‘1. This is an application by the claimant, Trident Trust Company (Singapore) Pte Limited, in its capacity as trustee of the Deposit Trust seeking a blessing of the court for its decision to sell the property known as 103 Marathon House, London, for a sum not less than£5.25 million . The claimant is the trustee or apparent trustee of this trust which was settled in December 2017. On the face of it, the trust was settled by the first defendant, Ms Purvi Modi. It is a discretionary trust in fairly conventional form for the benefit of Ms Modi, her children and her remoter issue. 2. The third defendant, Mr Nirav Modi, is Ms Modi’s brother. He is currently in custody in this jurisdiction awaiting extradition to India. He claims that he is the true settlor of the trust and that he was intended after a while to be appointed as a beneficiary of the trust. Alternatively, he claims that he is by virtue of being the settlor or the economic settlor of the trust for the purposes of the definitions in the trust instrument to be treated as a beneficiary. In the further alternative, he claims that he provided the deposit for the Marathon House property which was acquired in December 2017 for the purchase price of£6.25m and he claims to be entitled either to repayment of that sum or to an interest in the property accordingly. 3. The eighth defendant is the Enforcement Directorate of the Government of India. The Enforcement Directorate claims that the trust property of the Deposit Trust represents the proceeds of crime and that Mr Modi was involved in a large-scale fraud committed against the Punjab National Bank. Confiscation orders or at least one confiscation order has been made in India and the Enforcement Directorate claims to be entitled either through intergovernmental routes or otherwise to have a claim against the trust property. One of the bases of claim as it is put forward is that the trust property is subject to a pre-existing trust for the Enforcement Directorate or for the Government of India and is therefore held on a resulting or constructive trust accordingly. 4. The second defendant, Mr Levin, is the trustee of various liquidity trusts created in the United States for the benefit of the Punjab National Bank and others and he is the Chapter 11 trustee in the United States of various companies formerly associated with Mr Modi. In that capacity, he says that he has claims against the trust property but those claims have been effectively subordinated to the claims of the Enforcement Directorate and Mr Levin has essentially supported the position adopted by the Enforcement Directorate in these proceedings. 5. The first defendant has taken no active part in the proceedings. She has been served but by virtue of an agreement she has apparently reached with India she has adopted the Enforcement Directorate’s position as well. 6. Ms Modi’s adult children, who are on the face of the trust instrument beneficiaries, have been served with notice under rule 19.13 of the Civil Procedure Rules but they have not responded indicating they wish to participate in the proceedings. 7. Mr Modi does participate. He is now represented by solicitors and counsel, although at this hearing he has attended in person from prison by CVP link. 8. There have been four hearings in this claim before this one at which various directions have been given. Those hearings culminated in the most recent hearing on11 March 2024 at which I gave directions requiring both Mr Modi and the Enforcement Directorate, if they are to do so, to issue claims setting out their entitlement to or in respect of the trust assets, with such claims to be issued by7 June 2024 . 9. The property at Marathon House is in fact owned by a company wholly owned by the trustee called 103 Marathon House Limited. I accept that the court has jurisdiction to give directions to the trustee in relation to actions to be taken by the directors of a wholly-owned trust company. The question of what was to happen to the [property] was first raised at the very first hearing on7 June 2023 . After discussion with the parties, I made the following orders at paragraphs 8, 9 and 10 of the order made on that occasion: “8. The Court approves the Trustee’s decision to procure the sale of the Property on the open market, as soon as reasonably practicable, subject to the following paragraph. 9. Before concluding the sale of the Property, the Trustee should provide particulars of the proposed contract of sale to the other parties and to Ms Javeri [who I note is Mr Modi’s wife] not less than 14 days before entering into such contract. For the avoidance of doubt, such particulars may be provided to Ms Javeri by email to the address referred to in paragraph 3, above. This paragraph is subject to paragraph 4, above [which I note related to Ms Javeri]. 10. The other parties shall have permission to apply insofar as they object to the proposed contract of sale referred to in paragraph 9 above.”’
