## Facts

- The case involved shares held under an English law trust but transferred in Saudi Arabia, a jurisdiction that does not recognize the concept of trusts.
- The central dispute was whether the beneficiaries’ equitable interests in the shares persisted after a transfer executed in Saudi Arabia.
- The validity of the transfer was not contested under Saudi law, but the beneficiaries argued that their interests under English law should survive.
- The Supreme Court analyzed how English trust law and the doctrine of lex situs interact in the context of a cross-border transfer.

## Issues

1. Whether the transfer of shares held in trust in a foreign jurisdiction that does not recognize trusts, and which was valid under that foreign law, extinguished the beneficiaries’ equitable interests under English law.
2. Whether the enforcement of such a transfer, resulting in the loss of equitable interests, would violate English public policy and thus not be recognized by English courts.
3. How the lex situs rule applies to the disposition of trust assets situated abroad.

## Decision

- The Supreme Court held that the lex situs rule governed the validity of the transfer because the property (shares) was situated in Saudi Arabia at the time of transfer.
- It was determined that, since Saudi law does not recognize trusts, the beneficiaries’ equitable interests in the shares were extinguished upon valid transfer under Saudi law.
- The court rejected the argument that English public policy would prevent recognition of the transfer, stating that public policy exceptions in private international law are to be narrowly construed.
- The beneficiaries’ claims under English trust law could not override the effect of a transfer valid under the law of the location of the property.

## Legal Principles

- The lex situs rule provides that the law of the place where the property is located determines the validity of any transfer.
- Equitable interests in property are treated as proprietary and are subject to the same conflict of laws rules as legal interests.
- English courts grant recognition to foreign judgments and legal concepts unless a fundamental principle of English public policy is violated, and such exceptions are rare.
- Trusts and their effects may be disregarded in foreign jurisdictions that do not recognize the trust concept, affecting the enforceability of equitable interests.

## Conclusion

The Supreme Court clarified that in cross-border trust disputes, the lex situs rule prevails: if trust assets are located in a jurisdiction that does not recognize trusts and a transfer is valid there, beneficiaries’ equitable interests are extinguished under English law.


Akers v Samba Financial Group Ltd [2017] AC 424