  Fourth and finally, the ‘ouster’ argument relies on a mix of different objections that are all related to the need to protect the beneficiaries, particularly minor, unborn, or unascertained beneficiaries. This is exemplified by the argument that proper representation needs to be ensured by a court-appointed representative and that court approval of settlements involving such beneficiaries may be required. These arguments are very closely linked to issues of consent and adequate representation, which have been discussed earlier. As has been seen, those matters do not constitute unsurmountable objections that should lead to the non-arbitrability of trust disputes, even with regard to minor, unborn, or unascertained beneficiaries. However, while not excluding the arbitrability of trust disputes altogether, such issues may lead in some jurisdictions to the required involvement of national courts for specific matters in order for the dispute to be deemed arbitrable (eg with regard to the appointment of a representative), as already mentioned.

21.83  To counter the ‘ouster’ argument, it has also been noted that the courts in any case retain supervisory jurisdiction over arbitrations, namely at the enforcement stage.166 While the court may not be permitted to review awards on questions of law or fact, it is possible to set aside an award or refuse to enforce it on certain grounds. This argument was also articulated in the recent New South Wales Court of Appeal (Australia) decision of Rinehart v Welker.167 While the court eventually dismissed the claim for stay of proceedings on the basis of the construction of the particular arbitration agreement, Bathurst CJ noted that a claim to dismiss a trustee was arbitrable, stating:

it is my opinion that at least in circumstances where the trustee and each beneficiary have expressly agreed to their disputes being referred to arbitration, a court should give effect to that agreement. The supervisory jurisdiction of the court is not ousted. It continues to have the supervisory role conferred upon it by the relevant legislation, in this case the Commercial Arbitration Act. There may be powerful commercial or domestic reasons for parties to have disputes between a trustee and beneficiary settled privately. It does not seem to me that the matters to which I have referred above should preclude a court from giving effect to such an agreement provided the jurisdiction of the court is not ousted entirely.

The fact that an arbitrator may not have power to remove a trustee or make a vesting order does not alter this position. An arbitrator could give effect to a claim for (p. 525) removal by ordering the trustee to resign, to appoint a new trustee and to convey the trust property to that person. Such an award could be enforced as a judgment under, in this case, the Commercial Arbitration Act s 33.168

(c)  Non-arbitrability of certain categories of trust disputes

21.84  Even if trust disputes are generally considered arbitrable, there may be certain matters that may be deemed non-arbitrable by an enforcing court. Conceivably, this could include certain aspects of trust disputes, such as the construction of a trust, variations of a trust, or disputes regarding a beneficiary’s claim of another beneficiary’s share. These may be regarded by some courts as going to the ‘heart’ of the trust and the court’s inherent jurisdiction and therefore be held non-arbitrable.169 However, it follows from the foregoing discussion that there should, in principle, be no objections to the arbitrability of such disputes, with the arbitral tribunal being able to step into the shoes of the court without diminishing the protection of rights or interest involved.170

21.85  More problematic are trust disputes relating to specific topics, such as marital (and more broadly family) law and law of succession.171 Both fields will regularly play a role in internal trust disputes although such matters are often considered non-arbitrable. Thus, in certain jurisdictions, legislation explicitly declares disputes regarding personal status, capacity, and divorce as non-arbitrable.172 Some jurisdictions draw further distinctions, considering, for example, matrimonial property disputes and claims for maintenance arbitrable, whereas disputes regarding divorce and custody are non-arbitrable.173 Other jurisdictions consider disputes (p. 526) relating to the law of succession as arbitrable, but are likely to exclude issues of forced heirship.174

(d)  Conclusion

21.86  There are compelling arguments indicating that trust disputes are generally arbitrable, and this view seems to be shared by the majority of commentators.175 There remains considerable uncertainty, however, as to how domestic courts would decide this issue, with certain trust awards carrying a greater risk of unenforceability than others. For example, it is likely that an award in a purely ‘commercial’ trust dispute where all parties have capacity will be enforced, whereas enforcement is less likely with regard to disputes involving a minor. In addition, many jurisdictions exclude from arbitration certain subject matters which often play a role in trust disputes and may, if arbitrated, lead to unenforceability of the trust award.

Public Policy

21.87  Article V(2)(b) of the Convention permits a court to refuse enforcement where ‘recognition or enforcement of the award would be contrary to the public policy of that country’. The doctrine of public policy can be defined as a limited set of legal rules in domestic law from which parties are not permitted to derogate.176 The rationale behind such an exception is to provide contracting states ‘with a safety-valve allowing them to prevent the intrusion of awards into their legal system which they consider irreconcilable with it’.177 As mentioned earlier, the public policy exception in Article V(2)(b) allows courts to apply the standard found in their own national law, which may lead to differing results from country to country.178 As a result, the concept of public policy evades precise definition and can lead to a considerable degree of unpredictability.179 It is, however, clear from the drafting history of the (p. 527) Convention that the drafters sought to limit the scope of the public policy exception to issues rising to the level of ‘international’ public policy,180 which is also in line with the Convention’s general pro-enforcement outlook.

21.88  Nonetheless, despite the restrained approach that most jurisdictions have adopted to the public policy exception,181 there is a risk that an enforcing court may view an award dealing with a trust dispute as an issue of public policy. That may be the case with regard to several issues that have already been discussed above in other contexts of Article V of the Convention. In particular, the question whether trust arbitration, or some aspects of it, ‘ousts’ the jurisdiction of the courts, may be viewed in some jurisdictions not (only) as a matter of arbitrability but also as one of public policy. Similarly, courts may consider the question of whether minors, unborn, and unascertained beneficiaries can be bound by an arbitration agreement and properly represented in trust arbitration proceedings as relating to public policy.182 That approach is particularly likely where the involvement of the court in the appointment of a representative or approval of a settlement is concerned. However, these questions, while connected to public policy, are more accurately characterized as issues of consent, capacity, proper representation, and arbitrability and have been discussed in detail earlier.

V.  Conclusion

21.89  The general enforceability of trust awards under the Convention is critical to ensuring that the widely acknowledged benefits of trust arbitration183 translate into its widespread usage. The enforcement of trust awards faces numerous potential objections under the Convention. However, very few, if indeed any, of the grounds for refusing enforcement under the Convention should exclude the enforcement of trust awards as a matter of principle. Most, if not all, of the objections that may be raised, eg concerns about consent, capacity, or arbitrability, are not insurmountable and can, depending on the specific facts at hand, be addressed in a manner that is consistent with the Convention’s general pro-enforcement regime. Helpful insights can also be gained from scenarios that, at least in some aspects, bear a certain resemblance to trust arbitration, such as other non-signatory situations or collective shareholder disputes, where similar concerns have often been raised. While the specificities of each context need to be borne in mind and broad-brush (p. 528) analogies avoided, these scenarios nevertheless indicate that trust arbitration is perhaps not as unique and ‘special’ as some of its critics would suggest.

