Harper Versicherungs AG v Indemnity Marine Assurance Company Ltd & Ors

In an arbitration, naming the wrong corporate entity does not necessarily make the proceedings a nullity. The court must determine objectively, by construing the notice and surrounding circumstances, which entity the opposing party would reasonably have understood to be bringing the claim. A statutory transfer of insurance business may therefore result in misnomer rather than proceedings brought by a wholly different claimant. The error may be corrected within the arbitration, subject to authority and unfair prejudice. Authority may be established retrospectively by ratification. Where an arbitration is commenced to recover balances currently due under a continuing treaty, the reference ordinarily extends to further claims arising during the arbitration. The tribunal may consider defences and related inspection or document-production rights.

The claimants were reinsurers involved in a long-running reinsurance dispute. The original arbitration was commenced in the names of two reinsured companies after the relevant insurance business had been transferred by a Financial Services and Markets Act 2000 Part VII scheme to Ocean Marine. The arbitrator treated the error as a misnomer, substituted Ocean Marine as claimant, and permitted later treaty balances to be added. The reinsurers challenged the arbitrator’s jurisdiction, the substitution, and the inclusion of claims notified after the original appointment. The central issues were whether the arbitration was validly constituted, whether the claimant could be corrected, and whether the reference covered subsequent claims.

1. Validity and substitution. The challenges to the arbitrator’s jurisdiction and to the substitution of Ocean Marine were dismissed. The enquiry was contractual and objective. The question was who the reinsurers would reasonably have understood to be asserting the claim under the treaty. The references to Indemnity Marine and London & Scottish were a misnomer caused by ignorance of the Part VII transfer. They did not mislead the reinsurers, who understood that the reinsureds entitled to recover under the treaty were pursuing the claim.

2. The reasoning in SEB Trygg Holding [2005] EWCA Civ 1237 supported that conclusion. The distinctions between universal succession and a Part VII transfer did not affect the relevant approach. The decision was also consistent with Unisys International Services Ltd v Eastern Counties Newspapers Ltd [1991] 1 Lloyd’s Rep 538. Internaut Shipping GmbH v Fercometal SA RL [2003] 2 Lloyd’s Rep 430 was materially different and did not require a different result.

3. Authority and prejudice. The solicitors had authority to act for Ocean Marine from the outset. Alternatively, Ocean Marine had ratified their acts. The reinsurers had been given repeated opportunities to appoint an arbitrator under reservation of rights and could challenge jurisdiction under the Arbitration Act 1996. Substitution caused no unfair prejudice. A three-person tribunal was not a right which, in these circumstances, it would be unfair to deprive them of.

4. Scope of reference. The words appointing the arbitrator to recover sums currently due under the treaty covered balances arising during the currency of the arbitration. A contrary construction would require repeated arbitrations and create opportunities for tribunal-shopping. The arbitrator therefore had jurisdiction to permit the later claims and to consider the reinsurers’ contractual defences and inspection requests.

5. The challenges failed. The court would hear counsel on the form of order.

First-instance decision. No prior appellate decision is stated in the judgment.