Bermuda: Litigation 2026

Section A: Restructuring and Insolvency

Despite its small jurisdiction, Bermuda continues to prove itself as a reliable destination for restructuring, maintaining a sophisticated and diligent approach to corporate structure and regulation. Recent years have seen growing restructuring activity, as well as a number of key developments in case law and market trends worth noting.

Legal framework

Bermuda’s insolvency law framework consists of statute and common law. The principal statutory provisions governing corporate insolvency and restructuring are contained in Part XIII of the Companies Act 1981 (Companies Act) and are supported by the Companies (Winding-Up) Rules 1982 (Winding-Up Rules). The Companies Act is based on the English Companies Act 1948 and the Companies Winding-Up Rules are based on the English Companies (Winding-Up) Rules 1949.

No substantive changes have been made to Part XIII of the Companies Act and the Winding-Up Rules since they were enacted, although there have been minor amendments introduced pursuant to the Companies (Winding-Up) Amendment Rules 2020. These provisions include:

• allowing creditors to access court files;
• imposing a requirement that at least one Joint Provisional Liquidator (JPL) be Bermuda-resident; and
• the introduction of other modernisation steps.

A key element of the Bermuda insolvency landscape is the willingness of the Bermuda court to work in tandem with, and to assist, foreign courts and Bermuda companies with interests in other jurisdictions where there is a substantial international creditor or asset base.

Market trends

Rising restructuring and insolvency activity

There is a noticeable rise in formal enforcement and insolvency actions in Bermuda, with between 15 and 30 winding-up petitions per year, of which around a third convert into an order for the winding up of the company or the appointment of JPLs.

A recent trend is a recognition by stakeholders that a scheme of arrangement is not the only means by which restructuring transactions can be effected in Bermuda. Provisional liquidators may use their powers, or powers exercisable with the sanction of the court, to enter into a transaction without a scheme. This may be a more appropriate course of action when, for instance, all counterparties to a transaction and all stakeholders with an economic interest in the company consent to it. Under these circumstances, there is no need for a scheme to bind dissenting members of any class.

Take, for example, the high-profile case of Chishti v Afiniti Ltd [2025] SC (Bda) 33 Civ. In this case, the evidence demonstrated that Afiniti Ltd would collapse if a restructuring were not achieved before the company’s cash resources ran out. Rather than a proposing a scheme of arrangement, the JPLs successfully obtained orders from the Bermuda Supreme Court under sections 175 (1) (e) and 175 (2) (a) of the Companies Act to exercise their powers of compromise, or as applicable, sale to implement a restructuring transaction whereby effectively the whole of the assets and undertaking of the company were to be transferred and/or sold to a new company ultimately owned and controlled by the secured lenders.

Evolving regulatory enforcement

The Court has considered and determined an increasing number of petitions presented by regulators, which enhances Bermuda’s reputation as a well-regulated financial jurisdiction.

The Bermuda Monetary Authority (the Authority) has increasingly been using restructuring and insolvency proceedings as a means to encourage compliance with relevant laws and regulations. This follows the completion of an initial Section 30 investigation, which allows the Authority to investigate potential violations of the Insurance Act of 1978.

A recent example of this was Inthe Matter of White Rock Insurance (SAC) Limited [2023] SC (Bda) 261 Civ, in which the Authority presented a winding up petition of White Rock Insurance (SAC) Limited. The Authority subsequently made an application to withdraw the petition following certain developments following its presentation, leading it to form the view that winding up the company was no longer in the public interest. The Court accepted the Authority’s application, thus emphasising its primary role in upholding the reputation and integrity of Bermuda’s insurance market.

Creditors’ first mover advantage

A recurring theme is that Creditors recognise that financially distressed businesses often face multiple enforcement actions. This can lead to a perception of a ‘first-mover’ advantage, as the creditor initiating a petition may have greater control over the timing and early stages of the insolvency process compared to other creditors.

Segregated accounts

Because Bermuda hosts a large number of insurers/reinsurers and segregated accounts companies, insolvency and restructuring issues in that sector are especially salient. In January 2025, the Authority’s guidance note entitled “General Business Insurers with Segregated Accounts and Separate Accounts” came into effect, which provides the insurance industry with clarity on the regulatory regime and requirements for Bermuda insurers using segregated accounts and separate accounts (SAC Insurers). If SAC insurers fail to comply with this enhanced regulatory regime, they risk being subjected to Section 30 Investigations and restructuring/insolvency proceedings.

