Bermuda’s Commercial Court: The first five years

  • Supreme Court Judge Ian Kawaley

    Supreme Court Judge Ian Kawaley


Five years ago, the Supreme Court of Bermuda set up The Commercial Court. It has enhanced the island’s legal infrastructure and enabled Bermuda to become a leading offshore jurisdiction for the resolution of commercial disputes. The Royal Gazette asked Supreme Court Judge Ian Kawaley, who in April will be sworn in as Bermuda’s next Chief Justice, to discuss the genesis of the Court and what he believes it has achieved.

Introduction

The Commercial Court, a Division of the Supreme Court of Bermuda, was born on January 1, 2006 when the Rules of the Supreme Court Amendment Rules 1985 enacted by Chief Justice Richard Ground came into force. Members of Bermuda’s Commercial Bar had for many years called for a specialist commercial court. Official support for such an innovation came in March 2004 from the Justice Review Committee set up by then Attorney-General Larry Mussenden and chaired by Justice Norma Wade-Miller. However, under section 62 of the Supreme Court Act 1905 the Chief Justice is empowered to make Rules regulating the practice of the Court, and Chief Justice Ground took the necessary steps to ensure that the Commercial Court became a reality.

Many leading financial centres have specialist commercial courts designed to deliver speedy and commercially sensible decisions in a way which encourages international businesses to do business with the domicile in question. Bermuda was possibly the first offshore financial centre to establish such a court, although it has now been emulated by BVI and Cayman. What has the record of Bermuda’s Commercial Court been over its first five years?

Jurisdiction of the Court

What types of matter are eligible for being commenced or transferred into the Commercial List created by Order 72 of the Rules of the Supreme Court is very broadly defined. Typical cases include contractual disputes between companies, winding-up proceedings, shareholder disputes and arbitration-related applications. Although applications in relation to trusts are not technically considered to be ‘commercial’ matters, in practice such matters are ordinarily dealt with by a commercial judge.

Court staff and premises

Throughout the five-year period in question (and thereafter), there have been at least two designated Commercial Judges.

In May 2008, an informal Commercial Court Consultative Committee was formed comprising representatives of ABIC, BIBA (Business Bermuda’s predecessor organisation) and four members of the Commercial Bar. The object of this Committee was to provide a vehicle through which the Commercial Court could be kept apprised of any concerns about the quality of its service provision by Court users.

The lack of appropriate accommodation was identified as the main problem at this time. It was resolved to tackle the absence of suitable Court premises by way of representations to Government.

In July 2010, dedicated premises were opened for the Commercial Court.

Output of the Court

One measure of the output of the Commercial Court is to analyse quantitatively the speed of decision-making and the extent to which the Court’s decisions have been upheld on appeal. Statistics compiled by the Court and based solely on those significant cases in which considered judgments have been prepared and published indicate that for the five-year period 2006 to 2010: (1) the average time for delivering judgments was 14.43 days, and (2) an average of 86.66 % of the Court’s appealed decisions were subsequently upheld on appeal.

The volume of the work processed by the Court is difficult to assess as a significant number of cases are disposed of without a contested hearing resulting in a considered judgment. However, the number of cases commenced in the Commercial List has ranged from 73 in 2006, down to a low of 45 in 2008 and up to a high of 108 in 2010. (There were 75 Commercial List filings in 2011, the second-highest number of filings since the Court was established in 2006).These figures do not include trust cases or de facto commercial cases which were commenced either before or after 2006 but were not formally filed in or transferred into the Commercial List.

Also noteworthy are the various Practice Directions issued by the Chief Justice to regulate the conduct of commercial cases. On May 25, 2006, a Practice Direction on Civil Procedure was issued setting new case management powers designed to streamline the progress of heavy commercial cases through the courts. On October 1, 2007, Guidelines for Court-to-Court Communications in Cross-border (Insolvency) Cases were published, followed by Guidelines Applicable to Schemes of Arrangement under Section 99 of the Companies Act 1981 on October 8, 2007. Finally, on June 13, 2008, the need for advocates to wear wigs and gowns in open court matters in the Commercial Court was abolished to better reflect a modern business-like approach to commercial dispute resolution.

A more qualitative measure of the Commercial Court’s output may be found in the views of those who use the Court. Two examples should suffice. Alex Potts then of Conyers Dill & Pearman in an April 2009 article entitled ‘Commercial and Trust Litigation and the Commercial Court in Bermuda’ contended that:

“…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 birthday.”

Kiernan Bell of Appleby, writing the Bermuda Chapter in ‘The Dispute Resolution Review’ 3rd edition (2011) stated in more matter of fact terms: “Bermuda now has a Commercial Division of the Supreme Court. Commercial cases are allocated to specialist commercial judges, thus ensuring that commercial matters are dealt with by judges with the appropriate expertise and are dealt with expeditiously.”

Conclusion

As Chief Justice Richard Ground prepares to end his tenure in Bermuda, the importance of his contribution to the main pillar of Bermuda’s economy and the standing of Bermuda’s legal system through the establishment of the Commercial Court cannot be overstated. He has ensured that the Court, over its first five years, has made a strong start.

The Commercial Court is now an integral part of Bermuda’s legal infrastructure and it is hoped and expected that its performance will be consolidated in the years to come.

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Published Mar 2, 2012 at 8:12 am (Updated Mar 2, 2012 at 8:10 am)

Bermuda’s Commercial Court: The first five years

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