38. Role of the Court in administration of Foundations

(1) The Court may intervene in the administration of a Foundation to the extent its jurisdiction is invoked by a Person with Sufficient Interest or as provided by the Acting Law of the AIFC.

(2) A Foundation is not subject to continuing judicial supervision unless so ordered by the Court.

(3) Unless specifically stated otherwise, any Person with Sufficient Interest in respect of a Foundation may apply to the Court to make any order or take any action specified in this Part.

(4) If the Court has to determine whether a Person is a Person with Sufficient Interest in respect of a Foundation, the reference in subsection (1) to a Person with Sufficient Interest, for the purpose of determining that question, shall include such a Person.

39. Power of the Court to order compliance

(1) If the Court is satisfied that a person has failed to comply with:

• (a) a requirement of these Regulations, the Charter or By-laws of a Foundation; or
• (b) an obligation imposed on the person by these Regulations, the Charter or By-laws of a Foundation, the Court may order the person to comply with the requirement or obligation.

(2) If the Court is satisfied that a Foundation, acting through its Council, has failed to carry out its objects or any of them, the Court may order the Foundation to do so.

(3) An order under this section may specify the action, the person or Foundation is required to take.

40. Power of the Court to order amendment of Charter or By-laws

(1) The Court may on an application made by or on behalf of a Founder, the Foundation or a Guardian order the amendment of the Charter or the By-laws of a Foundation, if the Court is satisfied:

• (a) that the change will assist the Foundation to administer its property or to attain its objects; or
• (b) that those objects are no longer attainable and that the change will assist the Foundation to attain objects as near as reasonably possible to those objects.

(2) If the order is to amend a Foundation’s Charter, the thirty (30) day period referred to subsection 16(8) (Charter) to file an amended Charter with the Registrar shall be calculated from the date of the Court order.

(3) Without limiting subsection (1), the Court may make an order under section (1) in the event that a Foundation does not have By-laws, or that the relevant provisions of the By-laws cannot be readily ascertained or are otherwise incomplete.

(4) The Court may, on an application made by or on behalf of a Founder, in its absolute discretion and on such terms and conditions as it thinks fit, by order authorise the rectification of any error, defect or omission in the Charter or the By-laws of a Foundation.

41. Power of the Court to give directions

(1) This section applies if the Court is satisfied:

• (a) that if it gives a direction it will assist a Foundation to administer its property or to carry out its objects; or
• (b) that it is otherwise desirable for the Court to give a direction.

(2) The Court may on an application made by or on behalf of a Founder, the Foundation or a Guardian give a direction as to:

• (a) the meaning and effect of a provision or term in the Charter or By-laws of a Foundation;
• (b) the manner in which the Council is required to carry out the administration of the Foundation’s property or to carry out its objects;
• (c) the functions of the Council or of any of its members;
• (d) the functions of any other person appointed under the By-laws of a Foundation;
• (e) whether a person is a Qualified Recipient of a Foundation;
• (f) the rights of Qualified Recipients under a Foundation as between themselves or as between themselves and the Foundation; or
• (g) such other matters as the Court considers relevant to the Foundation, its Charter, its By-laws, the administration of its property or the carrying out of its objects.

(3) The Court may, in addition to giving a direction under subsection (2), make such an order as it thinks fit to give effect to the direction.

42. Power of the Court to protect interests under a Foundation

(1) The Court may in any proceeding under this Part by order appoint a person to protect the interests of a person who the Court is satisfied is a Qualified Recipient under a Foundation, where the Court is satisfied that the person is unable to act on his, her or its own behalf and may by order determine the terms of such appointment, remove such person and give directions as to service of such person.

(2) A person so appointed may represent the person whose interests he has been appointed to protect in any dealing with the Foundation or in any proceeding under this Part.

(3) Where a representative has been appointed under subsection (1), no settlement affecting a person to whom subsection (1) applies shall be valid without the approval of the Court.

43. Power of the Court to take action on behalf of others

(1) This section applies where the Court is satisfied that a person has failed to comply with:

• (a) a requirement of these Regulations, the Charter or By-laws of a Foundation; or
• (b) an obligation imposed on the person by these Regulations, the Charter or By-laws of a Foundation.

(2) The Court may, by order, require the Registrar comply with the requirement or obligation on behalf of the person who has failed to do so.

