Bermuda: Asset Tracing and Recovery

1. What is the legal framework governing civil asset recovery in your jurisdiction, including key statutes, regulations, and international conventions that have been incorporated into domestic law?

Bermuda does not have a single codified regime governing civil asset recovery. Instead, recovery is primarily based on a combination of common law and equitable principles, statutory provisions and procedural rules. Key equitable doctrines include constructive trusts, resulting trusts and unjust enrichment, which are often applied alongside common law causes of action in asset recovery cases. While common law in Bermuda have in some respects been modified in light of the unique circumstances of the jurisdiction, commonwealth cases, and English authorities in particular, remain highly persuasive in the development of jurisprudence in Bermuda.

Additionally, Bermuda has also implemented legislation to align with international standards on anti-money laundering and asset recovery. For example, the Proceeds of Crime Act 1997 (POC) provides the statutory basis for anti-money laundering controls and the identification and confiscation of the proceeds of crime.

2. What types of assets may be subject to civil recovery proceedings (e.g., real property, bank accounts, securities, cryptocurrencies, intellectual property, business interests or other categories of property)?

A wide range of assets may be the subject of civil recovery proceedings in Bermuda. The courts adopt a broad conception of property, consistent with common law and equitable principles, which allows recovery of both tangible and intangible assets. Recoverable assets can include real property and interests in land, bank accounts and cash deposits, shares and other securities, contractual rights, and business interests. Bermuda’s prominence as a trust jurisdiction also means that civil recovery proceedings often concern trust property and beneficial interests, particularly in cases involving breach of trust or fiduciary wrongdoing. Intangible assets, including intellectual property rights, are also capable of recovery.

In June 2023, the Chief Justice of the Supreme Court of Bermuda found, in an unreported case involving BlockFi, that digital assets are capable of being treated as property under common law. This decision suggests proprietary remedies can be pursued in respect of digital assets, e.g. injunctive relief and tracing applications.

3. What are the primary civil law causes of action and mechanisms available for asset recovery? Please briefly distinguish these from any criminal confiscation or forfeiture regimes.

The principal civil law causes of action include breach of trust, breach of fiduciary duty, dishonest assistance, knowing receipt, unjust enrichment, fraud and deceit, as well as common law claims such as conversion and conspiracy.

There are a range of remedies available to litigants, including relief to preserve and prevent the dissipation of assets, by way of freezing orders or other injunctive relief, as well as disclosure and investigative tools that enable claimants to identify the location and movement of assets. In practice, these mechanisms are often deployed at an early stage to prevent dissipation and to obtain information from third parties such as financial institutions or intermediaries.

Civil asset recovery is distinct from criminal confiscation or forfeiture regimes. Criminal asset recovery is typically pursued by the state under separate statutory frameworks, such as the POC and is punitive in nature, operating following conviction or through statutory civil forfeiture procedures. By contrast, civil asset recovery is claimant-driven, focuses on the vindication of private rights, and is governed by the civil standard of proof. The two regimes may operate in parallel, but they serve different purposes and are subject to different procedural and evidential rules.

4. Who has standing to initiate civil asset recovery proceedings (e.g. private parties, corporations, trustees, insolvency practitioners, receivers, or state agencies)?

This would depend on the nature of the claim and the interest asserted in the assets. Private individuals or corporations frequently initiate claims for civil asset recovery based on the causes of action listed at 3. Trustees may bring proceedings to recover misappropriated trust assets. In an insolvency context, liquidators (and provisional liquidators in certain circumstances) can investigate transactions and pursue claims on behalf of the insolvent estate, including seeking a freezing order to preserve and prevent the dissipation of assets of the company in liquidation.

5. What is the legal status of foreign states or governmental entities bringing civil asset recovery actions? Are any limitations imposed by sovereign immunity, forum non conveniens, or other doctrines?

The Bermuda courts would likely facilitate civil asset recovery actions in Bermuda claims brought by foreign states where there is a sufficient jurisdictional nexus, for example where the assets are located within Bermuda. The courts would consider the nature of the claim, the interest asserted in the assets, and any relevant principles limiting jurisdiction.