21.90  There are, moreover, a variety of ways in which a settlor or trustee may lower the risk of a refusal to enforce a trust award. This includes, in particular, the careful drafting of the trust instrument, for example by incorporating an arbitration clause dealing with the consent of beneficiaries, such as the ICC Model Arbitration Clause for Trust Disputes,184 or setting forth provisions that specify the procedures to be applied where a representation of beneficiaries is required.185

21.91  Nevertheless, one overarching issue facing the enforcement of trust awards currently remains, namely the limited guidance that exists with regard to domestic court decisions on enforcement. While it has rightly been pointed out that the case law is perhaps not as ‘thin and underdeveloped’ as is often claimed,186 it is also not extensive and widespread enough to provide the required certainty for trust clients.

21.92  It is evident that the existing insecurity and unpredictability as to how domestic courts would ultimately decide the various issues surrounding the enforcement of trust awards are in itself a hurdle to trust arbitration. It seems that only once a sizeable number of decisions have been rendered in favour of enforcing trust awards and/or a critical mass of jurisdictions has adopted trust arbitration-friendly legislation will trust arbitration really take off in the international sphere. However, as the other chapters in this book suggest, that process may be underway.


*  The author gratefully acknowledges the assistance of Stephanie Mullen in the preparation of this chapter.

1  Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 1958, 330 UNTS 38 (hereinafter New York Convention). This chapter focuses on the international enforceability of a trust arbitration award under the New York Convention. Enforcement of arbitration provisions in a trust is covered elsewhere in this book. Margaret L Moses, ‘International Enforcement of An Arbitration Provision in A Trust: Questions Involving the New York Convention’ in SI Strong (ed), Arbitration of Trust Disputes: Issues in National and International Law (Oxford University Press 2016) paras 20.01–20.76.

3  Tetiana Bersheda, ‘Is Arbitration-Friendly Switzerland Also Trust-Arbitration-Friendly?’ (2012) 18 Trusts and Trustees 348, 349 (noting the easier enforcement of awards under the Convention as one of the advantages of trust arbitration); Lawrence Cohen and Joanna Poole, ‘Trust Arbitration—Is It Desirable and Does It Work?’ (2012) 18 Trusts and Trustees 324, 325–26; SI Strong, ‘Arbitration of Trust Disputes: Two Bodies of Law Collide’ (2012) 45 Vanderbilt Journal of Transnational Law 1157, 1185–86 (hereinafter Strong, Two Bodies Collide); Georg von Segesser, ‘A Step Forward: Addressing Real and Perceived Obstacles to the Arbitration of Trust Disputes’ (2014) 20 Trusts & Trustees 37, 40 (hereinafter von Segesser, A Step Forward). Internal trust disputes address the inner workings of the trust itself and arise between some or all of the various parties to a trust, including the settlor(s), trustee(s), protector(s), and/or beneficiaries.

4  Enforcement may also be refused under Article V(1) on other grounds, such as the improper composition of the tribunal or a non-binding award. However, these grounds do not raise specific trust issues and will therefore not be discussed here.

5  New York Convention (n 1) art I(3). The second possible reservation under Article I(3), the reciprocal reservation, does not raise any specific trust-related issues and will not be considered here.

7  ibid.

8  Nigel Blackaby and others (eds), Redfern and Hunter on International Arbitration (6th edn, Oxford University Press 2015) para 11.50 (hereinafter Redfern and Hunter). See also Gary B Born, International Commercial Arbitration (2nd edn, Kluwer 2014) 303–04 (discussing limits on the freedom of Contracting States to define the term ‘commercial’).

9  Born (n 8) 299–301 (discussing national court decisions); Bernd Ehle, ‘Article I (Scope of Application)’ in Reinmar Wolff (ed), New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards: A Commentary (Beck/Hart 2012) 81–82; Hans Bagner, ‘Article I’ in Herbert Kronke, Patricia Nacimiento, and Dirk Otto (eds), Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention (Kluwer 2010) 35.

10  See eg Mitsubishi Motors Corp v Soler Chrysler-Plymouth, Inc, 473 US 614 (1985); Faberge International, Inc v Di Pino (1987) XII Yearbook Commercial Arbitration 536 (1987); Bautista v Star Cruises, 396 F3d 1289, 1300 (11th Cir 2005).

11  See eg Henry v Murphy, 2002 WL 24307, *4 (SDNY 2002).

12  See eg Mitsubishi Motors Corp, 473 US at 614.

13  ibid.

14  Born (n 8) 304.

15  9 USC ss 2, 202 (defining commerciality as ‘evidencing a transaction involving commerce’); Citizens Bank v Alafabco, 539 US 52 (2003) (noting that even if the arbitration agreement at issue did not substantially affect interstate commerce, Congress can regulate patently ‘economic’ activity as a ‘general practice’). Some authors consider this broad definition to apply more widely. Strong, Two Bodies Collide (n 3) 1186 (noting ‘most noncommercial trusts would likely fall within the prescribed definitions [of commerciality] as well since many jurisdictions’ definitions of commercial activity are so broad as to cover almost any transaction involving money’).

16  UNCITRAL Model Law on International Commercial Arbitration of 1985 with amendments as adopted in 2006, art 1, n 2, <www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf> (hereinafter Model Law).

17  Michael Pryles, ‘Reservations Available to Member States: The Reciprocal and Commercial Reservations’ in Emmanuel Gaillard and Domenico Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards—The New York Convention in Practice (Cameron May 2008) 181; Albert Jan van den Berg, ‘The New York Arbitration Convention of 1958: An Overview’ in Emmanuel Gaillard and Domenico Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards—The New York Convention in Practice (Cameron May 2008) 45.

18  See eg Judgment of 10 November 1993, Taieb Haddad & Hans Barett v Société d’Investissement Kal (1998) XXIII Yearbook Commercial Arbitration 770 (Tunisian Cour de Cassation); 5 Patel v Kanbay International Inc, 2008 ONCA 867 (Ontario Court of Appeal 2008) (dealing with Article 1 of the Model Law). See also Born (n 8) 299–302; Bagner (n 9) 33–36.

19  John H Langbein, ‘The Secret Life of the Trust: The Trust as an Instrument of Commerce’ (1997) 107 Yale Law Journal 165, 167. Domestic courts have drawn a distinction between ‘traditional’ and ‘commercial’ trusts primarily in the application of the rules of the law of trusts (eg remedies available to beneficiaries for a breach of trust by a trustee), which were originally developed in relation to land and family settlements and not to trusts in commercial transactions. See eg Patel v Shah [2005] EWCA Civ 157. See also Target Holdings Ltd v Redferns [1996] AC 421, paras 433–36; Alastair Hudson, Understanding Equity and Trusts (5th edn, Routledge 2015) 25–27.

20  Alastair Hudson, Equity and Trusts (8th edn, Routledge 2014) ch 2.5, 21.1; Langbein (n 19) 172–73.

21  Steven L Schwarcz, ‘Commercial Trusts as Business Organizations: Unraveling the Mystery’ (2003) 58 The Business Lawyer 559, 559.

