Scylla or Charybdis? The beneficiary’s dilemma between contempt of court orders and Swiss–Liechtenstein Anti-Espionage Law

Abstract

Abstract Beneficiaries of foreign trusts and foundations are sometimes required by English and other courts to provide information and disclose documents pertaining to their beneficial interests and any related rights they may have to receive payment from the assets or income. This may be relevant in many circumstances, most importantly in family feuds and in divorce proceedings, where courts often ascertain whether such beneficial interests are to be considered beneficiaries’ property and thus whether they are to be shared with, or entirely awarded to, other litigant(s). Contempt of court orders ensure that the court’s directions to produce such evidence will be honoured and followed by the beneficiary, who will then, nolens volens, seek to obtain such information from the foreign trustee or foundation board. However, as the most recent Liechtenstein case law has revealed, this is not as easy and straight-forward as one would think. If the beneficiary is directed by the foreign court to disclose the trust or foundation documents, she or he may become liable for prosecution in Switzerland or Liechtenstein for the violation of somewhat strange, but serious, anti-espionage laws. Concurrently, the trustee or foundation board may not provide information to the beneficiary. Like shipwrecked Odysseus facing sea monsters Scylla and Charybdis, beneficiaries are then caught between two equally unpleasant options and need to venture into and navigate these uncharted waters.