6. How are corporate vehicles, trusts, foundations, nominees and other intermediaries treated in civil recovery proceedings when pursuing assets held through layered structures? Are veil-piercing or analogous doctrines available?

Bermuda courts are experienced in dealing with complex asset-holding structures involving corporate vehicles, trusts, and nominee arrangements, and will look beyond formal ownership to identify the true beneficial interest in assets. Where assets have been misappropriated, claimants may rely on proprietary claims and equitable tracing to recover assets held by intermediaries, including nominees or entities used to obscure ownership.

While Bermuda law recognises the separate legal personality of corporate entities, the courts may, in limited circumstances, apply doctrines analogous to veil-piercing where a company is used as a façade to conceal a wrongdoing. More commonly, however, claimants rely on equitable remedies such as constructive trusts, dishonest assistance, and knowing receipt to reach assets held through corporate or trust structures.

Overall, the combination of equitable tracing, fiduciary principles, and disclosure mechanisms enables Bermuda courts to address attempts to shield assets through complex, multi-layered arrangements, particularly in cross-border contexts involving offshore structures.

7. What are the jurisdictional requirements for bringing civil asset recovery proceedings in the courts of your jurisdiction? How are conflicts of jurisdiction resolved?

Jurisdiction in civil asset recovery proceedings in Bermuda will generally be assumed by the Bermuda courts if they are satisfied that the cause of action has a sufficient connection to Bermuda; namely, the assets are located in Bermuda, or Bermuda entities or structures are involved. In addition, the court must be satisfied with all service requirements on the defendant(s) within or outside the jurisdiction.

8. Does your jurisdiction recognize and enforce foreign civil judgments and orders relating to asset recovery? What are the procedural requirements and grounds for refusal?

Under the Judgements (Reciprocal Enforcement) Act 1958 (Reciprocal Judgements Act), a judgment of a superior court in the United Kingdom or other designated common law jurisdiction may be registered and enforced as a judgment in the Bermuda courts to the extent the foreign judgment is: final and conclusive as between the parties; and is for a fixed sum of money (not being in respect of taxes or in respect of fines or penalties).

Under Bermuda’s common law, the Bermuda court may, subject to certain requirements, recognise judgments from foreign jurisdictions not otherwise qualifying for registration under the Reciprocal Judgments Act for a liquidated sum by way of summary judgment.

Bermuda has not adopted the UNCITRAL Model Law on Cross-Border Insolvency on Recognition and Enforcement of Insolvency-Related Judgments and is not currently considering its adoption. Foreign liquidators may apply for recognition in Bermuda pursuant to Bermuda’s common law and the principles of comity.

9. What mechanisms exist for international cooperation in civil cross-border asset recovery? How can parties obtain evidence or assistance from foreign jursidictions?

Evidence may be gathered for use in foreign proceedings under the provisions of Part IIC of the Evidence Act 1905 and Order 70 of the Rules of the Supreme Court 1985. In addition, as outlined at 8, Bermuda maintains reciprocal arrangements with several jurisdictions under the Reciprocal Judgements Act, allowing foreign monetary judgments to be registered and enforced locally.

10. What interim measures are available to preserve assets pending resolution (e.g. freezing injunctions, Mareva injunctions, asset preservation orders, saisie conservatoire, attachments)? Please briefly summarise the requirements for obtaining such relief.

Under Order 29 of the Rules of the Supreme Court 1985, there is a wide range of interim remedies available to claimants, including an injunction preserving and maintaining assets. Freezing injunctions (commonly referred to as Mareva injunctions) restrain a defendant from dissipating or dealing with assets within Bermuda, and, in appropriate cases, on a worldwide basis. Ancillary orders may also be granted to support the effectiveness of such relief, including disclosure orders requiring the defendant to identify the nature and location of their assets. To obtain a freezing injunction, the claimant must adduce evidence that there is a real risk of dissipation of assets and that justice requires the grant of a freezing injunction to prevent that dissipation. Applications are frequently made on an ex parte basis where there is a risk that notice would prompt the dissipation of assets.

11. What disclosure, tracing, and investigative tools are available in civil proceedings to assist claimants in identifying, tracing, and recovering assets (including any pre-action or in-proceedings mechanisms)?

