Topic Archives: Bermuda Case Law & Legislation

During April 2018, the Government of Bermuda tabled the Companies and Limited Liability Company (Initial Coin Offering) Amendment Act 2018 (the “ICO Act”), introducing a statutory framework for initial coin offerings (“ICOs”). By implementing this new legislation, the Bermuda Government is hoping to lay the foundation for the jurisdiction to become a leading global blockchain and ICO centre. The ICO Act regulates offerings of ‘digital assets’, which are meant to capture all of the various categories of digital coins and tokens (whether they be utility, securitized, equity or otherwise) being issued as ICOs and via token sales. The purpose of the ICO Act is to only regulate those ICOs and token sales which are public crowd funding or similar type projects. It is not intended to regulate either private sales or those which are engaged in the business of pure virtual currency issuances. Digital asset offerings will be conducted in accordance with the requirements of published regulations as well as ongoing supervision and compliance requirements, including AML/ATF.

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It is well recognised that in the context of certain types of banking transactions a presumption of undue influence can arise. An example of this would be where an individual is agreeing to charge a property which they own in order to secure the debts of their spouse. The question of whether a lack of independent legal advice invalidated a guarantee was considered recently in a case before the Chief Justice: Clarien Bank v E Kempe.

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It is always reassuring when a decision of the court validates and confirms the adage that the law is largely just “common sense with knobs on” (in the words of Lord Sumption).

The loser in a recent injunction case wanted to be able to rely upon privileged information contained in the bill of costs submitted by the winner, and to use that information against the winner in the arbitration proceedings that were pending between the parties. This is pretty outrageous, and one would readily expect that this would not be permissible.  It isn’t.

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In the matter of G Trust [2017] SC (Bda) 98 Civ (15 November 2017)

In the 2015 case of Re BCD Trust (confidentiality Order) [2015] Bda LR 208, the Chief Justice had confirmed that with respect to administration of trust cases, proceedings could be anonymised and dealt with as private applications where there was no obvious public interest in knowing about an internal trust administration matter.

In a recent ruling from November 2017, the Chief Justice has re-confirmed his previous finding with respect to confidentiality orders in the context of trust administration matters.
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Meritus Trust Company Limited v Butterfield Trust (Bermuda) Limited [2017] Bda LR 82

In October 2017, Chief Justice Kawaley ruled that an outgoing trustee is neither entitled to retain any part of the trust assets as security for its equitable indemnity as former trustee nor demand a contractual indemnity.

This case involved an outgoing institutional trustee who upon being removed (as opposed to having retired) as trustee of two trusts, refused to hand over sizeable trust assets or trust documents to the new trustee without first obtaining a contractual indemnity and retention of assets from the two trusts. This was against the backdrop of a potential breach of trust claim of an approximate value of $5 million. The trust deeds did not confer any express retention or contractual indemnity rights on the former trustee.
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