Opposing sides in the ongoing dispute over Electric Mutual Liability Insurance Co. (EMLICO) are at odds over the meaning of last week's Supreme Court ruling over costs.

Puisne Judge Richard Ground ruled that Kemper Reinsurance must reimburse the estate of EMLICO-in liquidation for legal fees incurred in defeating Kemper's July attempt to halt EMLICO's winding-up petition.

Kemper has a 14-day window from February 19 to challenge the ruling, but there London lawyer, Christopher Grierson, partner with Lovell Durrant, said no decision has yet been made.

EMLICO's joint liquidators, David Lines and Peter Mitchell of Coopers & Lybrand Bermuda and Christopher Hughes of Coopers & Lybrand UK said in a prepared statement yesterday: "The award covers the fees of not only EMLICO's Bermudian barristers, but the company's US and English attorneys as well.'' Mr. Grierson replied: "That's untrue, because all the judge said is that the register could consider the fees of Freshfields and Shearman & Sterling. It doesn't mean that at the end of the day, having considered them, that they will be awarded those fees.'' Kemper disputed the need for the liquidators, whose lawyers are Appleby, Spurling & Kempe (AS&K), to use the services of the overseas law firms.

Mr. Grierson said: "I don't think any assumptions can be made that the bill is larger than normal. It will take many months to complete the process of possible taxation.

"I think anyone who believes Justice Ground is allowing more than would be normally allowed in costs, is misreading the ruling. He was asked to give directions to the Registrar, within her own discretion, to allow more items than she normally would. But what she allows is completely in her discretion.

There will be, undoubtedly, argument in front of her about what she should or should not allow.'' The joint liquidators' statement quoted Justice Ground: "Kemper sought to intervene in this matter to advance their own interests, as a direct result of which the hearing was prolonged to 12 days, whereas it would otherwise have been disposed of in a matter of minutes...I do not see why the estate...should bear the costs occasioned by this intervention.'' The statement continued: "Kemper's unsuccessful challenge to EMLICO's winding-up petition last July was clearly misconceived. Now that the Bermuda courts have recognised EMLICO's insolvency and rejected efforts to challenge EMLICO's Bermuda domicile, we are eager to move ahead with EMLICO's winding-up proceedings in a most expeditious manner.

"We are pleased with Justice Ground's fee award, which we believe will serve as a deterrent in the future to businesses that intervene in litigation simply to avoid their obligations under lawful treaties.'' Mr. Grierson responded: "EMLICO sought to obtain a higher basis for the award of costs against Kemper Re for what is called the `common fund' (as opposed to the `party and party' award granted), alleging the claim was completely misconceived, and effectively to punish Kemper for having intervened.

"And the judge specifically rejected that argument. So that quote is completely counter to what the judge has said. It is a complete misrepresentation.'' Mr. Grierson also doubted the position taken by litigation manager at AS&K, Kelvin Hastings-Smith, that Justice Ground's ruling went further than judges before him, in providing more of an opportunity to recover the cost of services provided by overseas attorneys.

"That is yet to be determined,'' he said. "It is being held out as a major step forward. I'm not sure it is, one way or the other. It still has to be battled out in a lot of detail. The ruling is also subject to appeal.

"I can remember being in court when I counted 14 people on their side and six on our side. It can be argued that the other side indulged in complete overkill in the number of people they had on the job, so we are going to be looking at their claims for costs with very great care.'' BUSINESS BUC