Holding Mining Titles from Civil Law Countries on Trust: an Unpredictable and Risky Exercise

Abstract

Nothing, in the authors’ view, shows the clear originality of the English legal system in quite the same way as a trust. This mechanism has evolved to be applied in a multitude of ways in extremely varied circumstances, affecting individuals (succession, incapacity, etc) and the business world (charities, security interests, etc). It is therefore quite natural that common law lawyers seek to use this mechanism in the mining industry and, for example, envisage setting up a trust over that specific asset which is a mining title. The diversity of the use of trusts is a good illustration of the pragmatic approach of a law which is concerned primarily to satisfy practical requirements. It is clear that the technique of the trust is always somewhat disconcerting for the continental lawyer insofar as it remains closely linked to the English legal system and it is difficult, indeed impossible, to understand in the traditional categories of continental law—it should be noted, for example, how the French legislator has difficulty in introducing a concept equivalent to a trust (‘fiducie’) into its legal system. However, it is with this perilous exercise in mind that legal systems inspired by French law are at time forced to recognise trusts constituted over assets situated in their countries. In the absence of international conventions governing the recognition of trusts (the Hague Convention), solutions found to the difficulties caused by trying to classify the trust into one of the categories of French law can appear unpredictable and uncertain under French private international law. In the case of a trust constituted over a mining title, these difficulties are accentuated by the application, in the name of lex rei sitae or mandatory rules, of provisions of mining law which, insofar as they relate, for example, to the indivisibility of mining titles, are likely to perturb the trust mechanism envisaged by the parties.