In 6 litre pot combine the butter and saute the onions with the black pepper until the onions are tender. Add the potatoes, chicken stock, and bay leaves and bring to a boil. Simmer for 45 minutes to 1 hour. Remove bay leaves. Remove from heat and gradually stir in the cheese until melted. Carefully contents into a food blender and process until creamy. Return to stock pot and serve. Garnish each serving with nutmeg and grated Cheddar.