Proposals

There are proposals to create a new restructuring process involving the appointment of a ‘court-appointed restructuring officer’. While there would be considerable overlap between the roles of a court-appointed restructuring officer and a provisional liquidator, there would be greater emphasis on restructuring, clear criteria for appointment, and prompt reporting on the feasibility of a restructuring proposal.

There are also proposals to reduce the threshold for approval of a scheme of arrangement from 75% of each class to 66% of each class.

The time frame for the introduction of these reforms is, at present, uncertain.

Looking ahead

The increase in debt restructuring activity, both in and out of court, reflects creditors’ continuing belief that rescue procedures can preserve value and demonstrates their confidence in Bermuda as a restructuring destination.

Considering Bermuda’s well-established position as an international financial centre and a preferred place of incorporation for multinational corporations, the identified trends are likely to persist well into the foreseeable future and Bermuda will continue to be an active jurisdiction for rescue, restructuring, and insolvency proceedings.

Section B: Commercial

Bermuda has recently seen significant developments in shareholder appraisal proceedings, which are brought when a shareholder is not satisfied with the price offered for their shares in an amalgamation or merger. The directors of each amalgamating company must submit an amalgamation agreement for approval at a shareholder meeting. The notice of meeting must state the fair value of the shares as determined by the company and that a dissenting shareholder is entitled to be paid the fair value of their shares. The amalgamation must be approved by 75% of shareholders, subject to the byelaws of the company. Shareholders who did not vote in favour of the amalgamation, and who were not satisfied with the offer price, may apply to court to appraise the fair value of their shares.

The Jardine Appeals

In July 2025, Bermuda’s final appeals court, the Privy Council in London, delivered two judgments arising from a dispute following the amalgamation of Jardine Strategic Limited (Jardine) and JMH Bermuda Ltd. As part of the amalgamation, Jardine offered shareholders USD33 per share. Over 80 shareholders considered that too low and commenced appraisal proceedings under section 106 of Bermuda’s Companies Act 1981.

The first judgment of the Privy Council – Jardine Strategic Limited v Oasis Investments II Master Fund Ltd et al (No 1) [2025] UKPC 33 – concerned Jardine’s application for summary judgment against the dissenting shareholders who acquired their shares after an announcement of the proposed amalgamation and before the shareholder meeting approving the amalgamation. Jardine argued that section 106 is intended to protect only long-term shareholders, ie, those who acquired shares before the announcement. The Privy Council disagreed, however, finding that the right to bring appraisal proceedings is available to all those who hold shares at the date of the shareholder meeting and that fair value is to be determined objectively, without reference to the motives of the acquiring shareholders.

The Privy Council’s second judgment – Jardine Strategic Limited v Oasis Investments II Master Fund Ltd et al (No 2) [2025] UKPC 34 – concerned the dissenting shareholders’ application for Jardine to disclose legal advice it received in valuing the shares. The dissenting shareholders contended that they were entitled to see the legal advice obtained by Jardine, relying on the “shareholder rule”, which has historically prevented companies from asserting legal advice privilege against their own shareholders. The ‘shareholder rule’ has been applied in England and Wales, as well as other common law jurisdictions, for over 140 years.

The disclosure judgment represents a landmark decision, as the Privy Council abolished the shareholder rule (and refused to order disclosure of the legal advice). The Privy Council found that dissenting shareholders could not claim a proprietary interest in the legal advice, as the advice belonged to Jardine as a distinct legal entity separate from its shareholders.

Moreover, the Privy Council found that there was no ‘joint interest’ between Jardine and the shareholders in respect of Jardine’s valuation of the shares, and therefore the shareholders had no joint interest in receiving copies of the advice.

The Glendina Case

In February 2025, the Bermuda Supreme Court delivered judgment in Glendina Pty Limited et al v NKWE Platinum Ltd (2025) SC (Bda) 15 Civ. Glendina was concerned about whether dissenting shareholders received fair value for their shares in a Bermuda company whose main asset was a mine in South Africa. The Judge hearing the case, Justice Martin, awarded the dissenting shareholders a 30% uplift on the offer price. His judgment clarifies several important aspects of the law, including the following:

Where independent directors have been appointed to assess fair value, they must ensure the offer price reflects what they independently consider to represent fair value. Furthermore, it would be prudent for independent directors to take independent advice regarding their duties under Bermuda law, as well as independent financial advice, to assist them in reviewing the valuation materials provided by the company.

If the court finds that shareholders were paid less than fair value, they are entitled to receive simple interest at a rate of 3.5% per annum from the date of the amalgamation until payment is made. This is because the appraisal process results in a judgment debt, which is subject to the statutory interest rate that applies to such debts.

