The Bermuda Supreme Court ("the Bermuda Court") has reinforced its embrace of international comity in cross-border insolvency -- an important development for those concerned with the international recognition and enforcement of liquidation proceedings.
In its recent decision in In the matter of Saad Investments Company Limited [2013] SC (Bda) 28 Com (15 April 2013), the Bermuda Court reaffirmed the correctness of its common law jurisdiction to assist foreign liquidators in accordance with the principles laid down in Cambridge Gas Transportation Corp v Official Committee of Unsecured Creditors of Navigator Holdings plc [2006] UKPC 26. There was some question as to whether those principles survived the criticism of Cambridge Gas by a majority of the English Supreme Court in Rubin v Eurofinance andNew Cap Re v AE Grant [2012] UKSC 46.
The Bermuda Court held that, at the very least, it has power to assist foreign liquidators by deploying general law remedies generally consistent with those to which a locally appointed liquidator would be entitled under local insolvency legislation. This would be the case even if the legislation itself could not apply to the foreign liquidation and would be defined on a case by case basis. However, the Bermuda Court went further to say that it regarded the scope of assistance as extending to providing even the remedies available under the local legislation themselves.
The Bermuda Court's decision was consistent with a recent decision of the Cayman Grand Court which found that the statutory avoidance provisions in the Caymanian insolvency legislation could be available to a foreign officeholder under the common law even though that legislation could not govern those foreign proceedings. It was also consistent with a decision in the English High Court which similarly concerned the use of avoidance provisions. The Bermuda Court was careful to point out that a decision to extend the benefit of local avoidance provisions was a non-traditional form of assistance and more complex than the decision before the Bermuda Court which concerned simply the ability to obtain orders requiring information from those within the jurisdiction.
Bermuda has no statutory framework of international co-operation in the field of insolvency, unlike the UK and the US, and so the clarification of the position under the general law on such issues is always eagerly anticipated.
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