[SSJ LETTERHEAD]
EXHIBIT 5.1
STEPHEN S JAMES
Counsel to the Firm
18 July 2002
Nabors Industries Ltd.
c/o The Corporate Secretary Limited
Whitepark House
White Park Road
Bridgetown, Barbados
Dear Sirs
NABORS INDUSTRIES LTD. (THE "COMPANY")
We have acted as legal counsel in Bermuda to the Company in connection with the
filing by the Company with the Securities and Exchange Commission, under the
Securities Act of 1933, as amended, of a registration statement on Form S-8 (the
"Registration Statement") in relation to a total of 1,073,514 Common Shares of
the Company of par value US$0.001 each (the "Common Shares") which may be issued
upon the exercise of options to acquire Common Shares granted or to be granted
under the Nabors Industries, Inc. 1992 Incentive Stock Plan and the Nabors
Industries, Inc. 1993 Key Employee Stock Plan (collectively, the "Plans").
For the purposes of this opinion we have examined and relied upon the documents
listed, and in some cases defined, in the Schedule to this opinion (the
"Documents") together with such other documentation, as we have considered
requisite to this opinion. Unless otherwise defined herein, capitalized terms
have the meanings assigned to them in the Registration Statement.
ASSUMPTIONS
In stating our opinion we have assumed:-
(a) the authenticity, accuracy and completeness of all Documents submitted
to us, and such other documents examined by us, as originals, and the
conformity to authentic original Documents of all Documents submitted
to us, and such other documents examined by us, as certified,
conformed, notarised, faxed or photostatic copies;
(b) that each of the Documents and other such documentation which was
received by electronic means is complete, intact and in conformity with
the transmission as sent;
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(c) the genuineness of all signatures on the Documents;
(d) the authority, capacity and power of each of the persons signing the
Documents (other than the Company);
(e) that any representation, warranty or statement of fact or law, other
than as to the laws of Bermuda, made in any of the Documents is true,
accurate and complete;
(f) that there are no provisions of the laws or regulations of any
jurisdiction other than Bermuda which would be contravened by the
execution or delivery of the Plans or which would have any implication
in relation to the opinion expressed herein and that, in so far as any
obligation under, or action to be taken under, the Plans is required to
be performed or taken in any jurisdiction outside Bermuda such action
or obligation will not be illegal by virtue of the laws of that
jurisdiction;
(g) that the Plans are in the proper legal form to be admissible in
evidence and enforced in the courts of the State of Delaware and in
accordance with the laws of the State of Delaware;
(h) that any award issued under the Plans (the "Awards") will constitute
the legal, valid and binding obligation of the recipient;
(i) that each of the Company or any other party to the Plans is not
carrying on investment business in or from within Bermuda under the
provisions of the Investment Business Act 1998 as amended from time to
time;
(j) that the records which were the subject of the Company Search were
complete and accurate at the time of such search and disclosed all
information which is material for the purposes of this opinion and such
information has not since the date of the Company Search been
materially altered;
(k) that the records which were the subject of the Litigation Search were
complete and accurate at the time of such search and disclosed all
information which is material for the purposes of this opinion and such
information has not since the date of the Litigation Search been
materially altered;
(l) that the Resolutions are in full force and effect, have not been
rescinded, either in whole or in part, and there is no matter affecting
the authority of the Directors to effect entry by the Company into the
Plans, or to perform their obligations under the Registration Statement
not disclosed by the Constitutional Documents or the Resolutions, which
would have any adverse implication in relation to the opinions
expressed herein;
(m) that each Director of the Company, when the Board of Directors adopted
the Resolutions (which are the Directors' resolutions), discharged his
fiduciary duty
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owed to the Company and acted honestly in good faith with a view
to the best interests of the Company;
(n) that each transaction to be entered into pursuant to the Plans is
entered into in good faith with a view to the best interests of the
Company;
(o) that the Plans constitute legal, valid and binding obligations of the
parties thereto, enforceable in accordance with its terms under the
laws of the State of Delaware by which they are expressed to be
governed and that the Company has entered into its obligations under
the Plans in good faith for the purpose of carrying on its business and
that, at the time it did so, there were reasonable grounds for
believing that the transactions contemplated by the Plans would benefit
the Company;
(p) that the Plans constitute the legal, valid and binding obligations of
the parties thereto, other than the Company, under the laws of their
jurisdiction of incorporation or jurisdiction of formation;
(q) that the Plans have been validly authorised, executed and delivered by
each of the parties thereto, other than the Company, and the
performance thereof is within the capacity and power of each such party
thereto and that each such party to which the Company purportedly
delivered the Plans has actually received and accepted delivery of the
Plans;
(r) that, at the time of issue by the Compensation Committee (the
"Committee") of any Award under the Plans or of Common Shares pursuant
to such Awards, the Committee has been duly constituted and remains a
duly constituted committee of the Board of Directors of the Company
having the necessary powers and authority to issue Awards and any
Common Shares pursuant to the Plans;
(s) that the approval of the issue of any Awards under the Plans are duly
made at a duly convened and quorate meeting of the Committee in a
manner complying with the terms of its constitution then in force
within the authority then given to the Committee by the Board of
Directors of the Company; and
(t) that the issue price of the Common Shares issued pursuant to Awards
issued under the Plans will not be less than the par value of such
shares and the Company will have sufficient authorised share capital to
effect the issue of such shares and will continue to hold the necessary
consent of the Bermuda Monetary Authority.
