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Cross-border insolvency

Recognition of foreign proceedings

Under what circumstances will the courts in your jurisdiction recognise the validity of foreign insolvency proceedings?

The Bermuda court will generally recognise an office holder appointed over a foreign insolvency proceeding which has interests in Bermuda. However, there is still lingering uncertainty as to the extent to which the Bermuda court has power to give judicial assistance to a foreign office holder seeking to obtain court assistance.

In accordance with the Privy Council’s decision in Singularis Holdings Ltd v PricewaterhouseCoopers (Bermuda) ([2014] UKPC 36), no inherent jurisdiction is vested in the Bermuda court to wind up a foreign company.

Winding up foreign companies

What is the extent of the courts’ powers to order the winding up of foreign companies doing business in your jurisdiction?

The Bermuda courts have no jurisdiction to wind up foreign companies.

The fact that a company is incorporated outside Bermuda but operates in Bermuda will be relevant to grant relief to an office holder seeking assistance from a foreign court to wind up the company's affairs in the jurisdiction of its incorporation or elsewhere. 

Centre of main interests

How is the centre of main interests determined in your jurisdiction?

Bermuda has not adopted the UNCITRAL Model Law on cross-border insolvency and is unlikely to do so. The concept of ‘centre of main interests’ is not one which has direct application to Bermuda insolvency proceedings.

Cross-border cooperation

What is the general approach of the courts in your jurisdiction to cooperating with foreign courts in managing cross-border insolvencies?

In general, the Bermuda court is open to cooperate with foreign courts in cross-border insolvencies. While jurisdictional limits have been imposed on the court’s ability to cooperate (see Singularis Holdings Ltd v PricewaterhouseCoopers (Bermuda) ([2014] UKPC 36)), it is likely that the judicial attitude will remain flexible and cooperative as far as possible. The court recently proposed a draft protocol for communication and cooperation between courts in cross-border insolvency matters which will likely be implemented during 2017. 

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