Mello Jones & Martin · Barristers and Attorneys

International Arbitration in Bermuda

David John Addington · September 1st, 2005

In considering the applicable substantive law, reference should be had to the following:

  1. The Arbitration Act 1986
  2. The Bermuda International Conciliation and Arbitration Act 1993
  3. Relevant provisions in the Electronics Transactions Act 1999
  4. The Enforcement of Foreign Judgments and Arbitral Awards

The Bermuda International Conciliation and Arbitration Act 1993 ("Bermuda Arbitration Act") is modelled on the United Nations "UNCITRAL Model Law on International Commercial Arbitration". The latter is set forth in Schedule 2 to the Bermuda Arbitration Act. This is a system to adjudicate disputes readily understood by international users of arbitration and the Model Law has been adopted by over 50 jurisdictions around the world. This means that the Model Law is more likely to be familiar to the potential user than any particular arbitral system or, indeed, judicial process.

The 1993 Act seeks to promote confidentiality in proceedings in a convenient, neutral setting on an island which may be easily reached from the United States of America, Canada and England amongst other places; convenient that is, for any dispute involving parties from either side of the Atlantic ocean.

In brief, the impact of the Bermuda Arbitration Act is as follows:

  1. Parties to contracts can mutually agree to arbitrate in Bermuda, even if their contracts do not provide for arbitration or name another site for arbitration. The parties are allowed to agree the procedure to be followed by the arbitral tribunal. Should a party wish to object to the jurisdiction of the arbitral tribunal, the Model Law provides that the objection must be made to the tribunal itself no later than the submission of the Statement of Defence.
  2. Even if the contracts do provide for arbitration in Bermuda, the parties can contract out of the Bermuda Arbitration Act and be subject instead to the earlier Arbitration Act 1986.
  3. Bermuda is a party to the United Nations Convention on the Reciprocal Enforcement of Arbitral Awards 1958 ("New York Convention") so that a Bermuda Arbitration award is enforceable without a review of the merits in over eighty countries around the world (as to which, the reader is referred to the article on enforcement published by the writer). The 1993 Act expressly deals with the jurisdiction of the arbitral tribunal to award interest.
  4. Bermuda eases its normal Immigration Rules in relation to international commercial arbitrations to enable foreign lawyers and support staff to work at international arbitration hearings without the need for Work Permits. There is an international arbitration centre close to Hamilton which has good facilities including a global video link. Alternatively, Mello Jones & Martin can provide facilities and in conjunction with local hotels. Communications and air lift are good.
  5. The parties may be represented by the legal or other representative of their choice without any regulatory impediments whatsoever.
  6. The Supreme Court of Bermuda is nominated as the sole and final appellate court in respect of appointment of arbitrators, the challenge of arbitrators, and the jurisdiction of an arbitral tribunal.
  7. The Court of Appeal is nominated as the sole and final court of recourse (application to set aside an arbitration award) on the narrow grounds permitted by Article 34 (2) of the Model Law. Briefly stated, this is "Recourse to a court against an arbitral award may be made only in accordance with paragraphs (2) and (3) of this Article." These grounds would include, by way of example, incapacity, failure of notice, a decision on matters not submitted to the arbitration and the composition of the tribunal. There is a 3 months period in which to make such an application. In all cases (whether under the 1986 or 1993 Acts) if the parties wish, they may agree to exclude the Appellate jurisdiction altogether and make the award of the Arbitrator final and binding and not subject to any appeal.
  8. In fact, the Model Law provides that there is no right of appeal from an Award of an arbitrator. This promotes finality of the arbitral process to the extent that no court shall intervene save as far as the Model Law provides. The position is different under the 1986 Act, which the parties can always agree to adopt at the outset in preference to the procedure under the 1993 Act and the Model Law (as to which see (b) above).
  9. No participant in an international commercial arbitration in Bermuda shall be liable to service of process on any civil matter relating to the dispute in question while in Bermuda for the purposes of the arbitration.
  10. Court proceedings may be heard in Chambers and the Court may give special directions in relation to the publicity given to any Court proceedings under the Act.

Please refer to the writer for a more detailed explanation of UNCITRAL or if we can provide you with any assistance, whether by advising, making arrangements for an arbitration, representation, the drafting of tailor-made arbitration clauses and so forth.