Conyers Dill & Pearman
COMMERCIAL AND TRUST LITIGATION
AND THE COMMERCIAL COURT IN BERMUDA
Alex Potts – April 2009
The judicial systems of various offshore jurisdictions, including Bermuda, have received their
fair share of criticism in the past. In some instances, such as the Thyssen litigation that took
place between 1997 and 2002, Bermuda’s judicial system probably deserved most of the
criticism that was leveled against it at the time1.
That criticism would not be fair today, however. Substantial efforts have been made in
Bermuda to remedy the problems of the past, and to make serious and substantial
improvements to the commercial dispute resolution system in Bermuda.
Such efforts are ongoing, but as a result of a number of developments over the past three
years in particular, Bermuda has a serious claim to be one of the leading offshore jurisdictions
for the resolution of commercial and trust disputes, consistent with its status as a leading
centre for international business, and a jurisdiction celebrating its 400th anniversary.
The Commercial Bar
There has been a substantial increase in commercial litigation and arbitration in Bermuda.
Lawyers in Bermuda have therefore gained considerable experience in the areas of banking
and financial services, funds, insurance and reinsurance, company and shareholder disputes,
trusts disputes, disputes relating to the sale and supply of goods and services, professional
negligence claims, and contentious insolvencies and liquidations.
There is an active and experienced commercial Bar in Bermuda, many of whom have
experience of working in other jurisdictions, such as England and Wales, Canada, Australia,
the Cayman Islands, and the British Virgin Islands.
Conyers Dill & Pearman has a large litigation and advocacy department, with litigation
lawyers in three principal jurisdictions, being Bermuda, the Cayman Islands and the British
Virgin Islands.
Appleby also has a large litigation team and there are also a number of smaller Bermudian
law firms with well-respected commercial litigation departments.
In complex commercial disputes (which involve, for example, questions of law or practice of
considerable difficulty or public importance), it is still possible to instruct English QCs to
appear before the Bermudian courts, subject to an application for special admission to
practice at the Bermuda Bar. It is also possible to instruct English barristers to advise on
matters and to draft pleadings and other Court documents, where appropriate.
The Commercial Court
The Commercial Court was established in Bermuda in January 2006, and it is a specialist
division of the Supreme Court. The Commercial Court is made up of three Commercial
Judges, who specialize in commercial disputes and business litigation. Currently, the three
Commercial Judges are the Chief Justice, Richard Ground and two puisne Judges of the
Supreme Court, Mr. Justice Geoffrey Bell, and Mr. Justice Ian Kawaley.
1
Although it is fair to say that similar problems have been encountered in other jurisdictions in recent years, including
England and Wales, as the Equitable Life litigation and the BCCI litigation demonstrate.
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The Commercial Court has jurisdiction to deal with any claim or counterclaim arising out of
the transaction of trade and commerce, including disputes relating to:
a) a business document or contract;
b) the export or import of goods;
c) the carriage of goods by land, sea, air or pipeline;
d) the exploitation of oil and gas reserves or other natural resources;
e) insurance and reinsurance;
f) banking and financial services;
g) the operation of markets and exchanges;
h) the purchase and sale of commodities;
i) the construction of ships;
j) business agency; and
k) arbitration.
Commercial actions also include any application to the Court made under the Companies Act
1981, including winding up proceedings.
Most trusts disputes would be commenced in, or assigned to, the Commercial Court,
especially where the trust is of substantial value, the issues are of any complexity, or the
dispute involves a corporate or professional trustee, protector, or beneficiary.
The Commercial Court Judges
Chief Justice Richard Ground OBE QC
Chief Justice Richard Ground has been the Chief Justice of Bermuda since March 2004. His
term of office was recently extended, in January 2009, for a further period of three years.
Before that he served as the Chief Justice of the Turks & Caicos Islands from 1998 to 2004,
and as a Judge of the Supreme Court of Bermuda from 1992 to 1998. He began his legal
career in private practice at 1 Brick Court, Middle Temple, where he specialized in media law
from 1976-83. In 1983 he moved to the Cayman Islands as Senior Crown Counsel, and was
Attorney General of Cayman from 1987 to 1992. He has considerable experience, therefore,
of the laws of England and Wales; the Cayman Islands; the Turks & Caicos Islands; and
Bermuda.
