Travelers Casualty and Surety Company of Europe Ltd & Ors v Sun Life Assurance Company of Canada (UK) Ltd & Anor Rev 1

The court refused Sun Life's application to stay the English proceedings and to set aside permission to serve Sun Life Canada out of the jurisdiction. The judge applied the forum non conveniens principles derived from Spiliada and subsequent authorities and held that the action should be viewed in the round in relation to defendants served both inside and outside the jurisdiction. The policy was a complex multi‑partite global insurance contract and there was no clear and certain implied choice of Ontario law at this interlocutory stage; the applicable law was therefore arguable both for Ontario and for England. The judge gave significant weight to the fact that the central factual matrix and regulatory interactions (the PIA/FSA focus visit and ensuing past business review) occurred in England and that third‑party disclosure from the FSA and the convenience of calling primary witnesses favoured trial in England. Differences in substantive law (notably Ontario's statutory power under section 129 of the Insurance Act 1990 to relieve against forfeiture and the possible availability of punitive damages in Canada) were considered but were not decisive. The application to stay and to set aside the out‑of‑jurisdiction service was dismissed because England had the most real and substantial connection and was the more appropriate forum for trial.

Background and parties:

• The dispute concerned a global multi‑layered insurance programme (the Policy) taken out by Sun Life Assurance Company of Canada (Sun Life Canada) covering subsidiaries including Sun Life UK. The Policy included Section 1B (Financial Institution Professional Liability) and incorporated a warranty (Clause 6 of the Master General Conditions) and notification obligations (Clause 7 and Section 1B).
• Insurers (claimants) issued proceedings in the English Commercial Court seeking declarations that the claim was excluded by the Warranty or that insurers had no liability for failure of notification. Sun Life UK and Sun Life Canada (defendants) applied to stay the English proceedings in favour of proceedings in Ontario and to set aside permission to serve Sun Life Canada out of the jurisdiction.

Nature of application and issues:

• Sun Life sought a stay and set‑aside on the basis that Canada was a clearly and distinctly more appropriate forum.
• The court identified the key issues: applicable law of the Policy; whether the Warranty excluded cover; whether notification requirements were complied with; whether, on Ontario law, relief from forfeiture under s.129 could be granted; the weight to be given to the availability of punitive damages under Canadian law; and the utility of the insurers' negative declaration proceedings.

Reasoning:

• Jurisdictional law: the judge analysed EU jurisdictional authorities (including Article 2 of Council Regulation 44/2001 and authorities such as Re Harrods, UGIC and subsequent Court of Appeal decisions) and concluded he had discretion to consider forum non conveniens; he would view the case in the round where some defendants were served within and some without the jurisdiction.
• Applicable law: the Policy was multi‑partite and there was no express choice of law. The judge found there was a good arguable case for both Ontario law and English law and it could not be decided at interlocutory stage.
• Substantive differences: the Ontario Insurance Act 1990 s.129 (relief against forfeiture) and Canadian law permitting punitive damages were noted as potential differences but the court concluded these were not sufficient to make Ontario the clearly more appropriate forum; the punitive damages claim in Ontario was unlikely to succeed on the pleaded facts.
• Connecting factors and practicalities: the central factual matrix (interactions between Sun Life UK and the PIA/FSA, the conduct of the past business review and the incurrence of most costs) connected the dispute strongly to England; third party disclosure from the FSA and the convenience and number of English witnesses favoured England; by contrast, Ontario would require more expert evidence about the UK regulatory regime and might involve a jury trial which would increase complexity and cost.

Conclusion: The judge concluded that England was the more appropriate forum and accordingly dismissed the application to stay proceedings and refused to set aside the permission to serve Sun Life Canada out of the jurisdiction.

This is a first instance decision. The court dismissed Sun Life's application to stay the English proceedings and to set aside the permission to serve Sun Life Canada out of the jurisdiction. The judge reasoned that (i) he retained discretion to consider forum non conveniens despite EU jurisdictional materials; (ii) the applicable law of the Policy was genuinely arguable as either English or Ontario law; and (iii) on balance the dispute had its most real and substantial connection with England because the central events and bulk of evidence (including evidence from the FSA and United Kingdom witnesses) were English, so England was the more appropriate forum.