here has provoked surprise, David Fox reports. It marks another twist in the ongoing EMLICO story.

A key lawyer has expressed surprise at the move by Bermuda liquidators to block the Massachusetts commissioner of insurance, Linda Ruthardt, from coming to Bermuda in a bid to gain control of the estate of insolvent EMLICO (Electric Mutual Liability Insurance Co., Ltd.) David Leslie, Special Assistant Attorney General who represents the commissioner, said by telephone in Boston, that it would make more sense for the defunct company to be liquidated in the US.

He said that the 70-year-old insurer had lived all its life in the US, and actually spent just a few months here before declaring itself insolvent.

But he stressed that the commissioner in no way sought to impugn the sovereignty of Bermuda institutions.

Mr. Leslie said, "Where is the preponderance of interests in this matter? We would respectfully suggest that preponderance of interests are overwhelmingly in favour of a United States proceeding. We would not seek in any way to disturb what's gone on in the proceeding in Bermuda. We would not seek to reverse any of the commutations which have been approved by the court or otherwise disturb what's gone on up to now.

"We think this is respectful. We don't quite understand why the joint liquidators have gone into a federal court here in Boston to essentially prevent us from coming to Bermuda to ask these questions.

"It seems kind of reversed from what you would expect. You would think they would be saying that only Bermuda can deal with these questions and you need to come here to have them dealt with. And that's what we are proposing to do.'' Ms Ruthardt has again written to the Minister of Finance, Grant Gibbons, concerning her intention to be appointed receiver of EMLICO.

She referred to the Minister's January 30 letter to liquidators in which Government offered assistance in resolving the stand-off between the two jurisdictions. Courts in Massachusetts and Bermuda have claimed EMLICO as their own.

In a press statement on Thursday night, Dr. Gibbons said he wrote to the liquidators "regarding the potential conflict developing'' between the courts in two jurisdictions -- Massachusetts and Bermuda -- and between the commissioner and the liquidators.

She paid particular attention to the Minister's stated concern about potential conflicts between the two jurisdictions.

Early last week, her first letter to the Minister was in transit the same day Chief Justice Austin Ward's letter was on the move to a Massachusetts judge asking him to direct the commissioner to meet with liquidators. The Chief Justice's letter included the Ministerial statement of concern.

Ms Ruthardt's initial letter outlined her intention to obtain a state court's permission for her appointment as receiver, as is required by law for insolvent insurers.

In 1995, she purportedly gave EMLICO permission to move to Bermuda. But Massachusetts courts have ruled she had no authority to do so, and, said that in effect, EMLICO never left and still is a Massachusetts insurer.

But EMLICO, just four months after arriving here, sought a winding up petition in the Supreme Court, and is currently under a liquidation order. The liquidators are David E.W. Lines and Peter C.B. Mitchell of Coopers & Lybrand Bermuda, and their UK partner Christopher Hughes.

Mr. Leslie said that the commissioner's office has been taken by surprised by actions of the joint liquidators.

He said he doesn't understand their legal argument in the US District Court involving comity, suggesting that if the commissioner places EMLICO into receivership in the US it violates the spirit of international comity and is disrespectful of the Bermuda proceedings.

Mr. Leslie said, "We don't understand all that, frankly. We have been quite clear. The commissioner has been clear in discussions directly with the liquidators.

"Our letter to the Minister confirms that the commissioner intends, once appointed as receiver, to come to Bermuda to make our request to the Bermuda Government officials, give them an opportunity to talk to us and discuss it and make a decision about what they think is appropriate.

"We think it is the right thing to do. If they agree with us, that would be wonderful. If they disagree with us, we respect that as well, and we would then seek to convince the Bermuda court of our position.

"If the courts don't agree with us, then that's the resolution. But the commissioner feels that is what she needs to do, under Massachusetts law, pursuant to the Supreme Judicial Court's January 5 order.

"We don't think that's a source of international conflict. We don't think we are being presumptuous. We think we are being very respectful of Bermuda and we are not asking anyone there to do anything not allowed under Bermuda law.

"These are issues clearly within the discretion of the government officials and the courts. So that is all we ask to do.'' Grant Gibbons