OPINION
Based upon and subject to the foregoing and subject to the reservations set out
below and to any matters not disclosed to us, we are of the opinion that:
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(1) The Company is an exempted company incorporated with limited liability
and existing under the laws of Bermuda. The Company possesses the
capacity to sue and be sued in its own name and is in good standing
under the laws of Bermuda.
(2) The Company has taken all necessary corporate action to authorise the
delivery of the Registration Statement and the registration of the
Shares pursuant to the Registration Statement.
(3) The Company has taken all necessary corporate action to authorise the
Plans and the issuance of the Common Shares.
(4) When issued in accordance with the Resolutions and the Plans, the
Common Shares will be duly and validly issued, fully paid,
non-assessable shares of the Company.
(5) The issue by the Company of the Shares will not violate:-
(a) any provision of any applicable law of Bermuda, nor, as far as
can be ascertained from public record, any regulation or order
of any governmental, judicial or public body or authority of
or in Bermuda;
(b) the Memorandum of Association or Bye-laws of the Company.
(6) Based solely upon the Company Search and the Litigation Search:
(i) no litigation, arbitration or administrative or other
proceeding of or before any arbitrator or governmental
authority of Bermuda is pending against or affecting the
Company or against or affecting any of its properties, rights,
revenues or assets; and
(ii) no notice to the Registrar of Companies of the passing of a
resolution of members or creditors to wind up or the
appointment of a liquidator or receiver has been given. No
petition to wind up the Company or application to reorganise
its affairs pursuant to a Scheme of Arrangement or application
for the appointment of a receiver has been filed with the
Supreme Court.
(7) The Company has received an assurance from the Ministry of Finance
granting an exemption, until 28 March 2016, from the imposition of tax
under any applicable Bermuda law computed on profits or income or
computed on any capital asset, gain or appreciation, or any tax in the
nature of estate duty or inheritance tax, provided that such exemption
shall not prevent the application of any such tax or duty to such
persons as are ordinarily resident in Bermuda
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and shall not prevent the application of any tax payable in accordance
with the provisions of the Land Tax Act 1967 or otherwise payable in
relation to land in Bermuda leased to the Company. There are, subject
as otherwise provided in this opinion, no Bermuda taxes, stamp or
documentary taxes, duties or similar charges now due, or which could in
the future become due, in connection with the delivery, performance of
the Plans or the transactions contemplated thereby and the Company is
not required by any Bermuda law or regulation to make any deductions or
withholdings in Bermuda from any payment it may make thereunder.
RESERVATIONS
We have the following reservations:-
(a) The term "enforceable" as used in this opinion means that there is a
way of ensuring that each party performs an agreement or that there are
remedies available for breach.
(b) We express no opinion as to the availability of equitable remedies such
as specific performance or injunctive relief, or as to any matters,
which are within the discretion of the courts of Bermuda in respect of
any obligations of the Company as set out in the Plans. In particular,
we express no opinion as to the enforceability of any present or future
waiver of any provision of law (whether substantive or procedural) or
of any right or remedy which might otherwise be available presently or
in the future under the Plans.
(c) Enforcement of the obligations of the Company under the Plans may be
limited or affected by applicable laws from time to time in effect
relating to bankruptcy, insolvency or liquidation or any other laws or
other legal procedures affecting generally the enforcement of
creditors' rights.
(d) Enforcement of the obligations of the Company may be the subject of a
statutory limitation of the time within which such proceedings may be
brought.
(e) We express no opinion as to any law other than Bermuda law and none of
the opinions expressed herein relates to compliance with or matters
governed by the laws of any jurisdiction except Bermuda. This opinion
is limited to Bermuda law as applied by the Courts of Bermuda at the
date hereof.
(f) Where an obligation is to be performed in a jurisdiction other than
Bermuda, the courts of Bermuda may refuse to enforce it to the extent
that such performance would be illegal under the laws of, or contrary
to public policy of, such other jurisdiction.
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(g) Where a person is vested with a discretion or may determine a matter in
his or its opinion, such discretion may have to be exercised reasonably
or such an opinion may have to be based on reasonable grounds.
(h) A Bermuda court may refuse to give effect to any provisions of the
Plans in respect of costs of unsuccessful litigation brought before the
Bermuda court or where that court has itself made an order for costs.