Chief Justice Ground was born on 17 December 1949, in Stamford, England, and educated at
Oakham School; Lincoln College, Oxford; and the Inns of Court School of Law. He won an
open scholarship to Oxford in 1967; and the Violet Vaughan-Morgan University prize for
literature in 1968. He graduated with a BA Hons in English Language and Literature in 1970.
He was called to the Bar, in Gray’s Inn, in 1975; was appointed Queens Counsel (Cayman
Islands) in 1987; and was awarded the OBE in the New Year’s Honours List 1991 for his
services as Attorney General in Cayman.
His professional publications include Halsbury's Laws, 4th ed., Vol. 22, “Hire Purchase and
Consumer Credit” with Brian Neill QC; Halsbury's Laws, 4th ed., Vol. 36, “Pledges and
Pawns”; and he was the precedents editor for the 1981 edition of Gatley on Libel and Slander
(Common Law Library No. 8), Sweet & Maxwell, London 1981.
Mr. Justice Geoffrey Bell
Mr. Justice Geoffrey Bell was born in Liverpool, England, in January 1945, and attended
Liverpool College and Liverpool University, graduating with an honours degree in law in 1965.
He was admitted to practise as a solicitor in England in 1968, and practised in Liverpool
before coming to Bermuda in 1971. After working for the firm of Smith Barnard and Diel,
Justice Bell joined the firm of Appleby Spurling & Kempe in 1974. He became a partner of the
firm in 1976, and was head of the Litigation Department until he retired as a partner in 1994.
He was also managing partner from 1987 until 1991. From 1994 until 2004, Justice Bell
continued practice as Senior Counsel in the Litigation Department. Justice Bell was President
of the Bermuda Bar Association from 1981 until 1984. He was appointed Queen’s Counsel for
Bermuda in 1992, and was a director of Butterfield Bank from 1989 until his appointment to
the bench in January 2005.
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Mr. Justice Ian Kawaley
Mr. Justice Ian Kawaley was born in Bermuda. He was called to the Bar of England & Wales
in 1978, and the Bermuda Bar in 1980. After attending Oundle School in England, he
obtained an LL.B (Hons.) Degree from Liverpool University (1977), an LL.M Degree from the
London School of Economics & Political Science (1979), and a Ph. D in Law from London
University (External) (1999).
Prior to his appointment to the Bench in 2003, he served as Litigation Counsel to the
Bermudian law firms Milligan-Whyte & Smith, and Juris Law Chambers. In that capacity, he
appeared before the Supreme Court and Court of Appeal, specializing in insolvency cases
with an international dimension. His earlier career was spent as a government lawyer (in
Bermuda and Seychelles), and as a legal aid practitioner with Browne & Wade Chambers
(Bermuda) and in the Chambers of Sibghat Kadri Q.C. (11 Kings Bench Walk, Temple,
London).
Justice Kawaley is the co-editor (with Gabriel Moss Q.C., Howard Seife and Nigel
Montgomery) of ‘Cross-Frontier Insolvency of Insurance Companies’ (Sweet & Maxwell:
London, 2001). He is a regular presenter at international insolvency conferences, and is the
author of numerous articles on commercial, constitutional and public international law2.
Recent decisions of the Commercial Court
There have been a number of important decisions of the Commercial Court in the past three
years, which illustrate the experience of the jurisdiction’s commercial judges and lawyers in
the resolution of commercial and trust disputes3. It is important to bear in mind, of course,
that the reported judgments represent just a small percentage of the commercial and trust
disputes that have been commenced in the Commercial Court4, and that may have been
resolved prior to judgment, either by way of settlement, through negotiation or mediation, or
with the assistance of active case management by the judiciary and the parties. There are
also a large number of confidential arbitrations that go unreported.
2
His other publications include ‘The Fair Cross-section Principle: Trial by Special Jury and the Right to a Fair
Criminal Trial under the Bermuda Constitution’ (1989) 38 International and Comparative Law Quarterly 522; 'The
Implications of the Exclusive Economic Zone and EEZ Management for Bermuda, a Small Mid-ocean Island
Commonwealth Territory' (1995) 26 Ocean Development & International Law 227-254; ‘The Rule of Law, Judicial
Independence and Bermuda’s Early Constitutional History’ (2006) Bermuda Journal of Archaeology & Maritime
Science 50-66; and ‘Judicial Cooperation in Cross-Border Insolvency Cases: Recent Developments’ (2007) 20
Insolvency Intelligence 213 (October 2007).
