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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Tryg Baltica International (UK) Ltd. v Boston Compania De Seguros SA & Ors [2004] EWHC 1186 (Comm) (28 May 2004) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2004/1186.html Cite as: [2005] Lloyd's Rep IR 40, [2004] EWHC 1186 (Comm) |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
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TRYG BALTICA INTERNATIONAL (UK) LTD |
Claimant |
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- and - |
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BOSTON COMPANIA De SEGUROS SA & ORS. |
Defendant |
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Mr Simon Croall (instructed by (i) Waterson Hicks, Solicitors, London, (ii) Norton Rose, Solicitors, London and (iii) BLG, Solicitors, London) for the Defendants
Hearing dates: 19th and 20th May 2004
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Crown Copyright ©
Mr Justice Cooke :
Introduction
"1. (a) that the contracts of reinsurance to which the Claimant subscribed, particulars of which are set out in schedule 1 hereto ("the reinsurance contracts"), are not subject to "pessification" pursuant to Decrees 214 and 320 of 2002 promulgated by the Government of Argentina or other such similar acts, decrees or orders of the Government of Argentina and that the currency of the reinsurance contracts, including its limits and deductibles, remains US Dollars, notwithstanding that the original insurance contracts underwritten by such Defendants may have been "pessified" by such decrees, acts or orders and
(b) that the limits and deductibles under the reinsurance contracts shall be applied to each claim in US Dollars at the US Dollar equivalent of Argentinian Pesos at the exchange rate prevailing at the date of the ascertainment of the relevant loss the subject of indemnity thereunder
2. A declaration that the Claimant is not liable under the reinsurance contracts to pay the claims made or to be made in respect of the losses or occurrences notified by the Defendants to the Claimant as set out in schedule 2 hereto, in each case by reason of the relevant Defendant's breach of the condition precedent contained in each of the contracts of reinsurance requiring immediate notification, or notification as soon as practicable and without undue delay, as the case may be, of such losses or occurrences to the Claimant.
3. Further or alternatively to paragraph 2 above, a declaration that the Claimant is not liable to indemnify the Defendants or any of them under the reinsurance contracts save on proof by the relevant Defendant that
(a) they have taken all defences to the claims against them available under Argentinian law under the original policies underwritten by them and have preserved all their rights and the subrogated rights of the Claimant, where applicable, against the original assureds under such policies or the original third party claimants, further or alternatively
(b) that where claims, losses and occurrences the subject of any Defendant's claim for indemnity have been paid or settled by any Defendant, that the claims so settled fell within the scope of the original policies underwritten by them and within the relevant reinsurance contracts and/or that such settlements were prudent and business-like.
4. A declaration that the Claimant is not liable to indemnify any Defendant in respect of any claims by any original assureds against such Defendant for legal costs, fees or expenses under the relevant original policies, whether or not the original policies cover such legal costs, fees or expenses, nor in respect of any legal fees, costs or expenses incurred by any Defendant in dealing with any claim under the relevant original policies
………"
i) The first declaration sought therefore essentially involves a question of construction of the contracts of reinsurance on the assumption that the original insurance contracts written by the Defendants which are governed by Argentinian law are, by virtue of changes in that law, to be treated as expressed in Pesos and not US$ as originally written.
ii) The second declaration sought is a declaration of negative liability in respect of all the losses set out in Schedule 2, although, for reasons which appear later, it now appears that only a limited number of these may now be in issue. The allegation made by Tryg is that the Defendants have failed to give appropriate notice under the Reinsurances and are thus in breach of condition precedent and no liability therefore falls on Tryg. Issues of fact therefore arise in relation to notification to the Defendants, the Defendants' knowledge of the position and the notice given by the Defendants to Tryg, quite apart from any issues of construction of the reinsurance contracts.
iii) The third declaration sought takes a rather different form in as much as Tryg seeks a declaration of non-liability unless the Defendants meet the burden of proof in establishing that which is said to be required under the "Follow the settlements" clauses in the Reinsurances. It appeared that the Claimants were really intent on obtaining rulings as to whether any failure by the Defendants to take the defence of late notification by their insured could relieve Tryg from liability under the Reinsurances.
iv) The fourth declaration sought raises a matter of construction of the reinsurance contracts once again.
