Allianz Insurance Company - Egypt v Aigaion Insurance Company SA

On an application for permission to appeal, a single Court of Appeal judge should not finally resolve a substantial point which the trial judgment has not addressed, particularly where the respondent has not been fully prepared to meet it. The proper course may be to grant permission while protecting the successful party through a prompt election to pursue the appeal and security for the judgment sum, interest and costs. An issue concerning section 53(1) of the Marine Insurance Act was identified but left for any cross-appeal.

The dispute concerned proposed reinsurance of the vessel Ocean Dirk. Allianz contended that a reinsurance contract had been concluded on 30 March 2005, alternatively on 2 April 2005. The Commercial Court rejected the first case but held that a contract was concluded on 2 April 2005.

Aigaion sought permission to appeal, arguing that its acceptance did not correspond with the terms offered, particularly concerning a class-maintained warranty. The Court of Appeal considered whether that arguable issue could properly be determined at the permission hearing, given that the lower court’s judgment had not addressed it.

1. Permission and scope. The court held that it should not determine the substantive contract issue at an ex parte hearing for which the prospective respondent had not been fully prepared. Nor should a single judge effectively decide an issue which had not been dealt with in the trial judgment. The appeal therefore raised an issue suitable for consideration by the full court, and permission to appeal was granted.
2. Protection of the respondent. Aigaion was required, within seven days, to state whether it intended to pursue the appeal. If it did so, the whole sum ordered by the trial judge had to be secured within a further seven days, by payment into an approved bank account or into court. The security was to include interest up to 14 November 2008 and an agreed sum for the respondent’s costs, or a sum to be determined after short written submissions.
3. Section 53(1). The court identified the application of section 53(1) of the Marine Insurance Act as an important issue on which views below and in the Court of Appeal differed. Whether the respondent wished to cross-appeal on that issue was left to its election. If it did so, the court indicated that additional security for interest beyond 14 November would not be required.
4. The formal order was: Application granted.

• Court of Appeal (Civil Division): Granted Aigaion permission to appeal, subject to an election and security conditions. The substantive appeal was not determined.
• Queen’s Bench Division, Commercial Court: His Honour Judge Chambers QC rejected the alleged agreement of 30 March 2005 but held that a reinsurance contract was concluded on 2 April 2005.