22  Langbein (n 19) 168; ibid 170–77 (containing further examples); Schwarcz (n 21) 560.

23  Strong, Two Bodies Collide (n 3) 1186.

24  Langbein (n 19) 167.

25  Patel, [2005] EWCA Civ at 157, para 33.

26  Langbein (n 19) 186. See also paras 21.35–21.42 (reflecting different views on the contractual nature of a trust).

27  That may be more doubtful with regard to the trustee–beneficiary or intra-beneficiary relationships, where even the focus on the underlying transaction may potentially not lead to a classification as ‘commercial’. However, instead of dissociating the different relationships within a trust, the preferable approach would be to focus on the trust relationship and underlying transaction as a whole.

28  Strong, Two Bodies Collide (n 3) 1186. See also David Horton, ‘The Federal Arbitration Act and Testamentary Instruments’ 90 (2012) North Carolina Law Review 1027, 1073 (‘[T]he FAA applies if the parties have agreed to arbitrate. When an executor, trustee, or beneficiary accepts fees or property under an estate plan, they fall within the FAA’s coverage. In addition, they virtually always also satisfy the statute’s final element: the necessity of a “transaction involving commerce.”’). With regard to the definition of ‘economic interest’ in the context of arbitrability, see Georg von Segesser, ‘Arbitrability in Estate and Trust Litigation’ in Rosalind Atherton (ed), Papers of the International Academy of Estate and Trust Law 2000 (Kluwer 2001) 23 (hereinafter von Segesser, Arbitrability); Tina Wüstemann, ‘Arbitration of Trust Disputes’ in Christoph Müller (ed), New Developments in International Arbitration 2007 (Schulthess 2007) 49 (hereinafter Wüstemann, Arbitration of Trust Disputes).

29  Albert Jan van den Berg, The New York Arbitration Convention of 1958 (Kluwer 1981) 9 (hereinafter van den Berg, The New York Convention).

30  Christian Borris and Rudolf Hennecke, ‘Article V General’ in Reinmar Wolff (ed), New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards: A Commentary (Beck/Hart 2012) 264; Redfern and Hunter (n 8) para 11.59; van den Berg, The New York Convention (n 29) 265–66.

31  Article V(1)(a) is closely related to Articles II(1) and (3), which provide for the recognition of valid agreements to arbitrate.

32  Patricia Nacimiento, ‘Article V(1)(a)’ in Herbert Kronke, Patricia Nacimiento, and Dirk Otto (eds), Recognition and Enforcement of Foreign Arbitral Awards (Kluwer 2010) 224. See also Born (n 8) 499–500, 563–65.

33  The question could also be raised as to whether a prior finding regarding the validity of the arbitration agreement by the arbitral tribunal or local court could have preclusive effect. However, the enforcement court will usually (within certain limits) consider the validity of an arbitration agreement de novo under Article V(1)(a). Born (n 8) 3474–77. See also Maxi Scherer, ‘Effects of Foreign Judgments Relating to International Arbitral Awards: Is the “Judgment Route” the Wrong Road?’ (2013) 4 Journal of International Dispute Settlement 587.

34  A party may also try to resist enforcement by arguing that the underlying trust was invalid. However, under the doctrine of separability, the validity of the underlying trust should generally not have any implications on the validity of the arbitration agreement. Born (n 8) 3449; Stephan Wilske and Todd J Fox, ‘Article II(3)’ in Reinmar Wolff (ed), New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards: A Commentary (Beck/Hart 2012) 182–83. See also Strong, Two Bodies Collide (n 3) 1221–28 (discussing separability in the context of trust disputes). That analysis may be different in jurisdictions such as the Bahamas, which seems to provide for the disapplication of the principle of separability in the case of trust instruments. Trustee (Amendment) Act 2011 (Bahamas), Second Schedule, para 5 (‘Neither section 7 of the Arbitration Act nor any rule of law or construction treating an arbitration agreement separate to any agreement of which it is a part shall apply in relation to a trust arbitration.’). See also SI Strong, ‘Trust Arbitration in the United States: Recent Developments Show Increasing Diversity as a Matter of Statutory and Common Law’ (2012) 18 Trusts and Trustees 659, 667–70 (hereinafter Strong, Trust Arbitration in the United States) (discussing the related issue of incapacity of the settlor).

35  The conceptual bases for preclusion may vary depending on the jurisdiction where enforcement is sought (eg good faith, venire contra factum proprium, abuse of process, etc). Born (n 8) 1472–77.

36  BayOLG, 23 September 2004, (2005) XXX Yearbook Commercial Arbitration 568, 571. See also Slaney v International Amateur Athletic Fed., 244 F3d 580, 591 (7th Cir 2001); Born (n 8) 3482–86.

37  OLG Schleswig, 20 March 2000, (2006) XXXI Yearbook Commercial Arbitration 652.

38  Corte di Cassazione, 18 September 1978, (1979) IV Yearbook Commercial Arbitration 296; OLG Frankfurt, 26 June 2006, (2007) XXXII Yearbook Commercial Arbitration 351, 353. See also Borris and Hennecke (n 30) 258–59.

39  Borris and Hennecke (n 30) 259.

40  See eg OLG Hamm, 27 September 2005, SchiedsVZ 2006, 107; OLG Karlsruhe, 3 July 2006, SchiedsVZ 2006, 335. However, there is a subsequent and more nuanced decision by the German Supreme Court. 27 April 2008, NJW-RR 2008, 1083. See also Minmetals Germany GmbH v Ferco Steel Ltd [1999] CLC 647, 661; Renato Nazzini, ‘Remedies at the Seat and Enforcement of International Arbitral Awards: Res Judicata, Issue Estoppel and Abuse of Process in English Law’ (2014) 7 Contemporary Asia Arbitration Journal 139, 142–49.

41  Paklito Investment Ltd v Klockner (East Asia) Ltd [1992] 2 HKLR 39 (Supreme Court of Hong Kong) (stating there is no requirement ‘in the New York Convention which specifies that a defendant is obliged to apply to set aside an award in the country where it was made as a condition of opposing enforcement elsewhere’); OGH Austria, 26 January 2005, (2005) XXX Yearbook Commercial Arbitration 421, 426; Borris and Hennecke (n 30) 261.

42  Born (n 8) 3488.

43  ibid 3447–48.

44  Tina Wüstemann, ‘Arbitrating Trust Disputes’ in Manuel Arroyo (ed), Arbitration in Switzerland: The Practitioner’s Guide (Kluwer 2013) para 22 (hereinafter Wüstemann, Arbitrating Trust Disputes).

45  Michael Hwang, ‘Arbitration for Trust Disputes’ in Legal Media Group (ed), Selected Essays for International Arbitration (Academy Publishing 2013) 743.

