Inherent jurisdiction permits Bermuda court to make wide disclosure orders

07/10/20

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.

In the light of unsatisfactory discovery given by CS Life, the plaintiffs were granted by Hargun CJ wide ranging orders requiring CS Life to provide detailed information about the details of the extent of their searches and the discovery exercise carried out. CS Life appealed, contending that the Bermuda court had no power to make such orders. They contended that there was no authority in Bermuda which justified the making of such orders. Bermuda continues to use rules based on the RSC in civil proceedings, and the powers provided under RSC o24 to make specific discovery orders are very limited. CS Life argued that the powers of the court were merely those set out in o24.

The Bermuda Court of Appeal (Sir Christopher Clarke P, Gloster and Smellie JA) dismissed CS’ Life’s appeal (save for a short separate point on waiver of privilege). In her judgment Gloster JA relied on Al Rawi v Security Service [2012] 1 AC 531 as authority for the court’s inherent power to introduce procedural innovations in the interests of justice, as exemplified by freezing injunctions and search orders and the public interest immunity procedure. She also relied upon authority to similar effect from the Eastern Caribbean Supreme Court as well as the English courts.

The judgment is here.