Originally from Sports Arbitration: A Coach for Other Players? - ASA Special Series No. 41

1. INTRODUCTION

Most arbitration practitioners have never been involved in a trust arbitration. This is not really surprising: until recently, trust litigation and arbitration pretty much ignored each other. While trust disputes are primarily concerned with family wealth and involve individuals rather than corporations, arbitration had grown out of international commerce. Moreover, trust litigation has long been the exclusive preserve of the English legal profession as most trust jurisdictions are former English territories and as such follow developments in English law.3

However, with increasing mobility of individuals in a shrinking world, trusts are today no longer confined to the Anglo-Saxon world, but have gained wider international recognition. Since the ratification of the Hague Trust Convention4 and the introduction of jurisdictional rules for international trust disputes in 2007,5 Switzerland fully recognizes foreign trusts and Swiss courts are, if certain requirements are met, competent to adjudicate trust disputes.

Trust litigation has substantially increased during the last years, and very often, massive amounts of money are at stake. One explanation for this development is the fact that more and more settlors are leaving substantial fortunes in complex structures in different jurisdictions. Another possible reason is purely generational: many offshore-trusts were set up by the settlors in the 1960s and 1970s and today, the next generation―with its own needs and visions―takes over. Also, trusts have increasingly come under attack by “outsiders” to the trust, such as forced heirship heirs, former spouses or creditors of the settlor.6