Bermuda courts provide a range of disclosure and investigative tools that may be deployed to identify and trace assets, including orders against third parties. Norwich Pharmacal orders can be sought in Bermuda if the court is persuaded that there is a credible arguable case of wrongdoing, which, if granted, may require third parties who have become innocently involved in the matter to disclose documents or information that could help identify the wrongdoer. In addition, the court can compel a defendant to disclose details of their assets in aid of an injunction or freezing order.

12. What proprietary or analogous remedies (e.g., in rem claims, restitutionary claims, vindicatory actions) are available for recovering misappropriated assets?

In Bermuda, claimants may pursue proprietary or analogous remedies to recover misappropriated assets. Key remedies include:

• Constructive and resulting trusts: Where assets have been wrongfully transferred or misappropriated, the courts may impose a constructive or resulting trust, allowing the claimant to assert a proprietary interest in the assets.
• Equitable tracing: This allows claimants to follow misappropriated assets into the hands of third parties, including nominees or intermediaries, provided the assets can be identified.
• Restitutionary claims: Where a defendant has been unjustly enriched at the claimant’s expense, the courts may order restitution or disgorgement of the benefits received.
• Vindicatory or proprietary claims: Where a claimant asserts ownership or a property right, the courts may grant remedies to vindicate those rights, including injunctions, delivery up of property, or orders for the sale of assets to satisfy claims.
• Ancillary remedies: In appropriate cases, the courts may also appoint receivers, grant freezing or search orders, or issue orders requiring disclosure of relevant information to facilitate recovery.

13. What are the relevant limitation periods for civil asset recovery claims? Are there extensions or suspensions in cases involving fraud, concealment, or delayed discovery?

Limitation periods for civil proceedings in Bermuda are governed principally by the Limitation Act 1984, with the applicable period depending on the nature of the underlying cause of action. Claims in contract or tort are generally subject to a six-year limitation period, while claims relating to land are generally subject to a 20-year limitation period. Claims for breach of trust (other than fraudulent) are also subject to a six-year limitation period.

Where a claim involves fraud or deliberate concealment, or mistake, the limitation period may commence on the date the claimant discovers, or could with reasonable diligence have discovered, the relevant wrongdoing.

14. What is the applicable standard of proof in civil asset recovery proceedings? How does this compare to the criminal standard, if relevant?

The standard of proof in civil asset recovery proceedings in Bermuda is the balance of probabilities. A claimant must establish that it is more likely than not that the alleged misappropriation, breach of trust, or wrongdoing occurred.

Where allegations of fraud or dishonesty are advanced, the courts require cogent and persuasive evidence commensurate with the seriousness of the allegation. This does not amount to a higher standard of proof, but reflects a more careful evaluation of the evidence. By contrast, criminal confiscation or forfeiture proceedings apply the higher standard of proof beyond reasonable doubt, reflecting their punitive nature.

15. Where does the burden of proof lie, and are there any evidential presumptions or burden-shifting mechanisms (e.g. in cases involving unexplained wealth or transactions at an undervalue)?

In civil asset recovery proceedings, the burden of proof generally rests with the claimant/plaintiff, who must establish the elements of the cause of action on the balance of probabilities. In certain circumstances, the burden may shift to a recipient of an asset, for example clawback provisions under the Bermuda Companies Act 1981, where the recipient must demonstrate that a challenged transaction was bona fide or that the company remained solvent at the time of the transaction.

By contrast, in criminal proceedings, the burden of proof is that beyond a reasonable doubt, and evidential presumptions operate differently.

16. What defences are available to respondents in civil asset recovery proceedings (e.g., change of position, limitation, laches, good-faith purchaser for value)?

The available defences will depend on the nature of the claim and the remedy sought. For example, in the context of a freezing order, the defendant can adduce evidence to refute the claimaints’ assertion that there is a real risk of dissipation. Defendants may also rely on the expiration of limitation periods in seeking to have the claims barred from being pursued if brought outside the statutory limitation periods, or the applicable common law period for the cause of action.

In claims founded in unjust enrichment, the defence of change of position may be available where the respondent has acted in good faith and materially altered their position in reliance on the receipt of the assets. In cases involving allegations of dishonest assistance or knowing receipt, the absence of knowledge or dishonesty may operate as a substantive defence.

