BERMUDA Law and Practice Contributed by: Brad Adderley, Matthew Carr, Max Tetlow, Cathryn Minors, Josephine Noddings, Aleisha Hollis, Melinda Mayne, Milaun Perott and Mya Gibbons, Appleby
9.2 Insurance Disputes Over Jurisdiction and Choice of Law In most commercial contracts (including insurance contracts), a clause is included regarding the choice of law and jurisdiction for disputes in relation to the contract. The inclusion of this provision allows the parties to agree in writing upon a choice of forum for hearing disputes. 9.3 Litigation Process Where the contract states that Bermuda law will be the governing law, any disputes regarding the contract will be heard in Bermuda. Commercial disputes within Bermuda are heard by the Supreme Court Commer- cial Division, for which the rules and litigation process are governed by the Supreme Court 1985. As in many jurisdictions, parties are encouraged to reach a set- tlement among themselves, to the best of their ability, prior to commencing legal proceedings. Where this cannot be achieved, litigation can be commenced by writ, originating summons, an originating motion or petition. The initiating party will be responsible for service on the opposing party. Following the originat- ing summons to commence proceedings, the process will move through the steps of interim applications, discovery, trial and hearing, and close with the judg- ment. Parties to an action in the Supreme Court can appeal a judgment, with the appeal being heard in the Court of Appeal. 9.4 Enforcement of Judgments Two categories of rules apply in relation to the enforce- ment of foreign judgments, the first of which includes the statutory rules under the Judgements (Reciprocal Enforcement) Act 1958, which apply to judgments of courts in the UK and certain Commonwealth countries and overseas territories. Under this Act, foreign judg- ments registered by a jurisdiction that also recognises the Act will be enforced. Secondly, in Bermuda, there are common law rules that are applicable to the judg- ments of courts in the rest of the world, particularly the United States. 9.5 Enforcement of Arbitration Clauses Arbitration clauses are common within the commercial contracts in Bermuda. Where arbitration clauses are included in insurance contracts, they tend to limit the handling of any disputes strictly to arbitration. Gener-
Transformers A transformer (usually a special-purpose vehicle reg- istered as a Class 3 insurer, collateralised insurer or SPI) converts risk under a (re)insurance contract into a form suitable for the capital markets, such as in credit derivatives (or vice versa). This form of structure is advantageous as it allows (re)insurers to access new sources of capital without relying on traditional (re) insurance. 7.2 Foreign ART Transactions Concerning foreign ART transactions, see 7.1 ART Transactions . 8. Interpreting an Insurance Contract 8.1 Interpretation of Insurance Contracts and Use of Extraneous Evidence There is no applicable information in this jurisdiction. 8.2 Warranties There is no applicable information in this jurisdiction. 8.3 Conditions Precedent There is no applicable information in this jurisdiction. 9. Insurance Disputes 9.1 Insurance Disputes Over Coverage The regime under the SAC Act has received its first comprehensive review. In August 2023, Chief Justice Hargun delivered a judgment upholding the integrity of the statutory regime governing the creation and operation of segregated accounts companies (SAC) in Bermuda. This court case marks the first challenge to the principles of SAC and further solidifies their legitimacy as a vehicle fit to provide a separation of assets from a general account. Many Bermuda law-governed insurance contracts contain arbitration clauses, which make disputes between the parties subject to arbitration; as a result, they are not publicised. This is not always the case, however.
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