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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> BP Plc v AON Ltd & Anor [2005] EWHC 2554 (Comm) (16 November 2005) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2005/2554.html Cite as: [2005] EWHC 2554 (Comm), [2006] 1 Lloyd's Rep 549 |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
BP Plc |
Claimant |
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- and - |
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AON Limited Aon Risk Services of Texas Inc |
Defendant |
____________________
(instructed by Herbert Smith) for the Claimant
Mr T Weitzman QC and Mr P Ratcliffe
(instructed by Simmons & Simmons) for the Defendants
Hearing dates: 7 and 8 November 2005
____________________
Crown Copyright ©
Mr Justice Colman :
i) A declaration that if the Leading Market or any of them were not liable under the Open Cover or the contract had not incepted in respect of certain of the declarations, whichever of the Aon defendants were responsible for the breach of duty in failing to procure cover, was liable to indemnify BP and the other claimants in respect of claims, alternatively for damages in an amount equal to the claims or to such amount as would have been recoverable had there been effective alternative cover.
ii) A declaration that Aon London was obliged to indemnify BP and other claimants in the Frankona Case to the extent that such parties were not insured by the Frankona Insurer, by reason of its failure to make declarations to those insurers within the period of the Open Cover and/or to pay damages to compensate the claimants in the amount of policy claims and costs which they did not recover from the Frankona Insurers under the terms of their settlement agreement.
iii) A declaration that if BP and the other claimants were in breach of contract with any of their contractors because of the failure of the Aon defendants to procure CAR insurance cover from the Frankona Insurers, for the benefit of those contractors, the Aon defendants were obliged to indemnify BP and the other claimants in respect of such liability to their contractors.
iv) The basis of these claims was that each of the Aon companies was under a contractual duty and/or a duty of care in tort to the Claimants to exercise reasonable skill and care in providing broking services, including in particular the making of timely declarations to the Open Cover. The only express brokerage contract relied upon was the Service Agreement dated 1 September 1998 between Amoco and Aon Texas and signed in April 1999. The claims were thus for damages for breach of that and/or other implied contracts of retainer and/or in negligence.
"Aon Risk Services agrees to hold AMOCO and its affiliates harmless against all liabilities, demands, damages, expenses or losses arising from any third party claim related to the Services and Aon Risk Services performance of the Services.
Aon Risk Services hereby agrees to indemnify AMOCO against all loss, damage, costs and other expenses of any nature whatsoever incurred or suffered by AMOCO, its directors, officers and employees or by a third party as a result of any and all representations, statements, tortuous (sic) acts or omissions including negligence or breaches of obligations arising under or in connection with this Agreement by Aon Risk Services to a maximum amount of Aon Risk Services remuneration noted in Clause 6 above except in the case of third parties where Aon Risk Services will be liable for all loss, damage, injury or death to the full extent of their negligence or fault".
i) the fact that the amendment raised a new cause of action for which BP had not hitherto been given permission to serve Aon Texas, a foreign corporation, outside the jurisdiction and
ii) the fact that according to the evidence adduced by Aon Texas at least some claims under clause 12 might now be time-barred under Illinois Law, more than two years arguably having elapsed since the accrual of the cause of action and, if they were, questions would arise as to whether this court had jurisdiction to exercise its discretion to allow the amendment having regard to the need to show for the purposes of CPR 17.4 that the new cause of action arose out of the same or substantially the same facts as were already in issue on a claim in respect of which BP had already claimed a remedy in the proceedings.
"It is agreed and understood that this Agreement will be subject to and construed in accordance with the laws of the State of Illinois excluding choice of law rules directing application of the law of any other jurisdiction, and both parties consent to the jurisdiction of the courts of that state."
". . .on the language of the clause that I am considering here, it simply should not be open to DHC to start arguing about the relative merits of fighting an action in Texas as compared with fighting an action in London, where the factors relied on would have been eminently foreseeable at the time they entered into the contract.. . .Surely they must point to some factor which they could not have foreseen on which they can rely for displacing the bargain which they made i.e. that they would not object to the jurisdiction of the English Court.
Adopting that approach it seems to me that the inconvenience for witnesses, the location of documents, the timing of a trial, and all such like matters, are aspects which they are simply precluded from raising. . .
It is thus clear to me that the proper approach to a case of the sort that I am considering is to consider it as equivalent to proceedings commenced as of right, to apply the passage in Lord Goff's judgment in The Spiliada dealing with such actions, but to add the consideration which he did not have in mind. . .that there is a clause under which DHC had agreed not to object to the jurisdiction. That being the proper approach, and additionally it being. . .right only to consider the matters which would not have been foreseeable when that bargain was struck, I would dismiss both summonses of the defendants."
