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The Judicial Committee of the Privy Council Decisions
You are here: BAILII >> Databases >> The Judicial Committee of the Privy Council Decisions >> Associated Electric & Gas Insurance Services Ltd v. European Reinsurance Company of Zurich (Bermuda)  UKPC 11 (29 January 2003)
Cite as:  1 All ER (Comm) 253,  2 CLC 340,  1 WLR 1041,  WLR 1041,  UKPC 11
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Associated Electric & Gas Insurance Services Ltd v. European Reinsurance Company of Zurich (Bermuda)  UKPC 11 (29 January 2003)
Privy Council Appeal No. 93 of 2001
Associated Electric & Gas Insurance Services Limited Appellant
European Reinsurance Company of Zurich Respondent
THE COURT OF APPEAL OF BERMUDA
JUDGMENT OF THE LORDS OF THE JUDICIAL
COMMITTEE OF THE PRIVY COUNCIL,
Present at the hearing:-
Lord Bingham of Cornhill
Lord Hobhouse of Woodborough
Sir Christopher Staughton
"Article X ARBITRATION
Any disputes arising out of this agreement or concerning its interpretation or validity shall be resolved on a friendly basis and in accordance with current reinsurance practice rather than strictly according to the letter of the law.
All such disputes shall be referred to a Court of Arbitration which shall consist of two arbitrators, one to be appointed by each party, and an umpire who shall be appointed by the arbitrators before they have studied the case material. The arbitrators and the umpire shall be active or retired officials of companies or underwriters carrying on a similar type of insurance or reinsurance business to that covered hereunder.
If either party fails to appoint an arbitrator within three weeks after being requested in writing by the other party to do so, or in the event of the arbitrators failing to agree as to the appointment of the umpire within an identical period after their own appointment, such arbitrator or umpire shall be appointed by the Secretary General at the time of the Court of Arbitration of the International Chamber of Commerce at the written request of either party.
The procedure shall be at the discretion of the Court of Arbitration appointed for a particular dispute, whereby it shall dispense as far as possible with all legal formalities. It shall pronounce on the distribution between the parties of costs and charges. The ruling of the Court of Arbitration shall be in writing, stating the reasons for its decision and be signed. If one of the arbitrators refuses to sign the decision, this shall have no bearing on its validity. The decision shall be reached within three months after the constitution of the Court of Arbitration.
Otherwise the stipulations of the law of the country in which the Company is domiciled shall be applicable to this arbitration clause and to the agreement of which this clause forms a part, and the appointed Court of Arbitration shall have its situs in that same country."
30. The parties, their lawyers, and the Court of Arbitration agree as a general principle to maintain the privacy and confidentiality of the arbitration. In particular they agree that the contents of the briefs or other documents prepared and filed in the course of this proceeding, as well as the contents of the underlying claim documents, testimony, affidavits, any transcripts, and the arbitration result will not be disclosed at any time to any individual or entity, in whole or in part, which is not a party to the arbitration between AEGIS and European Re.
31. The parties acknowledge that certain AEGIS' claims documents and information, such as coverage opinions and communications with defense counsel, may be subject to attorney-client, work product, and or other privileges and immunities. Any disclosure by AEGIS to European Re of such documents and information will be made with the expectation of privacy and for the sole purpose of this arbitration. By disclosure of underlying claims information to European Re for this purpose, AEGIS does not intend to waive, nor should be construed to waive, any privilege that may apply to such documents and information as to third-parties to this dispute.
32. It is understood that, despite this confidentiality agreement, parties to this arbitration may consult with their experts and share necessary information with those experts and that parties to this arbitration may contact, interview, and request documents from non-parties. It is understood that any documents obtained from third parties must be produced to the other party in order to be submitted to the Court of Arbitration.
33. In the event members of the Arbitration Tribunal retire and new members are appointed, information described in paragraphs 30 and 31 above can be shared with the new Court of Arbitration without violating the confidentiality provision.
34. If either party receives a subpoena from anyone seeking information concerning this arbitration, notice of that subpoena shall be provided immediately to lawyers for the other party so as to afford the opposing party the opportunity to oppose or seek protection from such subpoena.
35. Nothing in this Order shall be construed to preclude European Re from reporting to its retrocessionaires, compliance with rights of inspection (if any), or otherwise enforcing its rights against retrocessionaires, subject to European Re taking reasonable steps to ensure that retrocessionaires respect the confidentiality of that information.
36. Nothing in this Order shall be construed to preclude either party from sharing information with its auditors or regulatory authorities, subject to the party taking reasonable steps to ensure that the recipients of this information respect the confidentiality of that information.
37. Within thirty (30) days of the final disposition of the last gradual pollution claim subject to arbitration, each party will destroy all material obtained from the other party in discovery, and will provide assurances at that time to each other that these materials have been destroyed."
'Arbitration agreement' is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or may arise between them in respect of a defined legal relationship, whether contractual or not. …"
The award shall state the reasons upon which it is based …"
(1) An arbitral award irrespective of the country in which it was made shall be recognised as binding and, upon application to the competent court, shall be enforced.
(2) The party relying on an award or applying for its enforcement shall supply the duly authenticated original award or a duly certified copy thereof ..."
Sections 45 and 46 of the Bermudan Act empower a court hearing any proceedings under the Act to hear those proceedings otherwise than in open court and to restrict any reporting or publication of the proceedings or any information divulged. The rights of privacy of the parties can accordingly be protected notwithstanding the court proceedings. The New York Convention on the Recognition and Enforcement of Foreign Arbital Awards, 1958, is also part of the law of Bermuda (Part IV and Schedule 3 of the Act) and makes similar provision for the recognition and enforcement of arbitral awards using similar phraseology. Section 40(2) of the Act indeed uses more specific language:
"Any Convention award which would be enforceable under this Part shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied upon by any of those persons by way of defence, set off or otherwise in any legal proceedings in Bermuda and any reference … to enforcing a Convention award shall be construed as including references to relying on such an award." (emphasis supplied)
The Act and the Model Law thus confirm the duty to perform the award, ie recognise and respect the rights which it declares.
"Issue estoppel applies to arbitration as it does to litigation. The parties having chosen the tribunal to determine the disputes between them as to their legal rights and duties are bound by the determination by that tribunal of any issue which is relevant to the decision of any dispute which is referred to that tribunal." (per Diplock LJ  1 QB 630 at 643, Fidelitas Shipping Co Ltd v V/O Exportchleb  1QB 630, 643 per Diplock LJ: see also Lord Denning MR in the same case at p 640)
European Re's case in the Rowe arbitration is that the decision of the Boyd arbitrators in the Boyd arbitration was relevant to, indeed, decisive of the Boyd Arbitrators' determination of the dispute referred to them. Thus, they say, it gave rise to an issue estoppel which they can rely upon in the Rowe arbitration; for Aegis to raise again the same dispute in the Rowe arbitration amounts to a failure by Aegis to recognise and perform the earlier award and therefore does not infringe the stipulations of the confidentiality agreement properly construed.
The Second Argument: the merits of the estoppel plea:
Ali Shipping v Shipyard Trogir: