Bermuda court hears Swiss law evidence to decide discovery application

12/02/20

The Chief Justice of the Supreme Court of Bermuda has unusually heard cross-examination on Swiss law in order to determine a discovery application.

This arose in Bidzina Ivanishvilli v Credit Suisse Life (Bermuda) Ltd. Two unit-linked life insurance policies to the value of US$755m were issued by Credit Suisse Life (Bermuda) (“CS Life”) to trusts of which the first plaintiff, a former prime minister of Georgia, and his family were the beneficiaries. The policy assets were invested with Credit Suisse AG (“the Bank”) in Switzerland in the name of CS Life.  The account manager at the Bank, Patrice Lescaudron, was subsequently found guilty of fraud and sentenced to a lengthy term of imprisonment. The assets in the portfolio decreased by about US$400m and the plaintiffs brought proceedings against CS Life for breach of duty.

CS Life claimed that the majority of the relevant documents were in the hands of the Bank in Switzerland and that under Swiss law they had no right to obtain them from the Bank. The plaintiffs contended that in relation at least to most of the relevant documents, CS Life could access them without requiring separate consent from the Bank, and to the extent that there were documents to which they did not have an immediate right of access, they had a right of access because the Bank was required to provide them under Swiss law.

The Bermuda courts use a modified version of the RSC. The issues before the court thus involved whether and to what extent CS Life had a “legally enforceable right” of access to the required documents under Bermudian law (see Lonrho v Shell  Petroleum 1980 1WLR 627) and whether they had a right of access under Article 400 of the Swiss Code of Obligations.

As the Swiss law experts fundamentally disagreed as to the scope of Article 400, the Bermuda court agreed to hear cross-examination of experts in order to resolve the application. There does not seem to be any reported instance where any court has previously heard cross-examination of foreign law experts for the purpose of determining a discovery application. 

In the event, Hargun CJ held, accepting the evidence of the plaintiffs’ expert, that Article 400 required the agent (the Bank) to provide to its principal (here CS Life) any documents which were relevant to assist the principal in determining whether the agent has fulfilled his mandate, and made an order accordingly.

The judgment is here. The annex is here.