(3) The Court must not do so unless it is satisfied:

• (a) that to do so will assist the Foundation in the administration of its property or the attainment of its objects; or
• (b) that it is otherwise desirable that it should do so.

(4) Where the Court does so, its order has the same effect as if it were an action taken by the person required to comply with the requirement or obligation.

44. General power of the Court in respect of orders

(1) An order made by the Court under this Part in respect of a Foundation may, in particular, provide for the appointment or removal of a person appointed under its By-laws.

(2) Any order made by the Court under this Part may be made on such terms, and may impose such conditions, as the Court thinks fit.

45. Power to set aside a transfer or disposition of property due to mistake

(1) In this section:

1. (a) ‘person exercising a power’ means a person who exercises a power to transfer or make other disposition of property to a Foundation on behalf of a Founder and a person who exercises a power over a Foundation or property of a Foundation; and
2. (b) ‘mistake’ includes (but is not limited to):
3. (i) a mistake as to:

(A) the effect of;

(B) any consequences of; or

(C) any of the advantages to be gained by, a transfer or other disposition of property to a Foundation, or the exercise of a power over or in relation to a Foundation or property of a Foundation;

(ii) a mistake as to a fact existing either before or at the time of, a transfer or other disposition of property to a Foundation, or the exercise of a power over or in relation to a Foundation or property of a Foundation; or

(iii) a mistake of law including a law of a foreign jurisdiction; and

1. (c) references to a transfer or other disposition of property to a Foundation do not include a testamentary disposition.

(2) The Court may on the application of any person specified in subsection 47(1), and in the circumstances set out in subsection (3), declare that a transfer or other disposition of property to a Foundation:

1. (a) by a Founder or Contributor acting in person (whether alone or with any other Founder or Contributor); or
2. (b) through or by reason of a person exercising a power or the exercise of a power by a person over the Foundation or property of a Foundation is voidable and:
3. (i) has such effect as the Court may determine; or

(ii) is of no effect from the time of its exercise.

(3) The circumstances are where a Founder, Contributor or person exercising a power:

1. (a) made a mistake in relation to the transfer or other disposition of property to a Foundation; and
2. (b) would not have made that transfer or other disposition but for that mistake; and the mistake is of so serious a character as to render it just for the Court to make a declaration under this section.

46. Power to set aside a transfer or disposition of property exercised by fiduciary power

(1) In this section, ‘person exercising a power’ means a person who exercises a power to transfer or make other disposition of property to a Foundation on behalf of a Founder and who owes a fiduciary duty to such Founder in relation to the exercise of his or her power.

(2) The Court may on the application of any person specified in subsection (1), and in the circumstances set out in subsection (3), declare that a transfer or other disposition of property to a Foundation by a Founder or Contributor (whether alone or with any other Founder or Contributor) through a person exercising a power, is voidable and:

• (a) has such effect as the Court may determine; or
• (b) is of no effect from the time of its exercise.

(3) The circumstances referred to in subsection (2) are where, in relation to the exercise of his or her power, the person exercising a power:

• (a) failed to take into account any relevant considerations or took into account irrelevant considerations; and
• (b) would not have exercised the power, or would not have exercised the power in the way it was so exercised, but for the failure to take into account relevant considerations or the taking into account of irrelevant considerations.

(4) This section applies whether or not the circumstances set out in subsection (3) occurred as a result of any lack of care or other fault on the part of the person exercising a power, or on the part of any person giving advice in relation to the exercise of the power.

47. Applications and orders under sections 45 and 46

(1) An application under subsections 45(2) (Power to set aside a transfer or disposition of property due to a mistake) or 46(2) (Power to set aside a transfer or disposition of property exercised by fiduciary power) may be made by any Founder or Contributor or any of his or her personal representatives or successors in title, the Foundation or any person to whom property of a Foundation has been appointed.

(2) The Court may, consequential upon a declaration made under either of sections 45 (Power to set aside a transfer or disposition of property due to a mistake) and 46 (Power to set aside a transfer or disposition of property exercised by fiduciary power), make such order as it thinks fit.

