A decision on Monday in the US Supreme Court may well have positive ramifications on Bermuda companies, according to a leading litigation lawyer.

Narinder Hargun, litigation partner with law firm Conyers, Dill & Pearman, said the case - Chase Manhattan Bank, now JP Morgan Chase & Co. against Traffic Stream (BVI) Infrastructure Ltd. - places Bermuda companies on par with companies on a global scale.

The case bears on Bermuda - with its status as a British Dependent Territory - as it revolved around "the basic issue of whether companies that incorporated in British Dependent Territories could be considered as citizens or subjects of a foreign state," Mr. Hargun said.

In essence, Mr. Hargun said the decision means Bermuda companies are capable of being sued in the US. And more importantly, Mr. Hargun said, Bermuda companies can sue in the US.

Before this week's decision there were a number of conflicting decisions in US circuit court with a court of appeal decision last year that the law suit be dismissed after concluding the dispute did not belong in US federal court.

Mr. Hargun said: "The argument was that as Dependent Territories were not independent countries - including the British Virgin Islands, Caymans and Bermuda - they did not exist on the international plain. And therefore companies that incorporated in the Dependent Territories could under a particular statute neither sue nor be sued in the US," he said.

Mr. Hargun continued: "That was the issue and the decision of the Supreme Court should be welcomed by Bermuda and other dependent territories because it places Bermuda companies on par with the companies in any other independent country," he said.

The case stemmed from a default by Traffic Stream on a nearly $120 million debt issue for the financing of road construction projects in China. Chase had acted as indenture agent.

Mr. Hargun cited this week's Supreme Court decision as a "clarification of the law" and said it had been supported by the Governments of the US, UK and BVI.

He added that any other decision would have been "detrimental to the Island as among other things US entities would be reluctant to invest in companies incorporated in dependent territories if they could not be sued in the US."

Although the US has a history of larger awards in suits than in British courts, Mr. Hargun said he did not foresee a shift in the number of cases heard on the Island as a result of the decision.

In conclusion, Mr. Hargun said this week's US Supreme Court decision in effect means Bermuda companies will be recognised in the US. And the decision was one that Mr. Hargun said should be welcomed in Bermuda.