Section C: Trust and Estates

Amendments to trust legislation

Bermuda has introduced significant amendments to the Trustee Act 1975 making it clear that when considering the exercise of powers of investment, trustees may take into account not only financial returns but also the views of settlors and beneficiaries on the broader impact of the trust’s investments on society, the environment, or otherwise, as well as other material factors that might affect financial performance.

The amendments to the trust legislation enacted by the Trustee Amendment Act 2025 (which came into force on 10 October 2025) provide important benefits for aligning trust administration with family legacy and succession planning. Alongside the amendment to the trust legislation, Bermuda has enacted the Benefit Entities Act 2025, which provides an optional framework for companies, LLCs, and limited partnerships to formally embed public benefits into their governance and decision-making. This new type of business can be created or converted from existing entities to pursue both profit and positive social or environmental impacts. The Benefit Entities Act 2025 is expected to be implemented before the end of 2025.

Compliance with the Personal Information Protection Act 2016 (PIPA) for trustees

PIPA, Bermuda’s data protection legislation, applies to all organisations that use personal data in Bermuda. These three terms – organisations, use and personal information – are defined in PIPA. It came into force on 1 January 2025 and is Bermuda’s equivalent of the UK’s Data Protection Act 1998 and the EU’s General Data Protection Regulations (EU) 2016/679 (GDPR).

In the context of trust structures, “organisations” may include individual trustees, private trust companies, regulated local trust companies, underlying holding companies and protectors, each of which must, for example, have a privacy officer. However, a common privacy officer may be used where more than one organisation is under common ownership or control.

An important point to note about PIPA is that it is not possible to “contract out” of it, ie, for trustees to ask individuals about whom personal information may be held to waive their PIPA rights. Trustees may consider whether any trust terms limiting disclosure to beneficiaries are inconsistent with PIPA.

Compliance with PIPA for trustees will typically involve, among other things:

• appointing a privacy officer/considering whether someone from a service provider can be nominated for this role;
• formulating PIPA policies and procedures and considering the collection and use of personal information;
• considering the integrity and retention of personal information, ie, ensuring that information held is accurate and not kept for longer than can be justified;
• considering requests for disclosure, rectification, blocking, erasure and destruction of information pursuant to PIPA (the interaction of disclosure rights under PIPA with the quite limited disclosure rights under general trust law principles might prove challenging);
• ensuring robust data security measures are in place;
• considering contracts with service providers in terms of their responsibilities in relation to personal information, especially if they are an “overseas third party” subject to special provisions under PIPA;
• taking special care of sensitive personal information, such as information on family life or health; and
• taking appropriate action in the event of security breaches — this may involve reporting to the Privacy Commissioner and affected individuals (breach of PIPA is a serious matter, as it can be a criminal offence, so trustees must get to grips with these issues as they apply to individual trust structures).

Case law update

There are two important cases in Bermuda involving the Privy Council. One case has been heard, with judgment pending. The other case is set to be heard in November.

The case is referred to as the “X Trusts” case. Several trusts include provisions that require a protector’s consent for certain powers of the trustees. An issue emerged as to the correct interpretation of the consent powers, and whether, in exercising those powers:

• the protector had to exercise an independent discretion as to the proposed exercise of power by the trustee, so that a protector might withhold consent even if the proposed exercise of power was one which a reasonable body of informed trustees was entitled to decide upon (the “wider role”); or
• to satisfy themselves that the proposed exercise of power by the trustee was one which a reasonable body of informed trustees is entitled to take and, if so, provide consent (the “narrow role”).

The Supreme Court of Bermuda held that trust protectors have a narrow role, and the Court of Appeal agreed with this view. The Privy Council will hear the appeal in late November 2025, and the result is eagerly awaited by both the legal and trust industries.

The second case is Credit Suisse Life (Bermuda) Ltd v Ivanishvili and others. Starting in 2005, a wealthy businessman (Mr Ivanishvili) made significant investments through various investment companies that were part of a trust structure set up for his and his family’s benefit. An employee of Credit Suisse, who served as Mr Ivanishvili’s relationship manager, was convicted in Switzerland of fraud involving Mr Ivanishvili’s accounts. Subsequently, Mr Ivanishvili filed a lawsuit against Credit Suisse to recover the lost funds.

At trial, the Ivanishvili parties obtained judgment against Credit Suisse for USD607 million on claims for breach of contract, breach of fiduciary duty, and fraudulent misrepresentation; the Court of Appeal upheld the breach of contract and breach of fiduciary duty claims. Credit Suisse appealed to the Privy Council on the ground that the judgment on the contractual claims is inconsistent with the contractual documentation, and there is no scope for any fiduciary duties.