(3) Nothing in sections 45 (Power to set aside a transfer or disposition of property due to a mistake) or 46 (Power to set aside a transfer or disposition of property exercised by fiduciary power) shall prejudice:

1. (a) any application for a declaration that a transfer or other disposition of property to a Foundation, or the exercise of any power over or in relation to a Foundation or property of a Foundation, is void or voidable on grounds other than those specified in those sections; or
2. (b) any personal remedy which may be available against any person.

48. Provisions for facilitating Foundation division or amalgamation

(1) This section applies where the members of the Council of one or more Foundations unanimously resolve that the property of a Foundation should be divided amongst two (2) or more Foundations, or that two (2) or more Foundations should be combined into a single Foundation.

(2) An application may be made to the Court under subsection (1) for the division of the Foundation, or the amalgamation of the Foundations, on notice to all persons with sufficient interest in any Foundation affected by the making of such an order.

(3) On any application under subsection (1), the Court may make such orders as it considers appropriate to facilitate the division or amalgamation.

(4) Each of the Foundations affected by any order of the Court shall give details of the change of status of the Foundations to the Registrar in such manner as he may require.

(5) The Registrar shall make such entries in the Register as are required to give effect to the order of the Court and ensure any new or amalgamated Foundation is correctly registered.

49. Arbitration of Foundation disputes

(1) Where the Charter or By-laws of a Foundation provide that any dispute or Administrative Question arising between any of the parties in relation to the Foundation shall be submitted to arbitration, that provision shall, for all purposes under the AIFC Arbitration Regulations have effect as between those parties as if were an arbitration agreement and as if those parties were parties to that agreement.

(2) Where the Charter or By-laws of a Foundation do not provide that any dispute or Administration Question arising in relation to the Foundation shall be submitted to arbitration but the parties to that dispute agree in writing to have it resolved by arbitration, that agreement shall, for all purposes under the AIFC Arbitration Regulations, have effect as between those parties as if it were an arbitration agreement.

(3) The AIFC Arbitration Regulations shall apply to an arbitration under these Regulations in accordance with the provisions of Schedule 2 (Application of the AIFC Arbitration Regulations).

(4) The Court may make such orders in relation to an arbitration or possible arbitration which supplement or vary the application of Schedule 2 (Application of the AIFC Arbitration Regulations) as the Court deems appropriate in the circumstances.

50. Powers of the arbitral tribunal

(1) This section shall apply except to the extent otherwise provided in the Charter or By-laws of a Foundation.

(2) The arbitral tribunal may, in addition to all other powers of the tribunal, at any stage in an arbitration under these Regulations, exercise all the powers of the Court (whether arising by law, including these Regulations, under the inherent jurisdiction of the Court or otherwise) in relation to the administration of a Foundation or the rights of any party in relation to the Foundation.

(3) The arbitral tribunal has the same powers to appoint a person to represent the interests of any person (including a minor, a person unborn or unascertained) or class of person in an arbitration concerning a Foundation as the Court has in relation to proceedings before the Court.

51. Provision of information by a Foundation

A Person with Sufficient Interest in a Foundation may make written requests to the Foundation for full and accurate information in respect of any of the following:

1. (a) the financial statements of the Foundation;
2. (b) the property of the Foundation;
3. (c) the manner in which the Foundation’s property are being administered;
4. (d) the way in which the Foundation is carrying out its objects; and
5. (e) the administration of the Foundation, and the Foundation shall comply as soon as practicable after receipt of such requests provided that any such requests shall be subject to subsection (2).

(2) Subject to subsection (4), a Foundation is not required to provide any person with information about the Foundation where the provision of that information is prohibited under the Foundation’s Charter or By-laws, unless the obligation to make such disclosure is imposed by an order of the Court.

(3) If subsection (2) applies, the person making the request may apply to the Court under section 39 (Power of the Court to order compliance) for an order authorising or requiring the provision of the requested information, in which case it must be shown to the Court that the provision of the information is necessary or expedient to enable the determination as to whether or not:

1. (a) the Foundation is carrying out its objects;
2. (b) the Council of the Foundation is carrying out its functions;
3. (c) the property of the Foundation is being properly administered; and
4. (d) the Foundation is being properly administered.

(4) Subsection (2) does not affect any other obligation of a Foundation to supply information about the Foundation under these Regulations or the power of the AIFC Authority, the Registrar or the AFSA to obtain information under the Acting Law of the AIFC.