Sep 2023

Bermuda

Law Over Borders Comparative Guide:

Commercial Litigation and Cross-border Enforcement

Sections

Scroll down to read the full chapter or click on the headings below to jump to the relevant section.

Top

1 . What is the structure and organisation of local courts dealing with commercial claims? What are the main procedural rules governing commercial litigation?

In Bermuda the Commercial Court is one of five divisions which sits within the Supreme Court and is headed by the Chief Justice. The Chief Justice has the power to nominate other commercial judges.

Commercial litigation procedure in Bermuda is governed by the Rules of the Supreme Court 1985 (the 1985 Rules)[1] and the Supreme Court Act 1905.[2] The 1985 Rules are similar to the civil procedure rules that applied in England and Wales in 1999 and thus the corresponding “White Book” remains the main guide to the 1985 Rules. 


[1] Rules of the Supreme Court 1985 (www.bermudalaws.bm).

[2] Supreme Court Act 1905 (www.bermudalaws.bm).

Top

2 . What pre-action considerations apply?

The parties must have regard to the Overriding Objective (Order 1A/1 of the 1985 Rules) to assist the courts in:

  • ensuring that the parties are on an equal footing;
  • saving expense; and
  • dealing with the case in ways which are proportionate. 

Pre-action correspondence, such as a letter before action, is not strictly necessary under the 1985 Rules however it is encouraged and widely used. 

Top

3 . What are the main alternative dispute resolution (ADR) methods used to settle large commercial disputes?

The main ADR methods in Bermuda are arbitration and mediation. The parties must have agreed to the use of arbitration and in disputes before the Supreme Court the parties can be encouraged (but not compelled) to mediate. 

Top

4 . How long, on average, do court proceedings take to reach trial?

This can vary depending on the complexity of the dispute and the number of interim applications in any given commercial claim. The time frame from issuance of the writ to the final determination is typically between one and two years. 

Top

5 . What disclosure obligations apply? Are parties required to disclose unhelpful documents as well as those on which they rely?

Disclosure obligations in Bermuda are governed by Order 24 of the 1985 Rules. Parties are required to disclose documents in their possession, custody or power which are relevant to the matters in question in the action. As a result, parties must disclose unhelpful documents as well as those on which they intend to rely. The parties can agree to dispense with or limit the discovery of the documents in the claim.

Under Order 24/7 of the 1985 Rules the court can order that a party files an affidavit stating whether any document, or class of document, described in an application has at any time been in their possession, custody, or power. If the party no longer has possession of the document the affidavit should detail the date they parted with it and what has become of it.

Parties also have the right to inspect the documents disclosed or any document which a party refers to in their pleadings or affidavits.

Top

6 . Can witnesses be required to attend trial and face cross-examination?

The procedure for witness evidence under the 1985 Rules varies depending on how the action has been commenced.

In an action begun by writ (i.e., an action likely to be a dispute of facts), any fact required to be proven at the trial shall be proved by the examination of witnesses orally and in open court but the 1985 Rules do provide for the service of witness statements by those witnesses which then stand as their examination in chief. However, if the court thinks it is appropriate, they can order that certain affidavit evidence be read aloud at trial and that those witnesses need not attend for the purpose of cross-examination.

If the action is begun by originating summons, originating motion, petition, or on any interim application made by summons, the witness evidence is generally given by affidavit only. However, parties can make an application to the court that the witness should attend the hearing for cross-examination purposes. If the witness does not attend, their affidavit cannot be used as evidence without leave from the court.

Top

7 . What discretion do the courts have in making costs orders?

The court has full discretion as to the making of costs orders in Bermuda. There are a range of costs orders available but an unsuccessful party at trial can expect an adverse costs order made against them. 

However, the court can make different costs orders at interlocutory stages throughout the proceedings. A ‘costs in any event’ order means that the party in whose favour it is made shall be entitled to their costs in respect of that application whatever the outcome of the final determination of the matter at trial. ‘Costs in the cause’ or ‘costs in the application’ means that the party in whose favour an order for costs is made at the conclusion of the final cause or matter in which the proceedings arise, shall be entitled to their costs of the application.

Taxation and assessment of costs is commonly done at the end of the final determination of the matter. If the parties cannot agree the amount of costs to be paid pursuant to the costs order the Registrar of the Supreme Court assesses the claim for costs following receipt of a bill of costs produced by the receiving party. The court can order that costs are paid on the standard, or the indemnity basis. 

When considering a costs award the court will take into account settlement offers made by the parties on an open basis or on a “without prejudice save as to costs” basis. The effect of an offer to settle the matter without the need to proceed to trial can put the offeror in an advantageous position during the awarding of costs assessment, if the receiving party recovers no more than the amount offered to them.

Top

8 . What are the main types of interim remedies available?

The main interim remedies available in Bermuda are as follows.

Summary judgment 

Summary judgment is an available remedy to plaintiffs where, following the filing of the writ, they can establish that:

  1. the defendant has no defence to the claim, or part of the claim; or
  2. the defendant has no defence to the claim or part of the claim except as to the amount of any damages claimed. 