The appeal to the Privy Council was heard in June 2025, and judgment is awaited.

In January 2025, one of the world’s longest-running and highest-value private wealth disputes was back before the Court of Appeal (Wong v Grand View Private Trust Company Ltd and others) to hear arguments on issues including:

• whether mixed charitable and non-charitable purposes trusts are void for uncertainty;
• whether the transfer of assets into purpose trusts was invalid because the transfers were governed by BVI law, which requires such transfers to be in writing;
• regarding the validity of certain transfers into purpose trusts, what was the relevant law governing mistake and/or lack of authority under the laws of Bermuda, BVI, and Taiwan.

Judgment is anticipated shortly.

Section D: Regulatory

Bermuda’s robust business environment and financial services sector is regulated by equally robust statutory regimes that are actively enforced by a number of regulators, including:

• the Bermuda Monetary Authority (Authority);
• the Registrar of Companies (ROC); and
• the National Anti-Money Laundering Committee (NAMLC).

Recent court proceedings concerning digital asset businesses have clarified a number of important issues, including: the treatment of digital assets in the context of the winding-up of a digital asset business; and the nature of the Authority’s role when enforcing digital assets legislation (i.e. whether the Authority is an adjudicating authority).

In Re Bittrex Global (Bermuda) Ltd (in Liquidation), the Court addressed how digital assets should be treated in a winding up, ruling against an application by joint provisional liquidators to sanction an interim distribution to shareholders. The Court confirmed that assets must be held and dealt with in accordance with the Digital Asset Business Act 2018 (DABA) and any Authority codes/guidance. This decision is important because the Fintech and DABA business sector is constantly evolving, and judicial guidance on the treatment of digital assets in a winding-up context will assist companies considering options, such as winding-up or enforcement by way of winding-up.

In Lai and others v Bermuda Monetary Authority and Minister of Finance, the Court addressed a key issue: the Authority does not function as an “adjudicative authority” when it issues decision notices confirming its enforcement actions under DABA requirements. The Court clarified that the Authority acts as a regulator and does not determine civil rights. Instead, the powers to adjudicate and appeal rest with the statutory tribunal established under the DABA legislation. This decision will assist the regulator, companies, and practitioners in navigating the Authority’s enforcement framework in the future, not only with respect to DABA but also across other regulated sectors.

In addition to court proceedings, the Authority has been generally active in enforcement across multiple sectors, including:

• prohibition orders against individuals;
• winding-up petitions concerning investment funds;
• substantial civil penalties; and
• cancellations and revocations of licenses in relation to insurance companies and corporate service companies for breaches of governance/prudential requirements and issues concerning capital requirements.

On the Proceeds of Crime (POCA) front, amendments to the legislation have been passed that update the legislative framework, enhancing both:

• the scope of suspicious activity reporting; and
• the supervisory tools available to the regulator.

Early drafts of the proposed legislative amendments suggested that appeals of Authority enforcement decisions concerning POCA would be heard in the Bermuda Supreme Court, rather than the Proceeds of Crime Appeals Tribunal; however, those proposals were not pursued and appeals remain governed by the statutory tribunal process.

Bermuda’s Corporate Income Tax Act 2023 (CITA) regime became effective in January 2025. Although there have not been any significant disputes regarding its implementation so far, we are closely monitoring the situation and collaborating with clients. Initial challenges, often experienced with new tax and regulatory regimes, are to be expected.

Generally, regulators in Bermuda have been very active and activity levels, especially with respect to enforcement action, are trending upwards. Bermuda is a jurisdiction that takes its international reputation very seriously and, as the regulatory environment continues to evolve (eg, with the implementation of new regimes like CITA), regulators will likely exercise close scrutiny to ensure entities comply with their respective obligations.

The level of scrutiny Bermuda entities will face in the near future is likely to increase in any event with the upcoming Financial Action Task Force (FATF) mutual evaluation of Bermuda, due to commence in October 2026. FATF evaluations test how well Bermuda is implementing the FATF’s updated standards on money laundering and financial crime. In practice, spikes in regulatory activity have been seen in the months prior to such assessments, and it is expected that this trend will continue in the coming 12 months.

Summary

• The Bermuda Courts have been active, providing helpful guidance on DABA-related issues and adjudicating other enforcement-related matters.
• The new CITA regime and updates to the POCA legislative framework demonstrate Bermuda’s commitment to enhancing the regulatory environment.
• Regulatory enforcement actions and related litigation are expected to continue the upward trend seen in practice over the past three to five years.

First Published in Chambers and Partners – Trends & Developments – December 2025