‘22. There can be no serious doubt in this case that the trustee representing the view of the director of the company which owns the property has in fact formed the opinion that the property should be sold for a price of not less than£5.25 million . I am going to consider second the third of the criteria, which is that the opinion is not vitiated by any conflict of interest. I would stress at the outset that Mr Salve does not press the point today that the decision was vitiated by a conflict of interest, although the skeleton argument which had been prepared on behalf of the Enforcement Directorate and which I have read sets out the argument why it was. The decision that I have been referred to in that context is a decision of Sir Michael Birt sitting in the Royal Court of Jersey, in Hawksford Jersey Limitedv A [2018] JRC 171, in which the trustee sought the approval of the court for a decision to sell a property. It was a case where there was a dispute about the outstanding quantum of the trustee’s fees and where the trustee anticipated that a sale of the property would enable those fees to be paid. The Commissioner discussed the issues from [46] onwards. He said this: “46. …. It is patently obvious that the Trustee has a conflict of interest in relation to its decision to sell the Property. It had outstanding fees of some£120,000 as at the end of April 2018 and a sale of the Property is the most obvious way in which it will be able to recover such fees. The existence of a conflict of interest does not of itself mean that trustees may not take a decision or that the Court will not bless such a decision.” 23. He then referred to another Jersey case, Representation of Centre [2009] JRC 109 where the Commissioner quoted another part of the decision of Hart J in Public Trustee v Cooper as follows: “47. …. ‘Where a trustee has such a private interest or competing duty, there are, as it seems to me, three possible ways in which the conflict can, in theory, successfully be managed. One is for the trustee concerned to resign. This will not always provide a practical or sensible solution. The trustee concerned may represent an important source of information or advice to his co-trustees or have a significant relationship to some or all of the beneficiaries such that his or her departure as a trustee will be potentially harmful to the interests of the trust estate or its beneficiaries. Secondly, the nature of the conflict may be so pervasive throughout the trustee body that they, as a body, have no alternative but to surrender their discretion to the court. Thirdly, the trustees may honestly and reasonably believe that, notwithstanding a conflict affecting one or more of their number, they are nevertheless able fairly and reasonably to take the decision. In this third case, it will usually be prudent, if time allows, for the trustees to allow their proposed exercise of discretion to be scrutinised in advance by the court, in proceedings in which any opposing beneficial interests are properly represented, and for them not to proceed unless and until the court has authorised them to do so. If they do not do so, they run the risk of having to justify the exercise of their discretion in subsequent hostile litigation and then satisfy the court that that decision was not only one which any reasonable body of trustees might have taken but was also one that had not in fact been influenced by the conflict.’” 24. In the Hawksford case the Commissioner went on to say that that case fell within the third category and he said: “48. …. [W]e would have expected to have seen minutes in which, when reaching its decision, the Trustee acknowledged the existence of the conflict but went on to explain why, despite the conflict, it was nevertheless in the interests of the beneficiaries/trust estate that the Property be sold.” 25. In the event, the evidence of the trustee in that case did not deal with those matters and for that and for other reasons the court was not prepared to bless the trustee’s decision. However, the Commissioner said as follows: “51. Where there is a conflict of interest, the Court will give heightened scrutiny to the decision for which approval is sought. We are not to be taken as laying down a rule that, where a conflict of interest has not been acknowledged and disclosed, the Court will invariably refuse its approval. The decision may be so obviously appropriate that the Court should nevertheless approve it. However, failure to disclose and acknowledge a conflict of interest when reaching a decision, is likely to make it much more difficult for the Court to be satisfied that the decision has not in fact been influenced by the conflict.” 26. It seems to me that this is a case like Hawksford where there is a conflict of interest affecting the trustee. A sale of the property is not only the most obvious way in which the trustee’s outstanding fees will be paid, but is the only way in which those fees are going to be met. Mr Jones submitted that, on analysis, there is no conflict because of the other circumstances which militated in favour of a sale and which are set out in Mr Munro’s fourth witness statement (and as later updated). I consider, as I have indicated, that there was a conflict but that it was not the only or the most significant matter which pressed on the trustee when deciding to sell. It had been discussed with the parties at the7 June 2023 hearing that the property needed to be sold, and it was apparent in the quite unique circumstances of this trust that one way or another it was not going to be a viable trust to continue in the future. 27. I also accept, and Mr Salve expressly accepted this himself, that there are other pressing requirements including the payment to HMRC which have to be met and for which there are no alternative sources of capital available. In those circumstances, I take the view that provided the decision is otherwise one which it is appropriate for the court to bless and provided the price which has been alighted on is the correct or appropriate price, this is a case where, despite a conflict of interest and despite that not having been acknowledged up front, it is still obvious that the decision should be blessed.’
‘12. In Public Trustee v. Cooper[2001] WTLR 901 , Hart J repeated Robert Walker J's now well-known categorisation of cases in which trustees may seek the approval of the court. These proceedings fell into the second of Robert Walker J's categories (see page 923 in Cooper), namely where there is no real doubt as to the nature of the trustees' powers and the trustees have decided how they want to exercise them “but, because the decision is particularly momentous, the trustees wish to obtain the blessing of the court for the action”. In Cooper, Hart J said at page 925 that the duties of the court in a category 2 case depended on the circumstances of each case, but that in that case, it had to be satisfied, after a scrupulous consideration of the evidence, of three matters as follows:- i) That the trustees had in fact formed the opinion that they should act in the particular way relevant to that case; ii) That the opinion of the trustees was one which a reasonable body of trustees properly instructed as to the meaning of the relevant clause could properly have arrived at; iii) That the opinion was not vitiated by any conflict of interest under which any of the trustees was labouring.’