The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian trust company’s bid to revive the strike out of a former client’s negligence and breach of contract lawsuit has been allowed to proceed by the Supreme Court because of its “wider public importance” to this nation’s international tax information exchange regime and obligations.

Justice Camille Darville-Gomez, in a June 1, 2026, ruling rejected the arguments by Isaac Daniel Picciotto Kassin, a wealthy Colombian businessman, and allowed the appeal by JP Morgan Trust Company (Bahamas) to move ahead while also ‘staying’, or halting, her previous verdict that dismissed the financial institution’s attempt to strike out his lawsuit.

In particular, she found that JP Morgan’s appeal raises issues critical to The Bahamas’ wider financial services industry and, in particular, whether the Automatic Exchange of Financial Account Information Act 2016 offers legal immunity for a local financial institution, and its employees and agents, making lawful “bona fide” disclosures of client information under the Common Reporting Standard (CRS) that governs non-US global tax information sharing standards.

Mr Kassin initiated Supreme Court legal action after incurring a $2.5m tax penalty when JP Morgan mistakenly provided information not required by Bahamian law to the Colombian tax authorities. The institution also valued his investments at three times’ their previously-disclosed worth.

The Colombian, who is involved in the wine business in both his homeland and Chile, had declared the assets held by his Bahamas-domiciled trust, the Cabo Verde Trust, as being worth $6.183m in both the 2016 and 2017 tax returns he submitted to his home country tax authorities. The valuation was based on the “historical cost” of acquiring the underlying operating companies held by the trust.

However, JP Morgan, as trustee, failed to properly update its records to show the trust was an entity that did not have to be reported or disclosed to the Colombian tax agency, DIAN, under the provisions of The Bahamas’ Automatic Exchange of Financial Account Information Act 2016.

And, in addition to inadvertently disclosing its clients assets, JP Morgan’s Bahamas affiliate compounded this error by valuing the trust’s assets at “market value” rather than the “historical cost” method employed by Mr Kassin.

As a result, it declared that the trust’s assets were worth $22.732m and $20.813m for the 2017 and 2018 tax years, respectively - providing valuations that were three times’ higher than those submitted to the Colombian tax authorities by Mr Kassin.

This “discrepancy” resulted in the latter having to pay a combined $2.516m in penalties and an “additional wealth tax”, and Mr Kassin sought to recover this sum from the Bahamian trust company on the basis that it had incorrectly disclosed his assets and over-valued them.

Mr Kassin, in seeking to resist JP Morgan’s appeal of Justice Darville-Gomez’s previous verdict, argued that it was an attempt to re-litigate her earlier December 18, 2025, ruling and none of the 15 grounds cited had “a realistic prospect of success”. He also alleged that the financial institution had not shown it was at “real risk of injustice”.

However, central to JP Morgan’s appeal is section 14 (5) Automatic Exchange of Financial Account Information Act 2016, and whether the legal immunity and protection it offers both the Ministry of Finance and Bahamian financial institutions overrides - and offers a complete defence to - Mr Kassin’s claim.

The relevant section states that “no action, suit, prosecution or other proceedings shall be brought or instituted against the Competent Authority or a Bahamas financial institution, its employees, agents or assigns, in respect of any lawful disclosure done bona fide in pursuance, execution or intended execution of the Act".

Setting out both sides’ positions, Justice Darville-Gomez wrote: “The defendant [JP Morgan] submitted that this is not merely an ordinary defence to liability, but a statutory immunity from proceedings being brought at all. It says that, if the immunity applied, the litigation burden itself is the mischief Parliament intended to avoid.

“The claimant [Mr Kassin], however, submitted that the immunity cannot be determined without trial because the case concerned the defendant's alleged gross negligence and breach of trustee duties in failing to maintain accurate records and failing to correct the trust's Common Reporting Standard classification, and not merely the act of disclosure.”

Finding that JP Morgan had raised an “arguable point”, the judge added: “The intended appeal raises a real question as to the scope and timing of section 14(5) - whether, on assumed facts, the statutory bar can or should be determined at an interlocutory stage, or whether the factual and fiduciary context requires trial before the statutory protection can be applied…..

“This issue also has a dimension beyond the immediate parties. The statutory reporting regime under the Automatic Exchange of Financial Account Information Act 2016 applies to financial institutions operating within The Bahamas and to the Competent Authority (Ministry of Finance). The proper construction of section 14(5), and the circumstances in which it may be invoked at a preliminary stage, are matters of continuing practical importance to the operation of that regime.

“I am satisfied that the proposed appeal raises issues of wider public importance concerning the operation of statutory immunity under the Automatic Exchange of Financial Account Information Act and the relationship between domestic trust duties, Common Reporting Standard reporting obligations and claims arising from foreign tax consequences.”

Mr Kassin, in an August 27, 2020, e-mail told JP Morgan Trust Company (Bahamas) that it was in breach of the revocable trust agreement and responsible for the penalties he had incurred due to it “mistakenly reporting the trust's financial information to the Competent Authority without having any legal obligation to do so and against his alleged express instructions not to do so”.

He called on it to compensate him for the tax penalty, but JP Morgan’s Bahamas subsidiary argued in an October 12, 2020, e-mailed reply that there was no breach of the trust agreement and any talk of reimbursement was “premature”. It later informed the Ministry of Finance on September 2, 2021, that the trust’s information was submitted erroneously due to "an inadvertent, isolated administrative mistake".

JP Morgan’s consistent position has been that it is protected by both the Automatic Exchange of Financial Account Information Act and the Cabo Verde Trust’s governing instruments, and that the claim should be struck out.