17. How are third-party rights protected in civil recovery proceedings? What mechanisms exist for innocent parties to assert their interests in assets subject to recovery claims?

Bermuda law recognises the importance of protecting the rights of third parties who may have legitimate interests in assets subject to recovery proceedings. The courts will seek to balance the claimant’s right to recover misappropriated assets against the rights of any third parties, particularly innocent parties who have acquired interests in those assets in good faith. Third parties may assert their interests through participation in the proceedings, including by applying to be joined where their rights are affected. They may also challenge interim relief, such as freezing injunctions, where such orders interfere with their legitimate interests.

18. How does your jurisdiction classify cryptocurrencies and other digital assets for civil recovery purposes? Are they capable of being held on trust or subject to proprietary or equivalent claims?

Proprietary rights will attach to a digital asset only if it is considered property under Bermuda law. Bermuda law defines property in the same way as English law, relying on the criterion in National Provincial Bank v Ainsworth [1965] 1 AC 1175 and the preceding English authorities that have followed it. As explained at 2, in June 2023, the Chief Justice of the Supreme Court of Bermuda held, in an unreported case involving BlockFi, that digital assets are capable of being treated as property under common law. The decision was made in the context of a company liquidation involving several different digital assets. The court was trying to determine whether digital assets formed part of the liquidation estate. In reaching his decision, the Chief Justice placed reliance on the High Court of Justice (England and Wales) decision in AA v Persons Unknown re: Bitcoin [2020] 4 WLR 35. In that case, the court determined that Bitcoin (and other similar cryptocurrencies) could be considered property and therefore could be the subject of a proprietary injunction.

Accordingly, where a digital asset is considered by the Bermuda courts to constitute property, claimants may obtain injunctive relief to protect their proprietary interest in such assets, including restraining a defendant from dealing with digital assets where there is evidence of a real risk of dissipation. To support such injunctions, the court may also make ancillary orders, including requiring disclosure of certain information relating to the digital asset in question, for example, access credentials, or account details held with exchanges or custodians.

We are unaware of any reported cases in Bermuda which have considered crypto assets in this context. However, in addition to the unreported case mentioned above, we expect the following English authorities concerning digital assets will also be persuasive in Bermuda:

• D’Aloia v Persons Unknown [2022] EWHC 1723: The High Court of Justice (England and Wales) permitted alternative service in a crypto fraud case, allowing documents to be served by way of non-fungible token airdrop, thereby embedding the service of the documents into the blockchain. It also highlights that as a form of property, the rules of following and tracing may be applied to cryptoassets, and that those assets may be subject to a constructive trust.
• Tulip Trading Limited v van der Laan [2023] EWCA Civ 83: the Court of Appeal (England and Wales) concluded that there was a “serious issue to be tried” in respect of whether the developers of the four major Bitcoin networks owed fiduciary duties to Bitcoin owners with the consequence that they were obliged to assist in the recovery of their property by way of introducing a software patch. The court stressed that “the internet is not a place where the law does not apply”, leaving open the possibility that new fiduciary and other legal relationships have developed alongside the development of crypto and the infrastructure around it.

19. What interim relief mechanisms exist for freezing or preserving digital assets (e.g., access to private keys, hardware wallets, exchange-held accounts)?

As above.

20. What disclosure and tracing, disclosure and investigative tools are available for identifying and following digital asset transactions, and what practical challenges arise in obtaining information from exchanges or service providers?

Bermuda courts provide a range of disclosure and investigative tools that may be deployed to identify and trace digital assets, including orders against third parties such as exchanges, custodians, or other intermediaries. Norwich Pharmacal orders can be sought in Bermuda if the court is persuaded that there is a credible arguable case of wrongdoing; the court may require third parties who have become innocently involved in the matter to disclose documents or information that could help identify the wrongdoer.  In addition, the court can compel a defendant to disclose details of their assets in aid of an injunction or freezing order.

21. How are legal costs allocated in civil asset recovery proceedings? What is the general rule on costs, and what exceptions apply?