46  Strong, Two Bodies Collide (n 3) 1228; Lynton Tucker, Nicholas Le Poidevin, and James Brightwell, Lewin on Trusts (19th edn, Sweet and Maxwell 2014) para 27.272. The requirement for consideration in common law jurisdictions will usually also be met. Strong, Two Bodies Collide (n 3) 1209–10.

47  Tucker, Le Poidevin, and Brightwell (n 46) para 27.273 (discussing similar concerns with regard to successors of trustees).

48  Born (n 8) 1410–89; Stavros Brekoulakis, Third Parties in International Commercial Arbitration (Oxford University Press 2010); Redfern and Hunter (n 8) paras 2.42–2.58.

49  Fla Stat Ann s 731.401.

50  Trusts (Guernsey) Law 2007, ch 2, s 63; Paul Buckle, ‘Trust Arbitration in Guernsey’ in SI Strong (ed), Arbitration of Trust Disputes: Issues in National and International Law (Oxford University Press 2016) paras 12.01–12.64. See also Ariz Rev Stat Ann s 14-10205; Malta Trust Act, s 15A No 2 (stating ‘such [arbitration clause in the deed of trust] shall be binding on all … beneficiaries’); Trustee Act 1998 (Bahamas) s 91A(2), as modified by the Trustee (Amendment) Act 2011.

51  Lawrence Cohen and Marcus Staff, ‘The Arbitration of Trust Disputes’ (1999) 7 Journal of International Trust and Corporate Planning 203, 221; Charles Lloyd and Jonathan Pratt, ‘Trust in Arbitration’ (2006) 12 Trusts and Trustees 18, 19; Strong, Two Bodies Collide (n 3) 1210–11; Wüstemann, Arbitrating Trust Disputes (n 44) para 25. See also William H Park, ‘Non-Signatories and International Contracts: An Arbitrator’s Dilemma’ in Permanent Court of Justice (ed), Multiple Party Actions in International Arbitration (Oxford University Press 2009) 5–18.

52  Born (n 8) 1427–31.

53  Tina Wüstemann, ‘“Consent” and Trust Arbitration’ in Elliot Geisinger and Elena Trabaldo-de Mestral, Sports Arbitration: A Coach for Other Players? (2015) 41 ASA Special Series 132 (hereinafter Wüstemann, Consent). See also Tina Wüstemann and Roman Huber, ‘Trust Arbitration in Switzerland’ in SI Strong (ed), Arbitration of Trust Disputes: Issues in National and International Law (Oxford University Press 2016) paras 17.01–17.68.

54  Code of Civil Procedure, s 1066 (Germany); Christian Duve and Philip Wimalasena, ‘Part IV: Selected Areas and Issues of Arbitration in Germany—Arbitration of Corporate Law Disputes in Germany’ in Karl-Heinz Böckstiegel and others, Arbitration in Germany: The Model Law in Practice (2nd edn, Kluwer 2015) paras 89–139; Joachim Münch, in Münchener Kommentar zur ZPO (4th edn, Beck 2013) s 1066. See also Re Wynn’s Will Trust [1952] Ch 271, 276 (Eng) (‘Beneficiaries under a will take what they take purely by the bounty of the testator, and it might be said that, as they are not entitled to anything of right apart from the provisions of the will, they must take their benefits subject to the conditions which are contained in the will.’); Tennant v Satterfield, 216 SE2d 229, 232 (W Va 1975); Bridget A Logstorm, Bruce M Stone, and Robert W Goldman, ‘Resolving Disputes with Ease and Grace’ (2005) 31 ACTEC Journal 235 (discussing US law); Lloyd and Pratt (n 51) 19 (arguing that the principle in Re Wynn’s Will Trust would be applied to trusts under English law).

55  Tucker, Le Poidevin, and Brightwell (n 46) para 27.273. See also Cohen and Staff (n 51) 221; Hwang (n 45) 744; Nicholas Le Poidevin, ‘Arbitration and Trusts: Can It Be Done?’ (2012) 18 Trusts and Trustees 307, 310. But see David Fox, ‘Non-Excludable Trustee Duties’ (2011) 17 Trusts and Trustees 17, 25. For an interesting analogy to exclusive jurisdiction clauses in the context of unilateral trust instruments, see Tucker, Le Poidevin, and Brightwell (n 46) para 27.275.

56  Strong, Two Bodies Collide (n 3) 1211.

57  ibid.

58  ibid.

59  Thomson-CSF, SA v American Arbitration Association, 64 F3d 773, 779 (2d Cir 1995) (stating that if a party ‘directly benefited’ from the underlying the contract, ‘it would be estopped from avoiding arbitration’ pursuant to the arbitration clause in the contract); InterGen NV v Grina, 344 F3d 134, 142 (1st Cir 2003) (noting equitable estoppel ‘precludes a party from enjoying rights and benefits under a contract while at the same time avoiding its burdens and obligations’); Born (n 8) 1455–59.

60  Jens-Peter Lachmann, Handbuch für die Schiedsgerichtspraxis (3rd edn, Otto Schmidt 2008) paras 502–03 (discussing Germany); Münch (n 54) s 1029, para 54.

61  International Chamber of Commerce Commission of Arbitration on Trust Disputes, ‘ICC Arbitration Clause for Trust Disputes’ (2008) 19 ICC International Court of Arbitration Bulletin 9; SI Strong, ‘Institutional Approaches to Trust Arbitration: Comparing the AAA, ACTEC, ICC, and DIS Trust Arbitration Regimes’ in SI Strong (ed), Arbitration of Trust Disputes: Issues in National and International Law (Oxford University Press 2016) paras 5.01–5.135. The ICC is currently reviewing its approach to trusts.

62  Wüstemann, Arbitrating Trust Disputes (n 44) para 30.

63  403 SW3d 840, 847 (Tex 2013).

64  ibid. See also In re Blumenkrantz, 824 NYS 2d 884, 888-89 (Sur Ct Nassau County 2006) (‘[I]f the objectant has a claim against [the respondent] for breach of fiduciary or other duty, it arose from the customer agreement and she cannot simultaneously assert a claim against [the respondent] based on the agreement and seek to repudiate the arbitration clause in the agreement.’); Mary F Radford, ‘Trust Arbitration in United States Courts’ in SI Strong (ed), Arbitration of Trust Disputes: Issues in National and International Law (Oxford University Press 2016) paras 8.01–8.69 (providing extensive discussion of many US cases on trust arbitration); Strong, Two Bodies Collide (n 3) 1157–248.

65  McArthur v McArthur, 168 Cal Rptr 3d 785 (Cal Ct App 2014).

66  ibid.

67  Jayesh Shah v Kaydee Family Trust (2013) 1 SCC 641, <http://indiankanoon.org/doc/189952185/>.

68  Shradha Rakhecha, ‘The Curious Case of Arbitration of Trust Disputes’ (2013) 2 Indian Journal of Arbitration Law 165 (criticizing the decision); Mihir Naniwadekar, ‘Arbitration Clauses in Trust Deeds’ (IndiaCorpLaw, 17 March 2013), <http://indiacorplaw.blogspot.co.uk/2013/03/arbitration-clauses-in-trust-deeds.html>.

