Fielding questions posed by the in-house counsel of a Bermuda reinsurer, the team at Cox Hallett Wilkinson outlines its strengths in the ﬁelds of arbitration and law suits, M&A and corporate governance.
Arbitration and law suits
How much experience do you have in providing counsel— both at arbitrations and in court—for a re/insurance company?
David Kessaram: Most of our work in connection with insurance and reinsurance disputes has been litigation in the courts—assisting parties to abide by insurance arbitration clauses and reinsurance and insurance contracts. Usually, this takes the form of an anti-suit injunction to prevent the opposite party continuing or commencing litigation when there’s an alternative dispute resolution provision in the contract that allows for arbitration. In one case, a party to a reinsurance contract had commenced proceedings in California against a Bermuda reinsurer, and we were involved in attempts to injunct the party from continuing with Californian proceedings.
There is also a role for Bermuda courts in assisting parties to resolve disputes that arrive in conjunction with arbitration clauses, and we’ve been involved in that sort of dispute too—for example, where parties can’t agree on the identity of the arbitrator, the Bermuda courts can make that determination.
Likewise, there are cases where one party asserts that the contract containing the arbitration clause is void or unenforceable for various reasons—for example because of misrepresentation. They may then commence proceedings in Bermuda to obtain a declaration that the contract is void. Under our legislation, the arbitration tribunal has the power to make a determination on that issue as well, so we get involved as litigators in trying to stop the court proceedings and have the matter referred back to the arbitrators for a decision.
What skills and experience do you bring to arbitration?
Kessaram: My experience in litigation goes back to 1986. Mostly, it’s commercial and corporate litigation and I have around 15 to 20 years of arbitration experience, working with both model law and under the Domestic Arbitration Act we’ve had since 1986.
I’m also a fellow of the Chartered Institute of Arbitrators. I’m one of two partners in the litigation department to have that qualiﬁcation and we also have a very competent and experienced team of commercial litigators. We’ve handled some weighty cases and I feel conﬁdent that we are able to deal with signiﬁcant insurance and reinsurance disputes.
Can you tell me about your experience in Bermuda and cross-border M&A?
Ernest Morrison: As a ﬁrm, we’ve been involved in just about every type of cross-border M&A: we have an international client base so when they’re involved in M&A, it is cross-border by deﬁnition.
In the insurance industry, we’ve been involved in the majority of the big ticket M&A events in Bermuda including Omega, which we’re still heavily involved with. We’ve been involved in all of their attempts to be sold since and also advised Transatlantic Holdings in the ﬁght to acquire that entity. And as well as advising the parties, shareholders, lenders and the like on a number of M&A matters, we also provide general corporate advice to vendors, syndicates and a variety of acquisition vehicles.
The economic situation hasn’t reduced the intensity of this business, so the extent, depth and variety of our experience continue to grow. There are some gaps between events now, but that’s a welcome bit of breathing space.
"In the insurance industry, we've been involved in the majority of the big ticket M&A events in Bermuda including Omega, which we're stil heavily involved with."
Jonathan Betts: In Bermuda, there are various ways to acquire a company—you have the amalgamation process, which is a well-trodden path, and tender offers, but we now have merger provisions, which gives potential acquirers yet another option. One area I’ve been extensively involved in, for example, is the acquisition of listed vehicles by way of schemes of arrangement. The fact that there are so many ways to acquire companies both in part and in totality is driving M&A activity, and while the market has been slower globally, it’s maintained a steady momentum in Bermuda.
How long have you worked in M&A?
Morrison: I came back to Bermuda in 1986 and I don’t think my feet have touched the ground since.
Betts: I’ve been working in M&A since 2000. I was originally a corporate banking and ﬁnance lawyer, then moved into M&A while in the UK. I’ve been in Bermuda since 2004 and with the rest of the team we’ve been involved in a lot of M&A transactions.
What particular skills can CHW offer clients in M&A?
Morrison: Aside from our experience, it’s our approach. We act as a team and rely on the full breadth of talent and experience of our team members. And where necessary, we have at least one of our commercial litigators on call or involved, depending on the issues which may arise on the deal.
We’re not as big as our principal competitors, but we believe that we can provide a service that is comparable without sacriﬁcing the advantages generated by our approach.
Betts: We’re a relatively small team, but we work closely and have a broad skill base which we bring together very well. We’re dealing with multinational clients and they expect high quality and quick turnarounds, and that’s what we deliver. Because we’ve demonstrated what we can do, clients keep on coming.
What experience do you have of providing corporate governance best practice to clients?
Morrison: As a consequence of our growing client base, we often ﬁnd ourselves being asked to advise on a number of areas associated with corporate governance. We’re asked to advise independent board members and whole boards on their obligations generally, in relation to particular issues and contracts and with respect to Bermuda case law. In insurance, we advise on the growing number of regulations introduced through the Bermuda Monetary Authority (BMA) to keep the Island equivalent to the forthcoming Solvency II regulations, and that has led to the implementation of a Code of Conduct that applies across the board to the entire Bermuda insurance population. We’ve also been making sure our captive base fully understands what it means, what its implications are and how it should be implemented.
Our ﬁnancial institution clients, such as trust companies and investment houses, are also subject to increasing regulation, and we’re increasingly ﬁnding ourselves advising client boards with respect to their obligations on employee discipline issues. Our exposure on the corporate side means we’ve become more of an expert than we bargained for, but it’s a very interesting part of the business.
Bermuda was not previously a heavily regulated jurisdiction, but it always maintained a good reputation—increased regulation has been introduced to supplement this, and when the International Monetary Fund and the Organisation for Economic Co-operation and Development say you have to get your teeth around things, the lawyers get involved. Mostly, our job is to educate.
Betts: We have a lot of listed clients: in Toronto, on the New York Stock Exchange, London Stock Exchange, in Hong Kong and Singapore, and there is a lot of corporate governance that comes with that. Clients are advised on the exchange requirements by their local lawyers, but the increased transparency requirements mean that companies are looking to us for Bermuda corporate governance advice. As clients get bigger (and, in some cases, listed on stock exchanges) the issues become more complex, and it becomes increasingly important to engage Bermuda counsel.
Morrison: There is increasing demand for corporate governance advice and the book is never getting smaller.
Ernest Morrison is director and head of the corporate and commercial department at CHW. He can be contacted at: firstname.lastname@example.org
Jonathan Betts is senior associate at CHW. He can be contacted at: email@example.com
David Kessaram is managing director and head of the litigation department at CHW. He can be contacted at: firstname.lastname@example.org
Cox Hallett Wilkinson, legal services, Bermuda, arbitration, M&A