Credit Suisse Life (Bermuda) Ltd v Bidzina Ivanishvili and 6 others (Bermuda)

An insurer that promises to invest policy assets according to the policyholder’s chosen mandate is responsible for that investment duty, even where asset management is delegated to a related bank. Damages should approximate the position that competent discretionary management would have produced, not merely replace transactions identified as objectionable.

The duty arises from the policy’s effective date. Losses caused by unauthorised pre-commencement transactions may nevertheless be included. Mitigation and causation are aspects of one causation principle, and the defendant bears the burden of pleading and proving a break in causation. A claim in deceit does not require conscious awareness of the representation, although reliance on an ambiguous representation requires understanding its intended meaning. In foreign tort claims, the domestic law of the place of the tort applies under the double-actionability rule; renvoi is unavailable.

The proceedings concerned two life portfolio international policies issued by Credit Suisse Life (Bermuda) Ltd to companies connected with Bidzina Ivanishvili’s family trusts. The policy assets were fraudulently mismanaged by a relationship manager employed by the Bank.

The Chief Justice found breaches of contractual and fiduciary duties and awarded damages. The Court of Appeal upheld the contractual and fiduciary claims but rejected the fraudulent misrepresentation claim: [2022] SC (Bda) 19 Civ; [2023] CA (Bda) 13 Civ. The appeal concerned the investment duty, damages and causation. The cross-appeal concerned deceit, Georgian limitation law, renvoi and amendment after expiry of the limitation period.

1. Appeal. The appeal was allowed only as to the start dates for damages. The policies imposed on CS Life an obligation to invest the policy assets according to the investment alternative chosen by the policyholder. The internal fund was the segregated portfolio owned by CS Life; the Bank managed assets for CS Life, rather than assuming the investment obligation itself. The oral choice of discretionary management was effective because the Bank and its employee were acting for CS Life. The later signed forms were facilitative and did not revoke that choice.
2. Damages. A whole-portfolio model based on professional discretionary management was a legitimate and more appropriate approximation than a model replacing only transactions identified as objectionable. The contractual investment duty arose when each policy became effective, not when premium funds were first received. Damages were therefore to be recalculated from 31 October 2011 and 30 November 2012 respectively. Any loss caused by unauthorised transactions before commencement was to be added to the asset value at the relevant start date.
3. Causation and mitigation. The reasoning in Koch Marine Inc v d’Amica Societa di Navigazione ARL (The Elena d’Amico) [1980] 1 Lloyd’s Rep 75 was applied. Mitigation and a new intervening act are aspects of the wider causation principle. The burden of pleading and proving either defence rested on CS Life. There was no basis for ending the damages period in August 2017 because CS Life had not shown that the plaintiffs knew the assets were not being professionally managed.
4. Cross-appeal. Under the law of deceit, a representation may arise from words or conduct, and the claimant need not have consciously noticed or understood that a representation was being made. Reliance may operate through an unconscious assumption. The Court of Appeal was wrong on that issue. However, the misrepresentation occurred in Georgia, the Georgian limitation period applied under section 34A of the Limitation Act 1984, and the claim was time-barred. Renvoi does not apply to tort claims. The proposed amendment also failed the “same or substantially the same facts” test because the essential facts of contract and deceit were different and had to be compared from the pleadings.
5. The Board advised that the appeal be allowed to the limited extent stated above and that the cross-appeal be dismissed.

1. Privy Council: the appeal was allowed only to vary the damages start dates, and the cross-appeal was dismissed: [2025] UKPC 53.
2. Court of Appeal for Bermuda: the contractual and fiduciary claims were upheld, but the fraudulent misrepresentation claim was rejected: [2023] CA (Bda) 13 Civ.
3. Supreme Court of Bermuda: the plaintiffs succeeded on the contractual, fiduciary and fraudulent misrepresentation claims and were awarded damages: [2022] SC (Bda) 19 Civ.