69  To increase enforceability, it has been suggested that settlors draft the trust instruments in a way ‘that a beneficiary’s interest only arises upon his or her actual acceptance of the terms of an arbitration clause’ or to restrict the beneficial class itself to those beneficiaries who have submitted to future arbitration. Andrew Holden, ‘The Arbitration of Trust Disputes: Theoretical Problems and Practical Possibilities’ (2015) 21 Trusts and Trustees 546, 550.

70  Michael P Bruyere and Meghan D Marino, ‘Mandatory Arbitration Provisions: A Powerful Tool to Prevent Contentious and Costly Trust Litigation, But Are They Enforceable?’ (2007) 42 Real Property, Probate and Trusts Journal 351, 363.

71  While the focus of this view is usually on the beneficiaries, it could also lead to the arbitration clause not being binding on the trustee, either.

72  Trust Law Committee, ‘Arbitration of Trust Disputes’, 25 November 2011, paras 1, 26 (quoting and endorsing a discussion paper prepared for the Trust Law Committee); Mark Herbert, ‘Trust Arbitration in England and Wales: The Trust Law Committee’ in SI Strong (ed), Arbitration of Trust Disputes: Issues in National and International Law (Oxford University Press 2016) paras 10.01–10.103. Note that the Trust Law Committee’s rejection of binding beneficiaries, including the rejection of the theory of deemed acquiescence, is also based on the notion that the settlor cannot oust the jurisdiction of the court. Trust Law Committee (n 72) para 28. See also Restatement (Second) of Trusts, s197, cmt b (1959) (‘The creation of a trust is conceived of as a conveyance of the beneficial interest in the trust property rather than as a contract.’); paras 21.76–21.82.

73  See eg David Brownbill, ‘Arbitration of Trust Disputes Under The Bahamas Trustee Act 1998’ in SI Strong (ed), Arbitration of Trust Disputes: Issues in National and International Law (Oxford University Press 2016) paras 13.01–13.71; Toby Graham, ‘The Problems With Compulsory Arbitration of Trust Disputes’ (2014) 20 Trusts and Trustees 20, 21–25.

74  Schoneberger v Oelze, 96 P3d 1078, 1082 (Ariz Ct App 2004), superseded by statute, Ariz Rev Stat Ann s 14-10205, as recognized in Jones v Fink, 2011 WL 601598 (Ariz Ct App 2011). See also In re Naarden Trust, 990 P2d 1085, 1088 (Ariz Ct App 2000) (‘[T]he beneficiary of a trust gains a beneficial interest in the trust property while the beneficiary of a contract gains a personal claim against the promisor.’).

75  Restatement (Second) of Trusts, s 197 cmt b (1959) (‘A trustee who fails to perform his duties … is not liable to the beneficiary for breach of contract…. The creation of a trust is conceived of as a conveyance of the beneficial interest in the trust property rather than as a contract.’); Graham (n 73) 21–25.

76  Schoneberger, 96 P3d at 1083. Even though the decision has since been superseded by statute, it may still have some influence on courts in jurisdictions without such legislation.

77  Rachal v Reitz, 403 SW3d 840 (Tex 2013). See also Radford (n 64) paras 8.01–8.69 (discussing US case law); Strong, Trust Arbitration in the United States (n 34) 664–67 (discussing US law); Strong, ‘Two Bodies Collide’ (n 3) 1177 n 91, 1209 n 262 (discussing whether a distinction needs to be drawn between legislation requiring a ‘contract’ and an ‘agreement’).

78  John H Langbein, ‘The Contractarian Basis of the Law of Trusts’ (1995) 105 Yale Law Journal 625, 627 (‘In truth, the trust is a deal, a bargain about how the trust assets are to be managed and distributed.’). See also Bruyere and Marino (n 70) 362 (‘Given the enormous changes in both the character and function of the modern trust, the contract view of a trust should be more prominent.’); FH Lawson, A Common Lawyer Looks at the Civil Law (1953) 200 (noting ‘the three-cornered relation of settlor, trustee, and [beneficiary] … is easily explained in the modern law in terms of a contract for the benefit of a third party’); FW Maitland, Equity; Also The Forms of Action At Common Law: Two Courses of Lectures (Cambridge University Press 1929) 28–29 (stating trust law ‘generally ha[d] its origin in something that we can not but call an agreement’ and noting that ‘the Chancellor begins to enforce a personal right … which in truth is a contractual right, a right created by a promise’); Strong, Two Bodies Collide (n 3) 1177–80.

79  Diaz v Bukey, 125 Cal Rptr 3d 610 (Cal Ct App 2011), review granted and opinion superseded by Diaz v Bukey, 257 P3d 1129 (Cal 2011), and case transferred by Diaz v Bukey, 287 P3d 67 (Cal 2011). The California Supreme Court granted review, which suspended the appellate court decision and made it non-precedential. Ultimately, the California Supreme Court did not decide the matter but remanded it to the Court of Appeal with directions to vacate the decision and reconsider the issue in light of the California Supreme Court decision in Pinnacle Museum Tower Association v Pinnacle Market Development, 282 P3d 1217 (Cal 2012). The case was withdrawn before the Court of Appeal could complete its reconsideration.

80  Lo v Aetna International, Inc, 2000 WL 565465 (D Conn 2000). See also In Re Calomiris, 894 A2d 408 (DC Ct App 2006) (concerning arbitration agreements in wills).

81  150 (2008) DLT 673, para 8, <http://indiankanoon.org/doc/595634/>.

82  Judgment of the Basel Court of Appeal, 29 October 2004, BJM 2007, 28, 31.

83  Wüstemann, Arbitrating Trust Disputes (n 44) para 27.

84  See eg ‘Common Law Trusts in Civil Law Courts’ (1954) 67 Harvard Law Review 1030, 1032 (‘Indeed, continental writers often speak of “le contrat du trust,” although at common law a trust need not be founded upon a contract.’). Trusts are primarily a common law device, although some civil law jurisdictions have created similar mechanisms known as foundations or associations.

85  Wüstemann, Arbitrating Trust Disputes (n 44) para 26 (discussing Switzerland).

86  Born (n 8) 350.

87  See also Christopher Koch, ‘A Tale of Two Cities!—Arbitrating Trust Disputes and the ICC’s Arbitration Clause for Trust Disputes’ (2012) Yearbook on International Arbitration 179, 201.

88  This would be more difficult to argue under the theory of a third party beneficiary contract, as this presupposes the existence of a contract to which the beneficiary could become party.

89  Wüstemann, Consent (n 53) 131. See also von Segesser, A Step Forward (n 3) 42 (discussing limitations of the theory of deemed acquiescence in cases where there is no real ‘free will’).

90  von Segesser, A Step Forward (n 3) 42.

