Exhibit 5.1
[LETTERHEAD OF CLIFFORD CHANCE]
16 October 1997
Terra Nova Insurance (UK) Holdings plc
Terra Nova House
Mincing Lane
London EC3R 7AP (the "Issuer")
Dear Sirs,
We are rendering this opinion to you in connection with an exchange offer
registration statement (on forms S-4 and F-4) which is to be filed with the
Securities and Exchange Commission ("SEC") on 15 October 1997 (the "Registration
Statement") which relates to an offer to exchange US$75,000,00 7.2% senior
guaranteed notes due 2007 which were issued by the Issuer on 26 August 1997 (the
"Old Notes) for an identical principal amount of 7.2% senior guaranteed notes
due 2007 (the "Exchange Notes"). The Exchange Notes were constituted by an
indenture dated 26 August 1997 (the "Indenture") between The Chase Manhattan
Bank, as Trustee, the Issuer and Terra Nova (Bermuda) Holdings Ltd.
We have examined copies of:
(a) the Memorandum and Articles of Association of the Issuer confirmed by the
secretary of the Issuer as being those now in force;
(b) copy resolutions of the board of directors of the Issuer passed on 15
October 1997;
(c) an executed copy dated 26 August 1997 of the Indenture; and
(d) a copy of the draft Registration Statement and the prospectus (the
"Prospectus") dated 14 October 1997 the final form of which is to be
incorporated in the Registration Statement and to be issued on 16 October
1997 in respect of the Exchange Notes.
Our opinion is confined solely to the laws of England.
The Indenture and the Exchange Notes are expressed to be governed by the laws of
New York. We have made no investigation of such laws and do not express or
imply any opinions on such laws. In addition, we have assumed that, so far as
the laws of New York are concerned, the Indenture and the Exchange Notes will
constitute legal, valid and binding obligations of the Issuer and that such laws
do not qualify or affect our opinion as set out below.
We have also assumed that:
(i) in so far as any obligation falls to be performed in any jurisdiction
outside England, its performance will not be illegal or ineffective by
virtue of the laws of that jurisdiction;
(ii) all signatures on the executed documents which, or copies of which, we
have examined are genuine;
(iii) each of the parties to the Indenture, other than the Issuer, is able
lawfully to enter into such instrument;
(iv) the execution and delivery of the Indenture has been or, when such
instrument is executed and delivered, will have been duly authorised,
executed and delivered by each of the parties thereto (other than the
Issuer);
(v) that the Indenture has been and the Exchange Notes will be executed before
issue of the Exchange Notes in or substantially in the form examined by us
and in
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accordance with the procedures specified in the Board Resolutions;
(vi) the Memorandum and Articles of Association of the Issuer which we have
examined are those now in force and the Resolution which we have examined
were passed at a meeting duly convened and held;
(vii) the issue of the Exchange Notes will not cause any limit on borrowings to
which the Issuer is subject to be exceeded.
On the basis of the foregoing, and having regard to such legal considerations as
we deem relevant and subject as set out below, we are of the opinion that:
1. subject to paragraph 2, the Issuer is duly incorporated and validly
existing as a public company with limited liability (having re-registered
as a public limited company under the Companies Act 1985 on 8 June 1995)
under the laws of England;
2. We have on 14 October 1997 made a search of the Companies Registry in
London which revealed no order or resolution for the winding-up of the
Issuer and no order of appointment of a receiver or administrator with
respect to the Issuer. However, the search would not reveal whether or not
a winding-up petition has been presented. Furthermore, it is possible that
notice of a winding up order made or resolution passed or a receiver or
administrator appointed may not have been filed at the Companies Registry
immediately. We have also on 14 October 1997 made enquiry of the Companies
Court which has informed us that it has on its central index no record of
the presentation of any winding-up petition in respect of the Issuer. We
are assuming that there has been no change in the position since the
searches were made.
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3. The Issuer has all requisite corporate power to enter into the Indenture
and to issue the Exchange Notes (including the global note) and to perform
its obligations thereunder, the Indenture and the Exchange Notes (in the
form of the global note) have been duly authorised, executed and delivered
by the Issuer in accordance with the laws of England and the Memorandum
and Articles of Association of the Issuer, and there is no reason, so far
as English law is concerned, why the Indenture, the Exchange Notes and the
Definitive Senior Notes (if and when they have been executed,
authenticated and delivered as provided in the Indenture) will not
constitute legal, valid and binding obligations of the Issuer.
The opinions expressed in paragraphs 1 to 3 inclusive above are subject to the
following:
(a) a search at the Companies Registry is not capable of revealing whether or
not a winding-up petition or a petition for the making of an
administration order has been presented;
(b) notice of a winding-up order or resolution, notice of an administration
order and notice of the appointment of a receiver may not be filed at the
Companies Registry immediately and there may be a delay in the relevant
notice appearing on the file of the company concerned;
(c) Nothing in this opinion shall be taken as implying that an English court
would exercise jurisdiction in any proceedings relating to the Indenture
or the Exchange Notes (including the global note), or accordingly that any
remedy would be available in England for the enforcement of obligations
arising under the Indenture or the Exchange Notes (including the global
note). However, in our opinion, if an English court were to accept
jurisdiction it is highly likely that the English courts would give
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effect to the choice of New York law as the governing law of the Indenture
and the Exchange Notes.
(d) There could be circumstances in which an English court would not treat as
conclusive those certificates and determinations which the Indenture and
the Exchange Notes state are to be so treated (for example, where a
discretion is vested in any person or a person may determine a matter in
its opinion, if the discretion is not exercised reasonably or if the
opinion is not based on reasonable grounds).
(e) Our opinion as regards the binding nature and enforceability of the
obligations of the Issuer under the Exchange Notes and the Indenture are
subject to all limitations arising from bankruptcy, insolvency,
liquidation, reorganisation, moratorium or similar laws affecting the
rights of creditors generally.
(f) Any provision in the Indenture which involves an indemnity for the costs
of litigation is subject to the discretion of any English court (where
relevant) to decide whether and to what extent a party to litigation
should be awarded the costs incurred by it in connection with the
litigation.
(g) Except as expressly mentioned in this opinion, we have not investigated or
verified the truth or accuracy of the information contained in the
Registration Statement or Prospectus nor have we been responsible for
ensuring that no material information has been omitted therefrom.
This opinion shall be construed in accordance with English law. We express no
opinion as to any agreement, instrument or other document other than as
specified in this letter. We hereby consent to the filing of this opinion with
the SEC with and as part of the Registration Statement and to the use of our
name therein and in the Prospectus contained in
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the Registration Statement. In giving this consent, we do not hereby admit that
we are in the category of persons whose consent is required under Section 7 of
the Securities Act of 1933 of the United States.
The above consent is given on the basis that our name is not used in any
subsequent Registration Statement (or the Prospectus contained in it) except in
an amendment or supplement to such Registration Statement, including post-
effective amendments.
This opinion is given solely for the purposes of filing the Registration
Statement and for the information of the persons to whom it is addressed and may
not be relied upon for any other purpose or by any other person.
Yours faithfully,
Clifford Chance
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