creditors in a Bermudian liquidation.

Acting Puisne Judge Mr. Justice Meerabux went against the Insurance Acts of the United Kingdom with his decision in Supreme Court yesterday.

Mr. Justice Meerabux said: "There are no acts of general application to Bermuda and there is no question of violating any UK statute by admitting the claims in a Bermudian liquidation.'' The company concerned in the liquidation is Chorley Company Ltd, a member of syndicates managed by an English company Stetzel Thomson & Co. Ltd (ST).

Chorley was incorporated in Bermuda and carried on business as an insurance company from premises in Bermuda. It was duly licensed as a general insurer under the Insurance Act, 1978.

Chorley was owned by the Superior Oil Company and wrote risks for them. In 1984 Superior Oil Company was bought by Mobil Oil and shortly thereafter Chorley went into `run-off.' In the years 1982 to 1983, Chorley was a member of certain reinsurance syndicates for whom ST acted as an agent, and during that period, all the other members of ST Syndicates and carried on business outside the United Kingdom.

ST had been incorporated in England in 1969. It carried on the business of operating marine, aviation and non-marine reinsurance underwriting syndicates from premises in London.

Mr. Justice Meerabux said: "The business was not within any of the ordinary well-recognised groups such as Lloyds and similar markets in London. It was an appendage to the London market and the main members of the syndicates appear to have been foreign, non-English insurance companies.'' During 1982 and 1983 Chorley became the front for a number of the syndicates as it had become unlawful for unauthorised insurance businesses in England.

Then at the end of 1983, ST ceased to trade and went into creditors' voluntary liquidation in England in 1985.

Mr. Justice Meerabux added: "Chorley was ordered to be wound up by this Court on April 16, 1992, and Mr. David Anfossi was duly appointed liquidator.'' But because of the English Insurance Acts it appeared that $270,947 would be surplus to local creditors' claims and that money would be paid out to shareholders.

On the other hand, if the claimants from England were paid out there would be a deficit of $140,804.

Mr. Justice Meerabux said: "It seems that the contracts in questions are contracts which cannot be enforced in England, the country that is the proper law of the contracts.

"But the unenforceability is contrary to Bermuda public policy as reflected in the Insurance Act 1978.'' He felt, looking at all the evidence, that the English legislation could offend Bermuda's "public policy notion of morality in relation to the essential insurance interests of the community.'' He said: "It should be noted that the Insurance Companies Acts of the United Kingdom are not acts of general application to Bermuda and there is no question of violating any United Kingdom statute by admitting the claims in a Bermuda liquidation.'' Mr. Justice Meerabux disregarded the provisions which made the contracts unenforceable. He ordered costs to be paid as an expense of winding up the company.