91  Wüstemann, Arbitrating Trust Disputes (n 44) para 53.

92  Born (n 8) 683.

93  Bernhard Berger and Franz Kellerhals, International and Domestic Arbitration in Switzerland (2nd edn, Sweet and Maxwell 2010) para 404; Dorothée Schramm, Elliot Geisinger, and Philippe Pinsolle, ‘Article II’ in Herbert Kronke, Patricia Nacimiento, and Dirk Otto (eds), Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention (Kluwer 2010) 85 (stating that in this situation, ‘near-universal interpretation of Article II(2) has been restrictive’); van den Berg, The New York Convention (n 29) 186; Reinmar Wolff, ‘Article II(1), (2)’ in Reinmar Wolff (ed), New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards: A Commentary (Beck/Hart 2012) 132; Wüstemann, Arbitrating Trust Disputes (n 44) para 54 (‘In light of Arts. II(2) and V(1)(a) … it is not considered sufficient that the arbitration clause is contained in a document drafted by one party (i.e., settlor) and simply accepted orally or tacitly by the other party (i.e., beneficiary).’). For references to domestic court decisions, see Toby Landau and Salim Moolan, ‘Article II and the Requirement of Form’ in Emmanuel Gaillard and Domenico Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards – The New York Convention in Practice (Cameron May 2008) 202–18.

94  Born (n 8) 686–87.

95  Christoph Liebscher, ‘Preliminary Remarks’ in Reinmar Wolff (ed), New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards: A Commentary (Beck/Hart 2012) 21.

96  Born (n 8) 665; von Segesser, A Step Forward (n 3) 42.

97  Zisman v Leshner, No 6:08-cv-1448-Orl-31DAV, 2008 WL 4459029, *3-4 (MD Fla 2008); Born (n 8) 1489–91.

98  Born (n 8) 1489.

99  UNCITRAL Recommendation Regarding the Interpretation of Article II, Paragraph 2 and Article VII, Paragraph 1, of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, UN Doc A/61/17, Annex II (2006). See also Strong, Two Bodies Collide (n 3) 1214–16.

100  Strong, Two Bodies Collide (n 3) 1215.

101  ibid 1216; von Segesser, A Step Forward (n 3) 43.

102  Model Law (n 16). Option II of Article 7 goes even further and does not require any specific form for the arbitration agreement.

103  Born (n 8) 683–85 (discussing varying national approaches to the acceptance of tacit, oral, or implied acceptance of an arbitration provision). See also von Segesser, A Step Forward (n 3) 43. To increase the enforceability of the award, it is, wherever possible, advisable to have trustees and beneficiaries sign the trust deed or arbitration agreement and to choose an applicable law for the arbitration agreement that provides for a broad approach to form requirements or abandons them altogether.

104  Stephan Wilske and Todd J Fox, ‘Article V(1)(a)’ in Reinmar Wolff (ed), New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards: A Commentary (Beck/Hart 2012) 271.

105  Ignacio Suarez Anzorena, ‘The Incapacity Defence Under the New York Convention’ in Emmanuel Gaillard and Domenico Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards – The New York Convention in Practice (Cameron May 2008) 633–34; Nacimiento (n 32) 219; Wilske and Fox (n 104) 273.

106  Emmanuel Gaillard and John Savage (eds), Fouchard Gaillard Goldman on International Commercial Arbitration (Kluwer 1999) 242; Nacimiento (n 32) 219; Wilske and Fox (n 104) 273–74. For an approach that views Article V(1)(a) as a direct choice-of-law provision providing for the personal law of the party without reference to the choice-of-law provisions of the enforcing state, see Born (n 8) 627; Laurence Craig, William Park, and Jan Paulsson, International Chamber of Commerce Arbitration (3rd edn, Oceana 2000) para 5.02.

107  Nacimiento (n 32) 218–19.

108  Redfern and Hunter (n 8) para 2.33. See also Restatement (Third) of International Commercial Arbitration, Council Draft No 3 (23 December 2011) s 4-12, Reporters’ Notes, 176 (‘Few American cases address claims of lack of capacity as a ground for denying recognition or enforcement of an international arbitral award.’); Anzorena (n 105) 615–38.

109  Trusts (Guernsey) Law 2007, c 2, s 63.

110  Trustee Act 1998 (Bahamas) s 91B, as modified by the Trustee (Amendment) Act 2011. Trust legislation in other jurisdictions permitting trust arbitration does not address the issue of incapacitated beneficiaries. Ariz Rev Stat Ann s 14-10205; Fla Stat Ann s 731.401(2); Malta Trust Act; Mo Rev Stat s 456.2-205.1; NH Rev Stat s 564-B:1-111A; SD Codified Laws s 55-1-54; David M English, ‘Arbitration and the Uniform Trust Code’ in SI Strong (ed), Arbitration of Trust Disputes: Issues in National and International Law (Oxford University Press 2016) paras 6.01–6.14; Lee-ford Tritt, ‘Legislative Approaches to Trust Arbitration in the United States’ in SI Strong (ed), Arbitration of Trust Disputes: Issues in National and International Law (Oxford University Press 2016) paras 7.01–7.71.

111  Wüstemann, Arbitrating Trust Disputes (n 44) para 37 (discussing the case of a minor beneficiary living in Switzerland).

112  ibid paras 40, 54. Some authors seem to consider that a trust award involving minor beneficiaries is generally unenforceable. Lloyd and Pratt (n 51) 19 (suggesting that ‘extending a theory of deemed acquiescence to minors may be a step too far’); Tony Molloy and Toby Graham, ‘Editorial: Arbitration of Trust and Estate Disputes’ (2012) 18 Trusts and Trustees 279, 289.

113  While preclusion will in principle also apply in the context of incapacity, the incapacitated party will often still be incapacitated at the time it could raise the incapacity objection, meaning that the argument will rarely apply in practice. Born (n 8) 3492.

114  Maxi Scherer, ‘Article V(1)(b)’ in Reinmar Wolff (ed), New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards: A Commentary (Beck/Hart 2012) 284–85.

115  Strong, Two Bodies Collide (n 3) 1233.

116  For example, in the context of a securitization involving a commercial trust, a typical asset-backed securitization involves thousands of debts to be assigned, and some of the debtors who may require notification may be not easily traced. David Ramos Muñoz, The Law of Transnational Securitization (Oxford University Press 2010) 50.

117  SI Strong, Class, Mass, and Collective Arbitration in National and International Law (Oxford University Press 2013) paras 7.13–7.16 (hereinafter Strong, Class, Mass, and Collective Arbitration); Strong, Two Bodies Collide (n 3) 1231.

118  DIS Supplementary Rules for Corporate Law Disputes, <www.dis-arb.de/en/16/rules/dis-supplementary-rules-for-corporate-law-disputes-09-srcold-id15> (setting forth procedures for identifying and notifying concerned other persons, which could provide some guidance for similar provisions in trust deeds and trust legislation). See also SI Strong, ‘Mandatory Arbitration of Internal Trust Disputes—Improving Arbitrability and Enforceability Through Proper Procedural Choices’ (2012) 28 Arbitration International 591, 638–43 (hereinafter Strong, Mandatory Arbitration).

