BERMUDA Law and Practice Contributed by: Natalie Neto, Rachel Nightingale, Hannah Tildesley and Marah Smith, Walkers
• the Human Rights Act 1981. The following statutes are also relevant and should be considered: • the Bermuda Immigration and Protection Act 1956; • the National Pension Scheme (Occupational Pen - sions) Act 1998; • the Payroll Tax Act 1995; and • the Personal Information and Protection Act 2016. 2.6 National Security Review There are no national security reviews of acquisitions in Bermuda. 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments In the matter of Nkwe Platinum Limited v Glendina Pty Limited & Others 2021 , the Supreme Court of Ber - muda considered the following three issues: • the legal effect of an amalgamation under Sections 104–109 of the Companies Act; • whether the amalgamation of two previous entities is ipso facto a new entity; and • whether the amalgamation resulted in a “transfer” of the property from the amalgamating companies to the amalgamated company. The Court ruled that the amalgamating companies continue to exist as one amalgamated company, and the property and assets of each company becomes the property of the amalgamated company by opera - tion of law and not by way of transfer or by operation of contract. From a legal developments standpoint, the Bermuda Court has seen a significant increase in shareholder appraisal actions under Section 106 of the Compa - nies Act. This section of the Companies Act allows shareholders that did not vote in favour of a merger or amalgamation that was approved by the shareholders of the company to seek an appraisal of the fair value of their shares.
Until recently, appraisal cases under Section 106 of the Companies Act were rare, but shareholders have become more active in seeking the remedy following a merger, particularly (though not exclusively) in take- private transactions. A significant amount of this activ - ity has been generated by arbitrage funds purchasing shares in the company with the express purpose of seeking a fair value appraisal. These funds have been pursuing this strategy with some significant success in the Cayman Islands for a number of years under their comparable fair value legislation. There are currently at least six noteworthy appraisal cases proceeding through the Bermuda courts, and a number of which have been issued but subsequently resolved. Most noteworthy of these is Glendina Pty Limited & Ors v NKWE Platinum Ltd , which was the first Section 106 matter to reach trial in Bermuda. The shareholders were successful, achieving a 33% uplift in fair value. The court was significantly guided by the Cayman jurisprudence on fair value and the Cayman approach to appraisal claims, finding as follows. • The fair value of the shares of a dissenting share - holder was held to be “ the value to it of its propor - tionate share of the business if it were sold as a going concern in a hypothetical arm’s length trans - action. It was the estimated price for the transfer of an asset between identified, knowledgeable and willing parties that reflected the interests of those parties ”. • Specifically, the use of the term “fair” requires that “ the manner and the method of that assess - ment and determination is fair to the dissenting shareholder by ensuring that all relevant facts and matters are considered and that the sum selected properly reflects the true monetary worth to the shareholder of what he has lost, undistorted by the limitation and flaws of particular valuation method - ologies and fairly balancing, where appropriate, the competing, reasonable reliable alternative approach to valuation relief upon by the parties ”. • On the burden of proof, the court concluded that it should follow its usual methods of resolving disputed questions of fact and expert evidence. However, neither party has the burden of proving
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