The Danger of Striking Blindly: Bermuda Court Rejects Strike-Out Application and Denies Arbitral Stay in Valuation Dispute

Walkers Bermuda, acting for a former shareholder of Meritus Trust Company Limited (the “Defendant Company”), successfully defended an application brought by the Defendant Company to strike out the Statement of Claim or, alternatively, to stay the proceedings in favour of arbitration.

The Supreme Court of Bermuda (the “Court”) ruled in the former shareholder’s favour, dismissing the Defendant Company’s application in its entirety and ordering it to pay the former shareholder’s costs.

Acting Justice Attride-Stirling’s judgment1 provides a helpful analysis of the factors which will be taken into account by the Court in exercising its jurisdiction to strike out a pleading pursuant to Order 18, Rule 19 of the Rules of the Supreme Court 1985 (the “RSC”). Attride-Stirling AJ’s examination of the circumstances in which the Court will deem a litigant to have taken a “step” in proceedings, thereby depriving it of its right to seek an arbitral stay, is also instructive, as is the analysis of the circumstances in which a party may seek to challenge a valuation, notwithstanding an agreement to be bound by it.

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Kevin TaylorManaging PartnerT +1 441 242
Benjamin McCoskerSenior AssociateT +1 441 242