3
The reported cases include ABC Insurance Company v XYZ Insurance Company [2006] Bda LR 8; Sino-JP Fund
Co Ltd v Pacific Electric Wire and Cable Co Ltd [2006] Bda LR 51; Re Refco Capital Markets Limited [2006] Bda LR
94; Discover Reinsurance Company v PEG Reinsurance Company Ltd [2006] Bda LR 88 and [2007] Bda LR 20;
Benjamin v KPMG Bermuda and KPMG Barbados [2007] Bda LR 22; Re Loral Space and Communications Ltd
[2007] Bda LR 26; Phoenix Global and Phoenix Capital v Citigroup & The Bank of Bermuda [2007] Bda LR 61; First
Atlantic Commerce Ltd v The Bank of Bermuda [2007] Bda LR 36 and [2007] Bda LR 70; Re IPOC International
Growth Fund [2007] Bda LR 74; Wingate v Butterfield Trust (Bermuda) Limited [2007] Bda LR 76; Fidelity Advisors
Series VIII v APP China Group Ltd [2007] Bda LR 35; Ting v Borelli (as liquidator of Akai Holdings Ltd) [2007] Bda LR
73; Re Electric Mutual Liability Insurance Co Ltd (EMLICO) [2007] Bda LR 5; Starr Excess Liability Insurance Co v
General Reinsurance Corporation [2007] Bda LR 34; ACE Bermuda v Continental Casualty Co [2007] Bda LR 8 and
[2007] Bda LR 38; Lenihan v LSF Consolidated Golf Holdings Ltd [2007] Bda LR 49; Robinson v Somers Isles
Shipping Ltd [2008] Bda LR 5; Walsh & Taal v Horizon Bank International [2008] Bda LR 16; Montpelier Reinsurance
Ltd v Manufacturers Property & Casualty Limited [2008] Bda LR 24; Re Dickson Group Holding Limited [2008] Bda
LR 34; Re Capricorn Trust [2008] Bda LR 41; Lisa SA v Leamington Reinsurance Company & Avicola [2008] Bda LR
51; In the matter of Stewardship Credit Arbitrage Fund 2008 Commercial Court No. 266; Re Harrington International
Insurance Limited 2008 Civil Jurisdiction No. 251; Tenaga Bumi-Bali v Bali Energy Limited 2005 Civil Jurisdiction No.
288; Masri v Consolidated Contractors International Ltd 2008 Civil Jurisdiction No. 142.
4
It is thought that 52 cases were conducted in the Commercial Court in 2006, and 64 in 2007. Figures are not yet
available for 2008 and 2009. See ‘Managing International Commercial Litigation in an Increasingly Globalised World’,
by Mr. Justice Kawaley.
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The Court of Appeal for Bermuda
The Court of Appeal sits about four times a year, with each sitting lasting about four weeks.
Each sitting is generally full of judicial business, made up of both of commercial, civil and
criminal appeals. The permanent Judges of the Court of Appeal currently include:
(a) The Rt. Hon. Edward Zacca OJ, President of the Court of Appeal;
(b) The Hon. Gerald Paul Nazareth CBE;
(c) The Rt. Hon. Sir Anthony Evans;
(d) The Hon. Sir Austin Ward; and
(e) The Rt. Hon. Sir Murray Stuart-Smith
A number of these judges have experience of adjudicating in complex commercial disputes,
both in Bermuda and in other jurisdictions, such as England and Wales, Hong Kong, Dubai,
and the Cayman Islands, and, for any complex commercial appeal, the panel will normally be
assembled with the commercial appellate judges in mind.
The Privy Council
The Privy Council in London is the final court of appeal for Bermuda. The judges of the
Judicial Committee of the Privy Council need no introduction, since they are, for the most
part, members of the UK’s House of Lords (soon to be Supreme Court), most of whom have
significant experience in the resolution of commercial and trust disputes.