"If a party agrees to submit to the jurisdiction of the Courts of a state, it does not easily lie in its mouth to complain that it is inconvenient to conduct its litigation there (i.e. to assert that the agreed forum is a forum non conveniens). As Mr. Justice Waller pointed out in British Aerospace Plc v. Dee Howard Co., [1993] 1 Lloyd's Rep. 368 at p. 376, speaking of matters of convenience in the context of a non-exclusive jurisdiction clause, it is necessary to point to some factor which could not have been foreseen in order to displace the bargain which has been agreed. In such a case that party must show some good reason or special cause why it should not be held to its agreement to submit to the agreed jurisdiction; and if it cannot do so, there seems no reason why the English Court should entertain parallel proceedings here, with their attendant evils - duplication of expense and the danger of inconsistent decisions. In the present case, however, there is no reliance by Mr. Layton on anything unforeseen, no suggestion of any strong or special cause, no identification of some matter which lies beyond considerations of convenience and goes to a matter of justice."
". . .this clause is not an exclusive jurisdiction clause. As I pointed out in Pathe v. Handmade such a conclusion does not mean that the clause ceases to be relevant in relation to an application such as that which is being made by the defendants on this summons. If the contract says that the assured is entitled to sue the underwriter in the English Courts, then it requires a strong case for the Courts of this country to say that that right shall not be recognised and that he must sue elsewhere.
and further at p463:
In evaluating the appropriateness of the forum in the present case I consider that weight must be given to two particular factors which did not have to be discussed in The Spiliada case. . .Secondly, as pointed out in Pathe v. Handmade, the fact that the parties have agreed in their contract that the English Courts shall have jurisdiction (albeit a non-exclusive jurisdiction) creates a strong prima facie case that that jurisdiction is an appropriate one; it should in principle be a jurisdiction to which neither party to the contract can object as inappropriate; they have both implicitly agreed that it is appropriate."
"Nothing in this agreement precludes either party from bringing proceedings in any other jurisdiction …. Nor will the bringing of proceedings in any one or more jurisdictions preclude the bringing of proceedings in any other jurisdiction."
i) All parties would be bound in proceedings to be commenced by BP and the other claimants in the courts of the State of Illinois by all decisions on issues of fact and law made in these English proceedings before me, whether such decision was as to a matter necessary for my conclusion on any claim before me or was obiter in relation to any such claim, regardless of whether the decision gave rise to an issue estoppel under English or Illinois Law and for which purpose in addition to such undertakings, Aon Texas would remain a party to these proceedings.
ii) For the purposes of limitation before the Illinois courts, all parties would enter into a standstill agreement the effect of which would be to stop time running in respect of claims by BP and other claimants under clause 12.
iii) Aon Texas would agree not to argue before the Illinois courts that BP and the other claimants were estopped from relying on their clause 12 claim by reason of their not having advanced such a claim in these English proceedings.
"(4) Rules of court may provide for allowing a new claim to which subsection (3) above applies to be made as there mentioned, but only if the conditions specified in subsection (5) below are satisfied, and subject to any further restrictions the rules may impose.
(5) The conditions referred to in subsection (4) above are the following – (a) in the case of a claim involving a new cause of action, if the new cause of action arises out of the same facts or substantially the same facts as are already in issue on any claim previously made in the original action …"
The relevant rule is CPR 17.4(2) which provides:
"The court may allow an amendment whose effect will be to add or substitute a new claim, but only if the new claim arises out of the same facts or substantially the same facts as a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings."
"The court may allow an amendment whose effect will be to add … a new claim, but only if the new claim arises out of the same facts or substantially the same facts as are already in issue on a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings."
"Whether one factual basis is 'substantially the same' as another factual basis obviously involves a value judgment, but the relevant criteria must clearly have regard to the main purpose for which the qualification to the power to give permission to amend is introduced. That purpose is to avoid placing a defendant in the position where if the amendment is allowed he will be obliged after expiration of the limitation period to investigate facts and obtain evidence of matters which are completely outside the ambit of, and unrelated to those facts which he could reasonably be assumed to have investigated for the purpose of defending the unamended claim."
"The policy of the section was that, if factual issues were in any event going to be litigated between the parties, the parties should be able to rely upon any cause of action which substantially arises from those facts."