An Introduction To Dispute Resolution

• Law Firm: Appleby
• Subject Matter: Litigation, Mediation & Arbitration, Insolvency/Bankruptcy/Re-structuring, Technology, Financial Restructuring, Arbitration & Dispute Resolution, Fin Tech
• Author: Mr John Wasty, Khiyara Krige and James Batten
• Published date: 22 February 2023

This edition discusses Current Economic Conditions.

CURRENT ECONOMIC CONDITIONS

Bermuda is an international business hub and corporate domicile with considerable economic activity in the insurance, reinsurance and financial services sectors. Bermuda's economy is therefore linked to the global economy. Businesses across the world are reckoning with the impact of the COVID-19 pandemic, and Bermuda, as a key location within many such entities' corporate structures, has been active in responding to the challenges that arise. The Bermuda courts in particular have been engaged on a number of matters that involve reactions to post-pandemic conditions.

Bermuda is a British Overseas Territory with a legal system rooted in the common law of England and Wales. Notwithstanding its historic ties, Bermuda has developed a sophisticated body of precedent within the jurisdiction that is more closely tied to Bermuda's particular characteristics.

Dispute Resolution activity is closely tied to Bermuda's key sectors. 2022 saw a number of notable cases in these areas. There have been significant developments this year in the law relating to the segregation of accounts, a corporate structure used by Bermuda insurance and reinsurance companies to segregate accounts holding assets from one another and from the insurer's general account. Litigation in 2022 saw the practical operation of these accounts scrutinised in light of the language.

In Bermuda, shareholders of merging or amalgamating companies have a right to seek an appraisal of the value of their shares from the court, in the event that they do not vote in favour of the merger or amalgamation because they do not consider they have been offered fair value by the company for their shares, which are being compulsorily acquired. The claim in such appraisal proceedings is for the difference in value between the amount assessed by the company as fair value at the time that it invites the shareholders to vote on the proposed merger or amalgamation and the amount assessed by the court as fair value. These cases engage significant issues relating to discovery and the formulation of expert evidence.

Bermuda is at the cutting edge of digital asset regulation with a liberal regulatory regime focused on the protection of client assets through segregation of assets, appropriate asset segregation and monitoring, and insurance of risks. We expect to see in future an increase in litigation relating to digital assets and Bermuda lawyers...