The general rule in civil proceedings in Bermuda is that costs follow the event, such that the successful party is ordinarily entitled to recover its costs from the unsuccessful party. This principle applies equally in asset recovery proceedings and reflects the court’s broad discretion as to costs under the Rules of the Supreme Court 1985. Costs are typically assessed on a standard basis, although indemnity costs may be awarded in certain cases. For example, evidence of misconduct or dishonesty.

The court retains discretion to depart from the general rule where appropriate, taking into account the conduct of the parties, the reasonableness of the positions adopted, and the overall circumstances of the case.

22. Are third-party funding, contingency fees, conditional fee arrangements, or damages-based agreements, or other alternative funding mechanisms available? What are the rules on security for costs?

Third-party funding is generally permitted by the Bermuda courts and is increasingly used in complex commercial and asset recovery litigation. Such arrangements allow claimants to pursue claims that might otherwise be prohibitively expensive, particularly in cases involving significant investigative and cross-border costs. While Bermuda law has historically been cautious in relation to maintenance and champerty, modern practice recognises the legitimacy of properly structured funding arrangements.

There is no specific statutory regime in Bermuda for third-party funding, but parties can contract such arrangements, which will require the sanction of the court.

The Bermuda courts also have jurisdiction to order security for costs, particularly where the claimant is resident outside the jurisdiction or where there is reason to believe that the claimant may be unable to satisfy an adverse costs order.

23. How do insolvency proceedings interact with civil asset recovery actions? Can tracing or proprietary claims be pursued within insolvency, and what priority do such claims receive?

Claims for the recovery of misappropriated assets in Bermuda insolvency proceedings depend on whether the claimant can establish a proprietary interest in the assets. Where such an interest is established (for example, through tracing or the imposition of a constructive trust), the assets may be recoverable in priority and outside the insolvent estate.

These claims often intersect with insolvency avoidance and clawback provisions under Bermuda law. The Bermuda Companies Act allows for certain transactions executed by companies prior to entering into insolvency proceedings to be challenged, and, in some cases, be set aside:

• Fraudulent preference: a transaction by a company with a view to giving a creditor preference over other creditors will be void if entered into within the period of six months ending on the presentation of a petition for the winding up of the company.
• Fraudulent conveyance: a transaction by a company, entered into at an undervalue, with the dominant purpose of putting property beyond the reach of a person or class of persons who is making (or may make) a claim against the company, may be challenged and declared void if entered into up to eight years after the transaction.
• Invalid floating charge: Unless it is proved that the company was solvent immediately after the charge’s creation, a floating charge is void if it has been granted by a company within 12 months of the presentation of a petition for the winding up of the company, not including the amount of any cash paid to the company subsequently or at the time of creation of the charge in consideration for its creation.
• Invalid dispositions: any disposition of a company’s property after (1) the presentation of a petition or (2) adoption of a shareholders’ resolution for the winding up of a company, if the company is subsequently ordered to be wound up by the court, is void unless the court orders otherwise.

The interaction between proprietary claims and these statutory remedies can give rise to competing claims over the same assets, particularly where a claimant seeks to recover assets in priority to the insolvent estate made with the intent to defraud creditors. These provisions may operate in parallel with civil asset recovery claims.

Where assets have been transferred through intermediaries or corporate structures, claimants may pursue proprietary or restitutionary claims directly against those parties, while liquidators may simultaneously seek to unwind transactions for the benefit of the estate.

24. How are claims for the recovery of misappropriated assets treated in the insolvency of the wrongdoer or intermediary? What is the relationship between civil recovery and insolvency clawback or avoidance provisions?

See 23.

25. What are the key practical challenges facing practitioners in asset tracing and recovery (e.g., complex structures, offshore jurisdictions, banking secrecy, non-cooperative intermediaries)?

Asset tracing and recovery in Bermuda frequently involves complex factual and legal challenges, particularly in cases with a cross-border dimension. A primary difficulty arises from the use of layered corporate and trust structures, often spanning multiple jurisdictions, which can obscure beneficial ownership and complicate the identification of assets.

