Global Legal Insights - Litigation & Dispute Resolution

Previously published by Global Legal Group Ltd, London

Efficiency/integrity

Bermuda provides a variety of ways for parties to resolve disputes and has a respected, independent and soundly administered judiciary. The principal trial court is the Supreme Court of Bermuda and it is bound by the decisions of the Court of Appeal for Bermuda and Bermuda's highest appellate court, the Judicial Committee of the Privy Council sitting in London, England.

The Rules of the Supreme Court 1985 ("the Rules") are substantially the same as the equivalent rules which were in force in England and Wales in 1999 and they govern the manner in which civil litigation is conducted in the jurisdiction. There is, however, a signifi cant amendment which provides for what is known as the overriding objective (the "Overriding Objective"), and which directs that Bermuda's courts must deal with a case justly, including so far as practicable to:

(a) ensure that the parties are on an equal footing;

(b) save expense; and

(c) deal with the case in ways that are proportionate to the amount of money involved; the importance of the case; the complexity of the issues; and the financial position of each party.

Bermuda also has a commercial division of the Supreme Court and commercial cases are allocated to specialist commercial judges to be dealt with expeditiously and efficiently, in accordance with the Overriding Objective.

There are alternatives to court litigation for dispute resolution and arbitration, in particular, is a popular method of dispute resolution. The Arbitration Act 1986 governs domestic arbitration proceedings and the Bermuda International Conciliation and Arbitration Act 1993 governs international commercial arbitration.

Enforcement of judgments/awards

A foreign judgment for a definite sum of money may become recognised and legally enforceable in Bermuda either by taking steps under the Judgments (Reciprocal Enforcement) Act 1958 ("the Act"), or as a matter of common law, so long as certain conditions are met. Arbitration awards are enforceable through the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and Part IV of the Bermuda International Conciliation and Arbitration Act 1993. There are also rules governing the enforcement of maintenance orders, divorces and legal separations. The Act applies only to judgments of the superior courts of certain countries, states or territories (predominantly the courts of the United Kingdom and certain Commonwealth countries) and which are final and conclusive as between the parties. Judgments for specific performance or for an injunction will not be enforced although they may be relied upon as a defence to a claim or as conclusive of an issue in a claim. Foreign judgments concerning the enforcement of foreign fiscal or penal laws are unenforceable, both under the Act and at common law. Similarly, by virtue of the Protection of Trading Interests Act 1981, judgments which involve an award of damages which has been calculated by taking a multiple of a sum of compensation will not be enforced either under the Act or at common law. Awards of punitive damages may also be unenforceable as being contrary to public policy.

Enforcement at common law is usually achieved through proceedings being issued and the making of an application for summary judgment. A defendant seeking to defend the action will have a considerable burden to discharge and would need to establish that he has a bona fi de defence such as by showing that:

(a) the judgment had been obtained by fraud;

(b) the enforcement of the judgment would be contrary to Bermuda public policy;

(c) the proceedings in which the judgment was obtained were contrary to natural justice. The question is whether, looked at in the round, the judgment was obtained in a way which accords with the English idea of substantial justice; for example, it has been held that it is contrary to natural justice to require a defendant to put up security as a condition of defending an action in a sum which it cannot afford. A foreign default judgment would not be treated differently to any other foreign judgment; however, the court may consider the rules of the foreign court for the granting of judgment in default when determining whether there had been any denial of natural justice; or

(d) the foreign court lacked jurisdiction according to the principles conflicts of law applied in Bermuda. The court will not automatically accept that the foreign court had jurisdiction but there are four cases in which a Bermuda court will recognise in personam jurisdiction at common law:

(i) if the judgment debtor was present in the foreign country, at the time the proceedings were instituted. It would not be necessary to show residence, citizenship, property ownership or domicile in the foreign country on the part of the debtor;

(ii) if the judgment debtor claimed, or counterclaimed, in the proceedings before the foreign court;

(iii) if the judgment debtor submitted to the jurisdiction of the foreign court by voluntarily...