Jersey government's freezing orders against Tantular trust assets upheld after ten-year battle

The case dates back to 2013, following the collapse of Indonesia-based Bank Century. Robert Tantular, former president of two companies that owned the bank, was convicted of fraud and the Indonesian authorities obtained confiscation orders against him.

However, many years previously, Tantular had settled significant assets on a Jersey trust called the Jasmine Investment Trust. A holding company of the trust had subsequently bought a SGD7.1-million apartment in Singapore for Tantular's wife and children to live in, with Credit Suisse as the mortgagee. When the Indonesian government traced the source of the funds it applied to the Jersey government for help in recovering them. In 2013, Jersey's Attorney General duly applied to the Royal Court for a freezing order (saisie judiciaire). This was granted and was followed by a second such order in 2014, based on new criminal proceedings started against Tantular in Indonesia in 2012 for embezzlement and fraud.

The Tantular family beneficiaries of the trust appealed against these orders. They argued that the Proceeds of Crime Law 1999 (the 1999 Law) and the associated Proceeds of Crime (Enforcement of Confiscation and Instrumentalities Forfeiture Orders) (Jersey) Regulations 2008 (the 2008 Regulations), under which the orders were issued, did not permit orders to be made in relation to property situated outside Jersey. The Tantular beneficiaries cited case law from England and Guernsey to argue that, because the trust property was situated in Singapore and was held through a British Virgin Islands-incorporated holding company, the Jersey courts did not have jurisdiction under the amended 1999 Law to order the saisies judiciaires over foreign-situate assets.

This argument was dismissed first by the Court of Appeal of Jersey (the Court of Appeal) and then by the Royal Court in 2020 (Tantular, 2020 JRC058), which instead decided to follow the precedent in Kaplan (2009 JLR 88). They concluded that the saisie judiciaire granted to the Indonesian government against Tantular under proceeds of crime legislation was not limited to assets in Jersey and could apply to foreign property held by a Jersey-based individual or entity.

The Jasmine Trust beneficiaries again appealed, this time to the Privy Council. The central issue of the appeal was again whether Jersey law permitted the saisies judiciaires to be made in relation to property situated outside Jersey, at least where the persons who can exercise the rights of ownership or control of that property are subject to the jurisdiction of the Jersey courts.

The Privy Council board dismissed the appeal, upholding the judgment of both the Court of Appeal and the Royal Court. In a judgment issued on 6 June 2023, it held that a wider interpretation of the legislation allowed Jersey to provide more effective cooperation and asset recovery. It noted that there are particular reasons why it is appropriate for Jersey to provide such assistance: namely that Jersey has a ‘very substantial trust industry’ and that the trust structure in this case is a ‘common form’ of Jersey-based trust.

It agreed with the Court of Appeal that an interpretation of the legislation which allows the court to make interim orders such as the saisie judiciaires in this case, which ensured that the assets of a criminal or suspected criminal are retained in Jersey pending a resolution of the issues relating to confiscation, will 'without doubt, provide significant assistance in helping to protect Jersey's reputation in financial matters'.

The Jersey Attorney General welcomed the judgment as 'significant and helpful'. He noted that it confirms that the Jersey courts have ‘jurisdiction to freeze and confiscate the proceeds of crime in an effective way’ where the government receives requests for assistance from foreign governments.

The settlement draws a line under the dispute. It allows the Attorney General to negotiate with Indonesia on sharing the GBP1.325-million net confiscated assets.

Sources

• Jersey government
• BAILII