Allianz Insurance Company Egypt v Aigaion Insurance Company S.A.

A reinsurance contract may be concluded through exchanges which use shorthand, provided the contractual terms are objectively ascertainable from the placing and its commercial background. A reference to deferred premiums may incorporate the corresponding term in the underlying insurance where that is what the parties intended. Later policy documents cannot impose additional obligations by silence where the contract has already been concluded. Cancellation for non-payment requires compliance with the contractual mechanism. Section 53(1) of the Marine Insurance Act 1906 means that, unless otherwise agreed, the insurer may look to the broker for payment; it does not create a fiction that the assured has necessarily paid the premium.

Allianz, an Egyptian insurer, claimed US$675,000 from Aigaion, a Greek reinsurer, representing Aigaion’s 30 per cent share of a marine loss. The parties negotiated cover through Chedid, a reinsurance broker. Aigaion contended that no concluded contract existed, or alternatively that the cover had terminated because premium instalments were not paid directly to Aigaion.

The court considered whether the exchanges concluded a contract by 2 April 2005, whether the reference to deferred premiums was too uncertain to have contractual effect, whether later policy documents altered the agreement, and whether section 53(1) of the Marine Insurance Act 1906 required the premium to be treated as received.

1. Contract formation. The email of 30 March 2005 did not itself conclude an agreement because Aigaion had only quoted. Aigaion’s email of 2 April 2005 was intended to close the deal and, subject to the remaining arguments, concluded the reinsurance contract.
2. Deferred premium term. The reference to a deferred premium clause was shorthand. In the context of a reinsurance placing, the underlying insurance supplied the relevant commercial background. The term was sufficiently ascertainable because Allianz had identified the deferred premium arrangement applicable to the underlying policy. The contract was therefore not void for uncertainty.
3. Later documents and cancellation. The policy document and debit note issued after the contract had been concluded could not impose new obligations through silence. Allianz had paid the instalments to Chedid. Since the contractual cover required a cancellation notice for cancellation for non-payment, and no such notice had been served, Aigaion remained on risk.
4. Section 53(1). The court dealt separately with Allianz’s alternative argument. The Marine Insurance Act 1906 was to be interpreted as a self-contained codification of the relevant common law. Section 53(1) clearly enabled the insurer to look to the broker for payment, but did not incorporate the historical fiction that the assured must therefore be treated as having paid the insurer.
5. Judgment was entered for Allianz for US$675,000, less net premium of US$53,496.30, with interest. Ancillary matters were adjourned.

Not an appeal. The judgment itself does not state any prior appellate history.