The summary judgment application is made by way of summons with supporting affidavit. 

Striking out 

Claimants and defendants can apply for proceedings to be struck out, or to compel a party to amend their pleading if it is found that a party’s case:

  1. discloses no reasonable cause of action or defence; or
  2. is scandalous or vexatious; or
  3. can prejudice or delay a fair trial; or
  4. is otherwise an abuse of the process of the court. 

The strike out application is made by way of summons and supporting affidavit save for (a) above where no evidence is permissible.

Security for costs

Defendants can obtain security for costs incurred in defending a claim in Bermuda. The security is normally obtained when: 

  1. the plaintiff is ordinarily resident out of the jurisdiction; or 
  2. the plaintiff is a nominal claimant (not being a plaintiff who is suing in a representative capacity) who has brought the action for the benefit of some other person and the nominal claimant may be unable to satisfy an order for costs made against them. 

An application for security for costs is made by summons supported by an affidavit which must state the facts above which they rely on.

Top

9 . What approach do the local courts adopt with respect to arbitration? What arbitration law applies and is it based on the UNCITRAL Model Law?

Bermuda has two Acts which govern arbitrations, the Arbitration Act 1986 (the 1986 Act)[3] which governs domestic arbitrations, and the Bermuda International Conciliation and Arbitration Act 1993 (the 1993 Act)[4] which governs international arbitrations. The 1993 Act has adopted the UNCITRAL Model Law and Rules. 

The Bermuda commercial courts are pro-party autonomy, if the parties have agreed on arbitral proceedings the court would be keen to ensure that parties comply with an arbitration clause. In order to enforce the arbitration clause, the court will grant an anti-suit injunction against a person who has commenced proceedings in breach of the clause. Under section 7 and 8 of the 1986 Act and Article 8 of the Model Law under the 1993 Act, if proceedings have been commenced in breach of an arbitration agreement, upon application from a party, the court has the power to stay court proceedings for the parties to conduct an arbitration providing that the arbitration agreement is not null and void. 

Upon an application from a party to an arbitration agreement, the court will assist parties in procedural matters. Under the 1986 Act, upon application of a party the court has the power to appoint and remove an arbitrator in certain circumstances, determine a preliminary point of law, and grant interim relief. Under the 1993 Act, upon application of a party the court has the power to appoint and remove an arbitrator, assist parties in determining the procedure of the arbitration, rule on questions regarding an arbitral tribunal’s jurisdiction, deal with matters beyond the scope of the arbitration clause, and grant interim relief. 


[3] Arbitration Act 1986 (www.bermudalaws.bm).

[4] Bermuda International Conciliation and Arbitration Act 1993 (www.bermudalaws.bm).

Top

10 . Can arbitrators grant interim relief?

Under section 22 of the 1986 Act and section 36 of the 1993 Act, every arbitration agreement shall be deemed to contain a provision that the arbitrator/arbitral tribunal may, if they think fit, make an interim award.

Upon an application, under section 20 of the 1986 Act, and section 35(5) of the 1993 Act the following can be granted:

  • the preservation, interim custody or sale of goods which are the subject matter of the arbitration;
  • securing the amount in dispute in the arbitration;
  • the detention, preservation or inspection of any property or thing which is the subject of the arbitration or as to which any question may arise therein, and authorizing for any of the purposes aforesaid any person to enter upon or into any land or building in the possession of any party to the arbitration, or authorizing any samples to be taken or any observation to be made or experiment to be tried which may be necessary or expedient for the purpose of obtaining full information or evidence; and 
  • interim injunctions or the appointment of a receiver.
Top

11 . On what grounds can an arbitration award be appealed?

Under section 29(2) of the 1986 Act an appeal shall lie to the Court of Appeal on any question of law arising out of an award made on an arbitration agreement. Further under section 34 of the 1986 Act, upon application from a party to an arbitration the court may set aside an award “where an arbitrator or umpire has misconducted himself or the proceedings, or an arbitration or award has been improperly procured”.

Under the 1993 Act, Article 34(2) of the UNCITRAL Model Law, recognition or enforcement of an arbitral award, irrespective of the country in which it was made, may be refused only if:

  • a party to the arbitration agreement was under some incapacity, or the said agreement is not valid under the law to which the parties are subjected to, or, failing any indication thereon, under the law of the country where the award was made; or
  • the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator, or of the arbitral proceedings, or was otherwise unable to present its case; or
  • the award deals with a dispute not contemplated by or falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration; or 
  • the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, was not in accordance with the law of the country where the arbitration took place;
  • the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which, that award was made; or
  • under section 27 of the 1993 Act an award is in conflict with public policy of Bermuda.
Top

12 . What international conventions and agreements on enforcement of judgments or arbitral awards is your jurisdiction a party to?

Bermuda is a party to the Hague Convention on the Service Abroad of Judicial and Extra-Judicial Documents in Civil or Commercial matters. 

In relation to arbitral awards Bermuda is party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), making all awards under the Convention enforceable in Bermuda. 