Judicial case management and procedure in the Commercial Court
Although the Supreme Court of Bermuda has not adopted the English Civil Procedure Rules
or the ‘Woolf reforms’ in full, the Supreme Court, and the Commercial Court in particular, have
modernized their practices and procedures in a number of important respects in the past few
years, in an endeavour to ensure that commercial and trust disputes are handled in a costeffective and timely manner, by appropriately qualified judges and lawyers.
In addition to the creation of the Commercial Court, new rules were introduced in 2006 that
explicitly introduced the concept of the ‘overriding objective’, which includes the objectives of:
a) dealing with cases justly;
b) ensuring that the parties are on an equal footing;
c) saving expense;
d) dealing with cases in ways which are proportionate;
e) ensuring that cases are dealt with expeditiously and fairly; and
f) allotting appropriate share of the court’s resources to each case.
Rules were also introduced in 2006 to create a system of active case management by the
judiciary, which were supplemented by certain commercial court rules and practice directions
designed to streamline commercial litigation, and which continue to be refined or improved as
appropriate. Amongst other improvements, judges are now required to deliver judgments
within six weeks of a hearing, and the costs regime has been brought more into line with the
current costs regime in England and Wales.
The Commercial Court judges have embraced these new procedures enthusiastically, and
are developing a reputation for sensible, but flexible, case management, and a willingness to
hear urgent matters (such as injunction applications) at extremely short notice, whenever
appropriate.
Infrastructure and resources of the Commercial Court
In recognition of the fact that the physical and electronic resources of the Commercial Court
and Registry warrant further improvement, the Government of Bermuda has indicated that a
designated Commercial Court space will be opened for business in late 2009 or early 2010. It
is anticipated that this space will be located in the Government Administration Building, and
that it will have the facilities and resources to be expected of a commercial court in a leading
centre for international business. There are also strong signs that a designated arbitration
centre will also be opened in due course.
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For those that may be interested, there are a number of websites that contain further
information about Bermuda’s judiciary, Bermuda’s case law, and Bermuda’s legislation,
including:
a) Bermuda’s Judiciary: www.gov.bm;
b) Bermuda Laws Online: www.bermudalaws.bm;
c) Bermuda Law Reports: www.bdalawreports.net.
Further information can also be found on Conyers Dill & Pearman’s website:
www.conyersdillandpearman.com.
Conclusion
By way of conclusion, Bermuda has, in a relatively short period of time since the
establishment of a designated Commercial Court in 2006, positioned itself as a leading
offshore jurisdiction for the resolution of commercial and trusts disputes. There are a number
of reasons for believing that it will only improve its reputation in the future.
This article is not intended to be a substitute for legal advice or a legal opinion. It deals in broad terms only and is
intended to merely provide a brief overview and give general information.
Notes to Editors
Conyers Dill & Pearman has pioneered the field of offshore law since its establishment in 1928. It is the first law firm
to have established an office outside of its home jurisdiction, setting up shop in Guernsey in 1982 as a base for
servicing European clients (superceded by the London office in 1998). It is also the first to have expanded into Asia,
with the opening of its Hong Kong office in 1988, and the first to establish a presence in Singapore in 2001. It is also
the first to have an office in Russia with the launch of its Moscow office in 2008. Conyers has continued in this vein in
2009, becoming the first offshore firm to have a Brazil office, with the formation of its São Paulo partnership in March.
With a current complement in excess of 550 staff, with over 150 lawyers, Conyers Dill & Pearman advises on the
laws of Anguilla, Bermuda, British Virgin Islands, Cayman Islands and Mauritius from those islands and from Dubai,
Hong Kong, London, Moscow, and Singapore. The firm has earned clients’ trust, loyalty and respect by consistently
providing responsive, timely and thorough advice on all aspects of offshore corporate, company and commercial law,
commercial litigation and private client matters.
Affiliated companies (Codan) provide registered agent, registered office, corporate director and secretarial services,
as well as specialised company management services. An affiliated global network of licensed trust companies
undertakes a broad range of trust establishment and administration services. These services range from the
administration of family trusts for private clients to the structuring of highly complex and innovative corporate ventures
including special purpose trusts for ownership of securitization structures.
For further information please contact:
Naomi J. Little
Tel:
+1 441 298 7828
Fax: +1 441 299 4987
e-mail: naomi.little@conyersdillandpearman.com
web: www.conyersdillandpearman.com
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