By Leonard Loh
Key Takeaway*: In Fereydoon Mossanen and others v Julius Baer Trust Co (Singapore) Ltd [2026] SGHC 190 (“Mossanen”), the High Court rescued a family trust by implying into a trust deed a fallback power of amendment that the deed did not contain. In the same judgment, it struck down a protector clause on the basis that it ousted the court’s jurisdiction. The court was generous in saving the trust but strict in assessing the protectors’ powers. Settlors, trustees and their advisers should take note of both approaches, and of the uncertainty the judgment creates for arbitration clauses in trust deeds.*
Summary
The Moss Trust was a Singapore-law family trust. In 2017 the settlor gave up his power of amendment by a “Deed of Renunciation and Amendment” and vested it in his wife. She declined it. The settlor, his wife and the trustee then executed a 2019 Modification. It vested the power of amendment in the trustee and also made substantive changes, including the distribution clause in dispute. A later deed in 2024 restated the trust and contained a clause allowing the protectors to resolve “any and all conflicts and ambiguities” in the trust’s administration and interpretation in their “sole and absolute discretion” (the “Protector Resolution Clause”).
Kristy Tan J held that:
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- a term was to be implied into the 2017 deed: if the wife refused the power, the settlor would have a limited power to vest it in someone else;
- the 2019 Modification validly vested the power of amendment in the trustee, so all later amendments were valid and the current terms of the trust are those in the 2024 deed; and
- the Protector Resolution Clause was void as contrary to public policy because it ousted the court’s jurisdiction.
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Each holding is carefully reasoned. Each is also open to question.
1. The Protector Resolution Clause: why not supervisory review?
The court read “sole and absolute discretion” as making the protectors’ decisions final and conclusive, because the decisions involved no real discretion. It held that a broad power to construe a trust conclusively, or to decide disputes over its administration conclusively, ousts the court’s jurisdiction.
A less drastic reading was before the court. The claimants proposed that the protectors’ findings of fact could be set aside for breach of fiduciary duty, misdirection or perversity, and that their rulings on law could be reviewed on the merits. The independent counsel appointed by the court proposed that the protectors take a “primary role”, with the court’s supervisory jurisdiction left intact. That reading fits the court’s own test, under which the ouster ground is narrow and catches only a total exclusion of recourse to the courts.
The best argument for the court’s conclusion lies in the facts. One protector was himself a claimant. The protectors also decided the distribution dispute in favour of their own side. However, review for breach of fiduciary duty deals with that kind of conflict. Striking down the whole clause was not necessary.
2. The knock-on effect on arbitration clauses in trust deeds
The court declined to apply contract-law reasoning to third-party determination clauses in trusts. Its reasons were that beneficiaries do not agree to a trust’s terms and that the court supervises the administration of trusts. Relying on Crociani v Crociani [2014] UKPC 40, it rejected the analogy with final and binding expert determination.
That reasoning applies just as readily to arbitration clauses in trust deeds, insofar as they provide for an alternative forum of adjudication as opposed to the courts. Arbitration can however still be distinguished: it has a statutory basis, an arbitral tribunal must be independent, and its award can be set aside by the court. The real difficulty is that Singapore does not yet have legislation deeming beneficiaries to be bound by a trust arbitration clause. Mossanen is better read as a reason to legislate than as authority that such clauses are void.
3. Implying a power the settlor had renounced
The court applied the test for implied terms in Sembcorp Marine to the trust deed. Because this was a family trust, it measured efficacy by whether the purpose of the instrument could be fulfilled, not by commercial workability.
Two points of concern arise. First, the implied term gives a power of amendment back to the settlor, who had just given it up by a Deed of Renunciation. It is doubtful that he would have answered “Oh, of course!”. Second, the court accepted that there was a separate gap, a period in which no one could amend the trust. That sits uneasily with the conclusion that continued amendability was so essential that a fallback power had to be implied.
Conclusion: Lessons for Trust Practitioners
Mossanen is, in one sense, a reassuring decision. Where a trust structure has been acted on for years and the defects are ones of drafting, the court will look to the settlor’s purpose and, where it can, uphold what the parties set out to do. Practitioners should not, however, treat that willingness as a substitute for careful drafting. The rescue in Mossanen required contested litigation, a summary determination on nine issues and a court prepared to fill gaps that the deeds themselves had left open.
The more lasting message concerns protectors. A clause that appears to make a protector the final arbiter of the trust’s meaning or administration is now at real risk of being struck down in its entirety. Protector powers to resolve disputes should therefore state expressly that they are subject to the court’s supervisory jurisdiction. They should be confined, so far as possible, to discrete questions of fact, and backed by a severance provision so that any invalid part can fall away without taking the rest of the clause with it. Settlors should also think carefully about who is appointed. A protector who is, or may become, a beneficiary or a litigant invites the very conflict that troubled the court.
As for powers of amendment, the case is a reminder to provide expressly for what happens if the intended donee declines the power, dies first or loses capacity. A trust that is meant to remain flexible should say who holds the power at every stage of its life, rather than leaving the court to imply a fallback.
Finally, practitioners who include arbitration clauses in trust deeds, often to preserve confidentiality for high-net-worth families, should assess their enforceability with caution. Until Singapore legislates to bind beneficiaries to such clauses, it would be prudent to assume that a beneficiary may still go to the court, and to advise clients on that basis.
The tension between the court’s generous approach to defective amendments and its strict approach to protector clauses may yet be resolved on appeal. In the meantime, advisers should draft as though the stricter approach will prevail.
For More Information
If you have any questions about this article, please contact Selvam LLC Director Leonard Loh if you would like to discuss these updates.
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