Top

13 . What types of judgments in commercial matters are enforceable and what types are excluded?

Certain foreign judgments can be enforced by registration pursuant to statute under the Judgments (Reciprocal Enforcements) Act 1958 (the 1958 Act)[5] (which only applies to the superior courts of the UK and certain parts of “His Majesty’s Dominions”). Otherwise, certain foreign judgments can be enforced by fresh action under Bermuda common law.

Money judgments (excluding claims for tax) are the only foreign judgments that are enforceable both under the 1958 Act and at common law, subject to the following conditions: 

  • the judgment where the applicable foreign court had jurisdiction according to Bermuda’s conflict of law rules;
  • the judgment is final and conclusive as between the parties thereto;
  • there is payable a sum of money, not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty; and 
  • the judgment was not obtained by fraud; or
  • enforcement of the judgment would be contrary to public policy. 

[5] Judgments (Reciprocal Enforcement) Act 1958 (www.bermudalaws.bm).

Top

14 . What is the process for registration of foreign judgments and arbitral awards?

In relation to registering foreign judgments, under section 3 of the 1958 Act, a person seeking to enforce a foreign judgment must do so within six years of the date of the judgment. An application for enforcement is commenced by Originating Summons. The application must also have a supporting affidavit including:

  • the judgment, or a verified or certified copy of the judgment thereof;
  • the name, trade, or business and the usual or last known place of abode or business of the applicant and the person against whom it is sought to enforce the award; and 
  • as the case may require, that the award has not been complied with, or the extent to which it has not been complied with at the date of the application. 

Under Bermuda common law, in order to enforce a foreign judgment, fresh proceedings must be issued in the Supreme Court. An application can be brought under Order 14 of the 1985 Rules for summary judgment by summons and supporting affidavit. 

In relation to arbitral awards under Order 73 Rule 10 of the 1985 Rules the party seeking to enforce the award must make an application to the court. The application must:

  • exhibit the arbitration agreement and the original award or, in either case, a copy thereof;
  • state the name and the usual or last known place of abode or business of the applicant and the person against whom it is sought to enforce the award; and 
  • state, as the case may require, that the award has not been complied with or the extent to which it has not been complied with at the date of the application. 
Top

15 . Once the judgment or award is registered, what are the available methods of execution?

Once the judgment or award is registered, the following can be used to enforce:

  • Writ of fieri facias – the method of requiring the Bermuda Provost Marshal to seize and sell the Defendant’s assets or property to recover a sum due under the judgment or award.
  • Garnishee proceedings – an application to the court seeking to order a third party to pay the plaintiff the money that the third party owes the defendant. 
  • Appointment of a receiver – appointing a receiver to take possession of property for its protection or realisation. 
  • Insolvency proceedings – instituting proceedings to have a company wound up or an individual declared bankrupt. 

Charging orders are not available for commercial or civil matters. 

Top

16 . What interim measures are available pending enforcement?

Pending enforcement of a judgment or an award, the party seeking to enforce would have recourse of an injunction or the appointment of a receiver. 

EXPERT ANALYSIS

Chapters

British Virgin Islands

Kate Lan
Nicholas Lee
James Noble

Canada

Robert J.C. Deane
Sean Gallagher

Cayman Islands

Amelia Tan
Joni Khoo
James Noble

China

Jessica Fei

England and Wales

Ben Bruton
Jake White
Suzanne Labi

Germany

Dr. Justus Jansen
Jamsched Amiri

Guernsey

Elaine Gray
Rebekah Johnston
Robin Gist

Hong Kong

Ian De Witt
Natalie Lam

Japan

Claire Chong
Kaori Sugimoto

Jersey

Christopher Tan
John Kelleher

Malaysia

Janice Ooi Huey Peng
Sharon Chong Tze Ying

Norway

Carl E. Roberts
Eline Hellem Langeland

Pakistan

Mansoor Hassan Khan

Saudi Arabia

Fahad AlDehais AlMalki
Salman AlAnazi
Talal AlOtaibi

Singapore

Calvin Ong
Monisha Cheong
Wendy Lin
Josephine Choo

South Korea

Daniel Chua
SeungMin Lee
Youjoun Ha

Taiwan

Angela Y. Lin
Joyce N. Chang

Thailand

Jittipong Champreechar
Napassorn Panitchewakul
Sarocha Thongperm

United Arab Emirates

Ayman Ibrahim
Hassan Al Shaqsi
Nasser Al Osaiba
Sleiman Jorr

United States

Arthur Schoen
Julia Mano Johnson
Natalie Holden

Powered by SimSage

Jobs from Nicholas Scott

2 PQE + Private Equity Associate

Job location: London

Popular Articles

Latest Articles

Gateley affiliate Austen Hays launches class action against Grindr, advised by Cooley

5h

Stewarts’ partner count nears treble figures as firm promotes six

6h

Baker McKenzie hires nine Munger Tolles partners in Los Angeles

8h

UK Supreme Court refuses Marks & Clerk permission to appeal in secret commissions case

9h

Uncertainty follows SEC stay of contested climate disclosure rule

10h