POWERS OF FOREIGN TRUSTEES IN CURACAO
Rights of foreign trustees are recognized
With respect to the question whether a Trustee in bankruptcy appointed in a foreign country can exercise his powers in Curaçao, there is specific case-law available. In a Curaçao lawsuit the question was raised whether the (foreign) Trustees in the bankruptcy of a natural person residing in South Africa are authorized to perform acts in relation to a legal entity (in this case a private foundation) in Curaçao, which legal entity was in fact controlled by him.
According to a judgment from the Curaçao court (5 May 2017; ECLI:NL:OGEAC:2017:51; Gavin Cecil Gainsford Q.Q. and Mario Paul Walters Q.Q. vs RSA Private Foundation), the territorial effect of a bankruptcy pronounced in another country (in this case South Africa) does not imply that the South African bankruptcy seizure extends to the assets of the bankrupt present in Curaçao. However, this territorial restriction does not apply to other legal consequences of the bankruptcy. In principle, the foreign Trustees in bankruptcy are entitled to perform administration and liquidation acts in respect of assets present in Curaçao which form part of the bankrupt’s estate and to bring claims such as those at issue in this case on behalf of the bankrupt person, provided that South African law permits this (see also Dutch Supreme Court 13 September 2013, ECLI:NL:HR:2013:BZ5668; «JOR» 2014/50; Yukos II).
In appeal proceedings, RSA argued that the Trustees are not authorized to act in Curaçao, because they did not turn to the South African court, which – in RSA’s opinion – should have requested the Curaçao court to recognize them. However, according to the Curaçao Court of Appeal, such proceedings are not necessary in order for the Trustees to be considered competent under the law of South Africa to perform management and liquidation acts in another country, in cases where the law of that other country does not preclude the exercise of their powers and the law of that other country does not require recognition proceedings. The laws of Curaçao do not preclude the Trustees from exercising their powers and do not require recognition proceedings (Curaçao Court of Appeal 12 December 2017; ECLI:NL:OGHACMB:2017:146; RSA Private Foundation vs Gavin Cecil Gainsford Q.Q. and Mario Paul Walters Q.Q.). The Supreme Court has rejected the appeal in cassation.
Karel Frielink
(Lawyer/Attorney)
(17 December 2020)
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