The Requirements of CPR Part 6.20(5)(a), (b) and (c)
Are there serious issues to be tried?
"……..
1. There is power to grant a negative declaration in an appropriate case, the fundamental test being whether it would be useful.
2. However, careful scrutiny will be exercised not only to test the utility, or the futility, of seeking to determine the claim by means of a negative declaration in England, but also to ensure that inappropriate forum shopping is not allowed, let alone encouraged.
3. A negative declaration will not be appropriate where it is premature or hypothetical, viz where no claim has been made or threatened against the plaintiff.
4. The existence of imminent or a fortiori current foreign proceedings is always a highly relevant consideration, not only for the purpose of testing the utility of the English claim, but also so as to having in mind the need to avoid the twin dangers of forum shopping and of the vices of concurrent proceedings."
The First Declaration
The Second Declaration
i) Provisions which require immediate notification by the Reinsured upon "knowledge of any losses and occurrences which may give rise to a claim recoverable hereunder."
ii) Provisions which require notification "as soon as is practicable and without undue delay" upon "knowledge of any loss or losses which may give rise to a claim recoverable hereunder".
iii) Provisions which require notification "as soon as is practicable and without undue delay," upon knowledge that the initial or subsequent estimate for a loss is over 50% of the applicable deductible or upon knowledge that, irrespective of any estimate, the loss involves death, brain injury, spinal injury or one of a number of other serious injuries to the person. These provisions also require that the Reinsured should appoint nominated loss adjusters and/or one of the agreed panel of lawyers, if so required by Tryg.
iv) Provisions to the same effect as those in (iii) above save that the names of the agreed loss adjusters and local lawyers are altered.
All four types of clause are expressed to be conditions precedent to claims under the Reinsurances and, once the point is in issue, it is clear that the burden is upon the Defendants to establish compliance with these conditions precedent.
"On a separate matter I would like to reconfirm the situation with regards to application of the Claims Cooperation Clause on current reinsurance placements with Colonia Baltica. We have reconfirmed to the various Cedants that by way of the clause in question they are required to advise London when on the basis of the information available to them relating to any specific incident it is their view that there could be a payment to third parties that would exceed the applicable deductible."
The Defendants put forward various arguments as to the mutual understanding of the parties about the procedure for notification, suggesting that all the different clauses were understood in the manner suggested by this paragraph in the fax. They drew attention to the evidence of Mr Clark, Tryg's Claims Manager in this context.
The Third Declaration
The Fourth Declaration
Forum conveniens
i) The basic principle is that the claimant must satisfy the Court that England is the appropriate forum for the trial of the action, i.e. that in which the case may be most suitably tried for the interests of all the parties and the end of justice.
ii) In considering the question whether there exists some other forum which is more appropriate for the trial of the action, the Court will look first to see what factors there are which point in the direction of another forum as being the natural forum. Such factors include:-
a) Factors affecting convenience or expense such as the availability of witnesses; and
b) Other factors such as the law governing the relevant transactions and the places where the parties reside or carry on business.
iii) If the Court concludes at that stage that there is no other available forum then the burden is discharged.
iv) If however the Court concludes that there is such other available forum which prima facie is clearly more appropriate it will ordinarily set aside permission to serve out unless there are circumstances by reason of which justice requires permission to be granted. In that enquiry the Court will consider all the circumstances of the case, including circumstances which go beyond those taken into account when considering connecting factors with the other jurisdiction.
v) Permission will not be granted simply because the claimant will thereby be deprived of a "legitimate personal or juridical advantage" provided that the Court is satisfied that substantial justice will be done in the appropriate available forum.
vi) Ultimately, the underlying principle is that regard is to be had to the interests to all the parties and the ends of justice.
The First Declaration
"It is argued that because the subject matter of the Reinsurance was a Spanish risk, the commercial context of the ….. Reinsurance suggests in the absence of an express jurisdiction agreement, that the parties intended the Spanish Courts to have jurisdiction over any dispute. I do not agree. Indeed it seems to me, if anything, more natural to suppose that parties to Reinsurance underwritten in the London market would more probably expect litigation to be in the English Court."
The Second Declaration
The Fourth Declaration
Material Non-disclosure
Conclusion