Bermuda law should apply in Credit Suisse case, court told
A case with tentacles that reach into Switzerland, the Caucasus nation of Georgia, as well as the United Kingdom’s territories of Bermuda, the British Virgin Islands and Cayman Islands has lawyers for a Georgian plaintiff saying it is Bermuda’s law that should apply to key aspects of the case.
Louise Hutton, QC, who is a member of the plaintiff’s legal team, argued the point during her presentation in the concluding days of this five-week-long trial, being heard remotely in Bermuda’s Supreme Court.
The billionaire former Prime Minister of Georgia, Bidzina Ivanishvili, held a significant portion of his wealth in Credit Suisse Life (Bermuda) life insurance policy accounts.
He is suing for the $400 million lost in an investment he claims he did not authorise.
He is blaming the relationship manager from the bank, who was eventually jailed for fraudulent activity, including activity at the Bermuda insurance offshoot of the bank.
The oligarch is blaming the rogue relationship manager for unauthorised activity which led to a call on his money.
It was in response to questions from Bermuda’s Chief Justice, Narinder Hargun, that Ms Hutton explained why Bermuda’s law should apply in this case.
She said that there is “such a variety” of geographical locations but other than Bermuda, the extent of the substance of any other jurisdiction is “very tangential”.
She explained that when one tries to identify the single place where the real substance is of what has happened, it was money put in place in Credit Suisse Life (Bermuda) which is pursuant to a Bermuda law governed contract.
She added there are also pre-contractual obligations in this case, and the question again arises as to whether Bermuda or Georgian law applies.
Mr Ivanishvili signed the documents setting up the unit-linked insurance policies in Georgia, but she said she believes the pre-contractual duties would also be governed by Bermudian law.
The link between the events which led to the $400 million call and Credit Suisse Life (Bermuda) have also been called into question by lawyers for Credit Suisse.
Stephen Moverley Smith, QC, beginning his own closing arguments yesterday, said that Credit Suisse and Credit Suisse Life (Bermuda) were separate entities, and the Bermuda company could not be held responsible for events that occurred in Credit Suisse, the bank.
However, Joe Smouha, QC, another member of the tycoon’s legal team, had said earlier that the unit-linked insurance policies initiated two direct legal relationships — the client (who was Mr Ivanishvili) with Credit Suisse Life, and then Credit Suisse Life with Credit Suisse, the bank.
“The contractual root connecting the client and the bank is a two-limbed one, along the chain,” he said.
The Chief Justice also heard from Mr Smouha that his final judgment in the case would not require that he compute the sum for damages.
“The actual damages are to be determined after the judgment which will take the Chief Justice’s findings and do the calculations based on those,” he said.
The case continues.