Practical challenges are also presented by the speed with which assets can be dissipated, particularly in cases involving electronic transfers or digital assets. While Bermuda courts offer robust interim relief, including freezing and disclosure orders, obtaining such relief in time to prevent dissipation remains a key concern. In addition, practitioners may encounter difficulties in securing cooperation from certain foreign intermediaries, including financial institutions or service providers located in jurisdictions with restrictive disclosure regimes or limited regulatory alignment.

26. What strategic considerations arise when choosing between different civil causes of action or pursuing parallel proceedings? Can civil proceedings be stayed pending related criminal or regulatory actions?

The Bermuda courts have discretion to stay civil proceedings where there are parallel criminal proceedings and a clear risk of prejudice can be demonstrated if the civil proceedings were to continue. However, such stays are not automatic and will depend on the specific circumstances of the case. The courts will consider the interests of justice, including the claimant’s interest in pursuing recovery without undue delay. In practice, civil and criminal proceedings may proceed in parallel, with careful management required to ensure that one does not undermine the other.

Section 25(3) of the Criminal Code Act 1907 provides that, unless expressly stated otherwise, the institution or outcome of criminal proceedings does not prejudice any civil remedies available to a person harmed by the conduct in question. By contrast, section 26 provides that where civil proceedings have already been pursued in respect of a summary offence involving property, a subsequent criminal prosecution for the same matter is precluded.

27. What significant recent cases, reforms, or emerging trends have affected asset recovery practice (including developments in sanctions regimes, beneficial ownership transparency, AML rules, or cross-border enforcement)?

A recent ruling by the Bermuda Supreme Court provides important guidance on the scope of asset preservation remedies available under Bermuda law. In proceedings brought by VCP Capital Markets LLC, the Court granted a worldwide Freezing Order against Mr Chishti following non-payment of a costs award. The Court found a real risk of dissipation based on incomplete financial disclosures, historic unpaid debts, and substantial asset transfers to Mr Chishti wife, Ms Pobereskin.

The Court reaffirmed that a real risk of dissipation (supported by objective evidence) justifies interim injunctive relief, even where assets are held offshore.

Permission was granted to serve both Ms Pobereskin and Mr Chishti outside Bermuda under Order 11 of the Rules of the Supreme Court 1985, reinforcing Bermuda’s capacity to support international enforcement. Ms Pobereskin was joined to the proceedings due to transfers totaling USD $43 million, including USD $25 million used to acquire shares in TRG Pakistan Ltd. The Court did not make a finding as to the ownership of beneficial assets at the ex parte stage, but fully recognised the potential for such a finding to be made at an inter partes hearing.

Mr Chishti was ordered to attend an oral examination to disclose his financial means, underscoring the Court’s willingness to compel transparency in aid of enforcement.

The ruling illustrates Bermuda’s robust legal framework for preserving assets pending enforcement. It also highlights the Court’s readiness to scrutinise complex asset structures and extend relief across borders

Asset recovery practice in Bermuda continues to evolve in response to developments in international regulatory standards, cross-border enforcement trends, and the increasing sophistication of financial structures. A significant driver has been the continued alignment of Bermuda’s legal and regulatory framework with global anti-money laundering and counter-terrorist financing standards, including those of the Financial Action Task Force. This has led to enhanced compliance obligations, improved record-keeping requirements, and greater transparency, all of which support asset tracing and recovery efforts.

Developments in beneficial ownership transparency have also had a material impact. Bermuda has implemented a centralised beneficial ownership register accessible to competent authorities, which facilitates the identification of ultimate ownership behind corporate structures. While not publicly accessible, this framework enhances the ability of regulators and, indirectly, litigants to obtain accurate ownership information, particularly in complex or cross-border cases.

Sanctions regimes and international enforcement measures have become increasingly relevant in asset recovery proceedings, particularly in cases involving politically exposed persons or assets linked to geopolitical developments. More broadly, there is a continued trend towards the use of coordinated, multi-jurisdictional strategies in asset recovery, reflecting the global nature of financial transactions and asset-holding structures. Bermuda courts remain well-positioned to support such efforts, given their experience in complex commercial disputes and their willingness to grant effective interim and disclosure relief in aid of both domestic and foreign proceedings.

First Published in the Legal 500: Asset Tracing and Recovery Comparative Guide, April 2026