Director’s Duties under Bermuda law: do they include an obligation to speak, read, and write in the English language?

A recent Australian Federal Court decision raises the legal-linguistic question: is it a breach of a director’s duties not to speak, read and write in the English language, especially if the Company is issuing communications to its shareholders and to its regulators in English, which have not been professionally and accurately translated into all relevant foreign languages?

The Australian Federal Court decision is reported as Australian Securities and Investments Commission, in the matter of Sino Australia Oil and Gas Limited (in liq) v Sino Australia Oil and Gas Limited (in liq) [2016] FCA 934. It has been well covered by various blogs and articles, such as these:

In summary, the Australian Federal Court criticized a Chinese director of an Australian company for various breaches of duty, including approving the Company’s prospectus documents without understanding the English text and without obtaining Chinese language translations of them.

Since the reasoning of an Australian Court judgment can sometimes be treated as persuasive by the Bermuda Courts (although not formally binding), it is not too far-fetched to imagine a situation where an international director of a Bermuda exempt company is also criticized, in the future, for his or her inability to speak, read and write in English while discharging his or her duties as director. But since this would have a chilling effect on international businesses deciding to incorporate and transact in Bermuda, any Bermuda court would need to think long and hard before making such a finding.


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