(i) Searches of the Register of Companies at the office of the Registrar of
Companies and of the Supreme Court Causes Book at the Registry of the
Supreme Court are not conclusive and it should be noted that the
Register of Companies and the Supreme Court Causes Book do not reveal:
(i) whether an application to the Supreme Court for a winding up
petition or for the appointment of a receiver or manager has
been prepared but not yet been presented or has been presented
but does not appear in the Causes Book at the date and time
the Search is concluded;
(ii) whether any arbitration or administrative proceedings are
pending or whether any proceedings are threatened, or whether
any arbitrator has been appointed;
(iii) details of matters which have been lodged for filing or
registration which as a matter of general practice of the
Registrar of Companies would have or should have been
disclosed on the public file but have not actually been
registered or to the extent that they have been registered
have not been disclosed or do not appear in the public records
at the date and time the search is concluded;
(iv) details of matters which should have been lodged for
registration but have not been lodged for registration at the
date the search is concluded; or
(v) whether a receiver or manager has been appointed privately
pursuant to the provisions of a debenture or other security,
unless notice of the fact has been entered in the Register of
Charges in accordance with the provisions of the Companies Act
1981.
Furthermore, in the absence of a statutorily defined system for the
registration of charges created by companies incorporated outside
Bermuda ("overseas companies") over their assets located in Bermuda, it
is not possible to determine definitively from searches of the Register
of Charges maintained by the Registrar of Companies in respect of such
overseas companies what charges have been registered over any of their
assets located in Bermuda or whether any one charge has priority over
any other charge over such assets.
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(j) In order to issue this opinion we have carried out the Company Search
as referred to in the Schedule to this opinion and have not enquired as
to whether there has been any change since the date and time such
search was completed.
(k) In order to issue this opinion we have carried out the Litigation
Search as referred to in the Schedule to this opinion and have not
enquired as to whether there has been any change since the date and
time such search was completed.
(l) In paragraph (1) above, the term "good standing" means that the Company
has received a Certificate of Compliance from the Registrar of
Companies.
(m) Any reference to this opinion to being "non-assessable" shall mean, in
relation to fully-paid shares of the Company and subject to any
contrary provision in any agreement in writing between the Company and
the holder of shares, that no shareholder shall be obliged to
contribute further amounts to the capital of the Company, either in
order to complete payment for their shares, to satisfy claims of
creditors of the Company, or otherwise; and no shareholder shall be
bound by an alteration of the Memorandum of Association or Bye-laws of
the Company after the date on which he became a shareholder, if and so
far as the alteration requires him to take, or subscribe for additional
shares, or in any way increase his liability to contribute to the share
capital of, or otherwise to pay money to the Company.
(n) Bermuda law does not recognise the concept of "treasury shares" and so
such shares will not be available to satisfy the obligations of the
Company to issue Common Shares under the Plans.
DISCLOSURE
This opinion is addressed to you in connection with the filing with the US
Securities and Exchange Commission of the Registration Statement and is not to
be made available to, or relied on by any other person or entity, or for any
other purpose, without our prior written consent. We consent to the filing of
this opinion as an exhibit to the Registration Statement by the Company.
This opinion is addressed to you solely for your benefit and is neither to be
transmitted to any other person, nor relied upon by any other person or for any
other purpose nor quoted or referred to in any public document nor filed with
any governmental agency or person, without our prior written consent, except as
may be required by law or regulatory authority. Further, this opinion speaks as
of its date and is strictly limited to the matters stated herein and we assume
no obligation to review or update this opinion if applicable laws or the
existing facts or circumstances should change.
Yours faithfully
/s/ APPLEBY SPURLING & KEMPE
SCHEDULE
1. The entries and filings shown in respect of the Company on the file of
the Company maintained in the Register of Companies at office of the
Registrar of Companies in Hamilton, Bermuda, as revealed by a search
completed at 11:20 a.m. on 17 July, 2002 (the "Company Search").
2. The entries and filings shown in respect of the Company in the Supreme
Court Causes Book maintained at the Registry of the Supreme Court in
Hamilton, Bermuda, as revealed by a search completed at 12:05p.m. on 17
July, 2002 in respect of the Company (the "Litigation Search").
(The Company Search and the Litigation Search are together referred to
as the "Searches").
3. An electronic copy of the Registration Statement (excluding exhibits
and excluding the documents incorporated by reference).
4. Faxed copies of the Plans.
5. Certified copies of the Certificate of Incorporation, Memorandum of
Association and Bye-laws for the Company (collectively referred to as
the "Constitutional Documents").
6. Certified copies of the minutes of the Board of Directors of the
Company effective 20 June, 2002 (the "Resolutions").
7. A certified copy of the "Foreign Exchange Letter", dated 11 December,
2001 and a letter of permission dated 15 April 2002, issued by the
Bermuda Monetary Authority, Hamilton Bermuda in relation to the
Company.
8. An Officers Certificate (the "Certificate") dated 18 July, 2002 and
signed by Geraldine Harris, Assistant Secretary of the Company
confirming the authorised and issued capital of the Company as at that
date and the maximum number of Common Shares to be issued pursuant to
the Plans.
9. A Certificate of Compliance, dated 17 July, 2002 issued by the Ministry
of Finance in respect of the Company.