119  Strong, Mandatory Arbitration (n 118) 643. A possible solution has been proposed in the context of class arbitration to solve the issue of notice, namely that regard should be given to whether the claimants themselves invoke the lack of notice. Strong, Class, Mass, and Collective Arbitration (n 117) para 7.15. However, that approach may also not work in the trust context. In class arbitration, proper notice will often only be problematic on the claimants’ side (which is the side that will usually have no interest in invoking lack of notice in enforcement proceedings), whereas that is not the case in trust proceedings.

120  Some commentators consider it solely the duty of the claimant, and possibly the respondent, to ensure appropriate notification. Wüstemann, Arbitrating Trust Disputes (n 44) para 41.

121  Blaine C Janin, Note, ‘The Validity of Arbitration Provisions in Trust Instruments’ (1967) 55 California Law Review 521, 532–33; Wüstemann, Arbitrating Trust Disputes (n 44) para 41.

122  Strong, Two Bodies Collide (n 3) 1233–34.

123  Cohen and Staff (n 51) 223; David Hayton, ‘Problems in Attaining Binding Determination of Trusts Issues by Alternative Dispute Resolution’, <www.kozlaw.com/uploads/hayton_adr_paper.pdf> (suggesting such representation ‘should satisfy the requirements of natural justice and due process’); Hwang (n 45) 746; Strong, Two Bodies Collide (n 3) 1234–35; von Segesser, A Step Forward (n 3) 43 (‘Whether the same or similar methods can be used in arbitration is an oft-discussed topic, but the answer should be a clear yes.’).

124  Trustee Act 1998 (Bahamas), s 91B(3), as modified by the Trustee (Amendment) Act 2011 (granting the arbitral tribunal the same power as domestic courts to appoint representatives). Other jurisdictions refer to representation without specifying the method of appointment, including who should make such appointment. Trusts (Guernsey) Law 2007, c 2, s 63. Other countries do not mention the issue of representation at all. Ariz Rev Stat Ann s 14-10205; Fla Stat Ann s 731.401(2).

125  von Segesser, A Step Forward (n 3) 44. See also Cohen and Staff (n 51) 223.

126  Holden (n 69) 555.

127  For example, in Switzerland the appointment regarding minor beneficiaries living in Switzerland falls within the exclusive jurisdiction of the Swiss guardianship authorities in cases of conflict of interests. Wüstemann, Arbitrating Trust Disputes (n 44) para 38.

128  von Segesser, A Step Forward (n 3) 44. A practical question that may arise is whether a court would actually have jurisdiction to make such appointment in an arbitration. Tucker, Le Poidevin, and Brightwell (n 46) para 27.276. Another related question is how such involvement by a court or other authority should take place in jurisdictions where the arbitration is seated, but where, in contrast to the enforcing state, judicial or appointment by other authorities is unknown.

129  Strong, Two Bodies Collide (n 3) 1234 (discussing the trustee’s power to make such appointment).

130  Civil Procedure Rules 1992, r 21.10(1)-(2) (Eng). See also Paul Buckle, ‘Trust Disputes and ADR’ (2008) 14 Trusts and Trustees 649, 656; Hayton (n 123). But see Cohen and Staff (n 51) 222 (suggesting that this provision does not apply in the arbitration context). Some commentators view the question of court approval of a settlement as one of arbitrability. Strong, Two Bodies Collide (n 3) 1235. Others consider it to be one of capacity. Wüstemann, Arbitrating Trust Disputes (n 44) para 53.

131  Born (n 8) 3701, 3654–57, 3661–65 (discussing the international limits on the interpretation of non-arbitrability and public policy by national courts).

132  ibid 3651, 3697.

133  van den Berg, The New York Convention (n 29) 359.

134  Loukas A Mistelis, ‘Arbitrability—International and Comparative Perspectives—Is Arbitrability a National or an International Law Issue’ in Loukas A Mistelis and Stavros L Brekoulakis, Arbitrability: International & Comparative Perspectives (Kluwer 2009) para 1.6; David Quinke, ‘Article V(2)(a)’ in Reinmar Wolff (ed), New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards: A Commentary (Beck/Hart 2012) 380.

135  Quinke (n 134) 381.

136  ibid 384–85.

137  Fla Stat Ann s 731.401.

138  Trusts (Guernsey) Law 2007, c 2, s 63.

139  Trustee Act 1998 (Bahamas) s 91(A), as modified by the Trustee (Amendment) Act 2011. See also Ariz Rev Stat Ann s 14-10205; Maltese Arbitration Act 15A, s 1; Anthony Cremona, ‘Successful Arbitration of Internal Trust Disputes the Maltese Way’ (2012) 18 Trusts and Trustees 363, 367–68; Nadia J Taylor and David Brownbill, ‘Arbitration of Trust Disputes: The New Statutory Regime in the Bahamas’ (2012) 18 Trusts and Trustees 358, 359. For further examples of domestic trust legislations, such as Liechtenstein, Paraguay, and Panama, see Bersheda (n 3) 350–52; Grant Jones and Peter Pexton, ADR and Trusts: An International Guide to Arbitration and Mediation of Trust Disputes (Spiramus 2015) 135.

140  For a more limited interpretation of certain types of legislation, including the Uniform Probate Code, which has been adopted in whole or in part in thirty US states, see Strong, Two Bodies Collide (n 3) 1237 (‘[M]ost of the legislation is written in such a way that it is not clear whether the language covers mandatory arbitration provisions found in trusts. Therefore, courts could limit application of the legislation solely to arbitration agreements entered into by the trustee after the creation of the trust.’).

141  Code of Civil Procedure, s 582(1) (Austria); Code of Civil Procedure, s 1030(1) (Germany); Private International Law Statute, art 177(1) (Switzerland).

142  For a more restrictive view, see Koch (n 87) 187.

143  Wüstemann, Arbitration of Trust Disputes (n 28) 49. See also von Segesser, Arbitrability (n 28) 23.

144  Wüstemann, Arbitration of Trust Disputes (n 28) 50–51.

145  See eg Arbitration Act, art 2(1) (Spain); Civil Code, art 2059 (France); Code of Civil Procedure, art 1020(3) (The Netherlands).

146  Strong, Two Bodies Collide (n 3) 1237.

147  Domenico di Pietro, ‘General Remarks on Arbitrability Under the New York Convention’ in Loukas A Mistelis and Stavros L Brekoulakis (eds), Arbitrability: International & Comparative Perspectives (Kluwer 2009) para 5.38; Quinke (n 134) 380.

148  Mitsubishi Motors Corp v Soler Chrysler-Plymouth, Inc, 473 US 614, 636-37 (1985).

149  von Segesser, A Step Forward (n 3) 45. See also Janin (n 121) 522.

