Dec 2025
Bermuda appraisal proceedings are treated as a quasi‑inquisitorial process. The Court must appraise “fair value” and ensure that the valuation experts and the Court have all relevant material. In practice, this produces a robust discovery regime with the company bearing the primary burden to give wide, early disclosure of valuation‑relevant information, tempered by proportionality and case‑management controls. Dissenters also have discovery obligations, but these are more limited. The courts have also addressed difficult issues around documents of subsidiaries, privilege, electronic communications and third‑party materials.
This article is the third in our series on Bermuda appraisal proceedings, following our earlier publication on The Duties of Independent Directors in Amalgamations and Mergers.
Core Principles that Guide Discovery
The Court’s statutory duty to appraise fair value drives a disclosure model that aims to put before the Court all information relevant (and, where appropriate, potentially relevant) to valuation, recognising that most of that information resides with the company and its advisers. Recent authorities include the directions rulings in Jardine Strategic Holdings Limited [2021] SC (Bda) 87 Com APS/Alpine v Myovant [2023] SC (Bda) 67 Civ and Fourworld Global v Enstar [2025] SC (Bda) 76 Civ.
In the ordinary case, the company will be ordered to provide general discovery of all documents relevant to fair value, usually with a look‑back period of at least three years ending on the valuation date, supported by structured categories and a data room process. In Myovant, the Court held that the “general rule” was wide company discovery. In its discovery ruling in Glendina v NKWE [2022] SC (Bda) 22 Com, the Court held that “as is the norm” discovery will be “significant” and included all relevant and potentially relevant documents. In Enstar the Court reiterated that wide general discovery was standard in appraisal actions.
An exception arose in Jardine, where the Court declined to order immediate general discovery given the size and complexity of the Jardine group. Instead, it ordered an initial tranche (e.g., fairness‑opinion materials) and expert‑led requests first, with liberty to revisit. In Enstar by contrast the Court ordered very broad immediate general discovery, allowing practically all categories of discovery sought by the dissenting shareholders.
Directions hearing which determine the scope of discovery have increasingly taken the form of a “mini trial,” lasting two or more days. Leading Counsel are instructed, and the parties may adduce expert and factual evidence. However cross examination of the expert or factual witnesses is unlikely to be permitted: in Jardine, the Court declined cross‑examination on discovery affidavits absent exceptional circumstances. Companies should therefore expect the Court will usually accept the views of the dissenting shareholders’ expert witnesses on the scope of discovery required and prepare accordingly; as illustrated in Enstar.
The discovery process typically involves two stages; first, the identification of the full range of documents that might have to be disclosed in a given category; secondly, the review of those documents for irrelevant, duplicative or privileged material. In Enstar, the dissenting shareholders responded to the burdensome scope of the disclosure exercise by adducing an expert report, suggesting that AI could significantly reduce review time and cost, even where tens of millions of documents for disclosure were involved. As to whether this works in practice remains to be tested.
The Court too has emphasised that, although experts’ information requests are important, they are not a substitute for the company’s primary general discovery obligation. The Bermuda courts’ adoption of the Cayman guidance makes clear that the company’s general discovery comes first; expert requests refine, not replace, that obligation. Again, unusually, in Jardine the Court used a staged “first step” of fairness‑advisor materials followed by expert requests considering the group’s exceptional scale.
What Must be Disclosed
The company must disclose all documents in the company’s possession, custody or power (PCP) where relevant (and, where appropriate, potentially relevant) to determining fair value at the valuation date. Typical categories include: management projections, budgets, forecasts; materials for DCF/other methodologies; board/special committee materials; fairness‑opinion workstreams and inputs; market‑check/sale process communications and banker materials; material non-public information (MNPI) pertinent to valuation as at the valuation date. In Enstar, the Court framed relevance as what is reasonably necessary for experts to select methods, prepare reports, test fairness opinions and evaluate limitations.
Messaging platforms (e.g., WeChat, Signal, etc.) fall within “documents” where captured by the discovery order’s terms. In APS Holding Corporation v Sumitomo [2025] SC (Bda) 16 Civ, the Court confirmed that text/messaging data are within scope where orders use broad documentary language. Bermuda’s approach aligns with Cayman practice.
Discovery orders commonly require the company to establish a data room and upload specified document sets, alongside general disclosure. Whether documents of subsidiaries (including listed affiliates) are within the parent’s PCP depends on legal rights or a practical arrangement amounting to “power” to obtain them. Jardine explored PCP in group structures and the test for “practical control,” rejecting an automatic rule that a holding company controls all subsidiary documents.
The company may assert legal-advice privilege over legal advice about the transaction and assert litigation privilege over documents created once adversarial proceedings are reasonably contemplated. The Privy Council in Jardine [2025] UKPC 34 addressed the important question of whether dissenting shareholders were entitled to see the legal advice that was given to the Jardine Matheson group when it was setting its fair value offer. The Committee held that the Shareholder Rule no longer applied in the context of hostile litigation. As a result, dissenting shareholders cannot obtain documents in the PCP of the company which are otherwise covered by legal advice privilege.
Dissenting shareholders, though outsiders, will be required to provide more limited disclosure. This will typically include their trading history and ownership/voting documents for the shares under appraisal, and any valuations or analyses they prepared or considered. In Myovant, the Court ordered production of trading and ownership materials and any valuations. In NKWE, the Court recognised mutual discovery in principle but refused broad, burdensome orders where dissenters were unlikely to have relevant material.
Conclusion
In Bermuda appraisal actions, the Court’s default is broad, company‑led general discovery, supported by data rooms and structured categories, and supplemented by expert information requests. Proportionality, necessity, privilege and PCP constraints are actively managed. Dissenters’ disclosure is narrower but meaningful. In extraordinary cases (e.g., uniquely complex groups), the Court may stage discovery, beginning with fairness‑opinion and public materials before expanding, always with liberty to revisit as the valuation issues crystallise. Recent decisions suggest that the role of AI to seek expert advice on how the burden of discovery might be reduced or is likely to become a contentious issue in future litigation.