150  von Segesser, A Step Forward (n 3) 45. But see Molloy and Graham (n 112) 286 (qualifying the question as one of ‘public policy’).

151  Strong, Two Bodies Collide (n 3) 1196.

152  Trust Law Committee (n 72) para 25; ibid para 28 (stating ‘it is not open to a settlor or testator wholly to oust the jurisdiction of the court. The analysis must presumably be that the beneficiaries’ interests do not derive their validity solely from the benefaction of their settlor or testator but also at a higher level from the principles of law and equity by which the courts have elected to enforce them.’). The traditional English position prohibited trust provisions that granted a trustee the power to determine questions relating to the administration of a trust, which were held to be an attempt to oust the court’s jurisdiction. Re Raven [1915] 1 Ch 673; Re Wynn [1952] Ch 271; Graham (n 73) 25–28. See also Holden (n 69) 546.

153  These include whether and to what extent public interests are at issue, the effect of the decision on third party rights, whether the dispute involves unacceptable inequalities in bargaining power, the extent to which arbitral procedures are adequate to resolve the dispute, and the ability of arbitrators to grant required remedies prescribed by law. Born (n 8) 972–73; Strong, Two Bodies Collide (n 3) 1238.

154  Strong, Two Bodies Collide (n 3) 1197 (noting that ‘an evaluation of the principles motivating mandatory rules of trust law suggests that none of these rules would be offended by arbitration’).

155  von Segesser, A Step Forward (n 3) 46.

156  Schmidt v Rosewood Trust Co [2003] UKPC 26, 66.

157  Holden (n 69) 547.

158  ibid 548. See also Fox (n 55) 25 (‘The … objection would only have weight if the beneficiaries were denied any effective means of enforcing their interests against the trustees. If the ADR procedure had effective machinery for enforcing the outcome of the determination against the trustees, then it seems that this objection would not hold.’).

159  Strong, Two Bodies Collide (n 3) 1203–08.

160  ibid 1204.

161  von Segesser, A Step Forward (n 3) 46. See also Strong, Two Bodies Collide (n 3) 1204–05.

162  Strong, Two Bodies Collide (n 3) 1206–07.

163  ibid 1241–42; von Segesser, A Step Forward (n 3) 45.

164  In re Nestorovski, 769 NW2d 720 (Mich Ct App 2009) (rejecting the exclusive jurisdiction argument in the context of a probate dispute).

165  von Segesser, A Step Forward (n 3) 46.

166  Strong, Two Bodies Collide (n 3) 1200–03.

167  Rinehart v Welker [2012] NSWCA 95.

168  ibid paras 175–76. See also Fox (n 55) 25; Tucker, Le Poidevin, and Brightwell (n 46) paras 27.279–27.281.

169  Holden (n 69) 553 (suggesting that these and some other disputes are ‘likely to be jealously guarded by a court of equity’). See also Brown v Brown-Thill, 762 F3d 814 (8th Cir 2014) (holding a trustee removal dispute to be arbitrable but concluding that the arbitrator had exceeded his powers by exercising the exclusively judicial function of removing a co-trustee on statutory grounds rather than on an interpretation of contractual removal provisions).

170  Fox (n 55) 25; von Segesser, Arbitrability (n 28) 28.

171  Tax and insolvency law are two further areas of potential non-arbitrability that may play a role in trust disputes. A detailed discussion of arbitrability in these areas is beyond the scope of this chapter. For further discussion of the arbitrability of tax disputes, see Thomas E Carbonneau and Andrew W Sheldrick, ‘Tax Liability and Inarbitrability in International Commercial Arbitration’ (1992) 1 Journal of Transnational Law and Policy 23, 38; William W Park, ‘Arbitrability and Tax’ in Loukas A Mistelis and Stavros L Brekoulakis, Arbitrability: International & Comparative Perspectives (Kluwer 2009) 179; Quinke (n 134) 402. Regarding the more controversial issues of insolvency, see Born (n 8) 994; Christoph Liebscher, ‘Insolvency & Arbitrability’ in Loukas A Mistelis and Stavros L Brekoulakis (eds), Arbitrability: International & Comparative Perspectives (Kluwer 2009) (including country reports); Redfern and Hunter (n 8) paras 2.141–2.146.

172  See eg Civil Code, art 2060(1) (France).

173  Quinke (n 134) 396–97 (discussing Germany, Switzerland, and the Netherlands); Rolf Trittmann and Inka Hanefeld, ‘§ 1030’ in Karl-Heinz Böckstiegel and others, Arbitration in Germany: The Model Law in Practice (2nd edn, Kluwer 2015) para 21 (discussing Germany).

174  Wüstemann, Arbitrating Trust Disputes (n 44) para 27 (discussing Switzerland); von Segesser, Arbitrability (n 28) 25.

175  Cohen and Staff (n 51) 226; Le Poidevin (n 55) 312 (‘[I]t is difficult to see how an objection that an arbitration clause in a trust ousts the jurisdiction of the court can survive the decisions in Dundee Hospitals and Tuck.’); Holden (n 69) 547; Strong, Two Bodies Collide (n 3) 1244; von Segesser, A Step Forward (n 3) 45 (‘The position that [an internal trust dispute] is not arbitrable does not appear … to be sustainable.’).

176  Public policy issues are similar to those of non-arbitrability, and the terms are often used interchangeably; this is primarily because both doctrines may invalidate an award if it conflicts with the state’s public policy. Nonetheless, the doctrines are dealt with separately under Article V. This reflects the fact that objections relating to public policy can, at least in principle, be distinguished from issues of non-arbitrability, mainly because the doctrine of public policy requires that certain mandatory rules be applied to a dispute. However, such rules do not necessarily preclude arbitration of those disputes. Born (n 8) ch 6.

177  Reinmar Wolff, ‘Article V(2)(b)’ in Reinmar Wolff (ed), New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards: A Commentary (Beck/Hart 2012) 406.

178  ibid paras 408–09 (discussing international standards).

179  Julian DM Lew and others, Comparative International Commercial Arbitration (Kluwer 2003) para 26-115.

180  Born (n 8) 3647.

181  ibid 3660–62.

182  Circuit City v Adams, 532 US 105 (2001); Rinehart (n 167); von Segesser, Arbitrability (n 28) 30 (‘A unilateral arbitration clause in a last will or trust instrument will … not be considered as being contrary to Swiss public policy.’).

183  Bersheda (n 3) 349–50; Strong, Two Bodies Collide (n 3) 1181–87; von Segesser, A Step Forward (n 3) 39–41.

184  Holden (n 69) 554.

185  SI Strong, ‘Empowering Settlors: How Proper Language Can Increase the Enforceability of a Mandatory Arbitration Provision in a Trust’ (2012) 47 Real Property, Trust and Estate Law Journal 275.

186  Strong, Two Bodies Collide (n 3) 1164 (including detailed discussion of the existing case law throughout the article).