Youell & Ors v La Reunion Aerienne & Ors

Proceedings between professional insurers are not subject to the special jurisdiction rules for insurance in Section 3 of the Judgments Regulation. Those rules protect economically weaker parties and do not apply where the parties are insurers or reinsurers dealing with each other. The same analysis applies to a claim brought by an insurer as assignee of the insured’s rights.

The arbitration exclusion in Article 1.2(d) does not remove jurisdiction under Article 5.1(a) merely because the relevant contract contains an arbitration clause. The court must examine the substantive subject matter of the proceedings. A claim for negative declaratory relief concerning liability between insurers is within the Regulation.

The London market insurers sought declarations that they were not liable to the French market insurers for a proportion of a settlement of claims arising from earlier United States litigation. The French market had funded the settlement and claimed authority to bind the London market, alternatively relying on an assignment from the insured.

The French market also sought to commence or continue arbitration in Paris and applied to set aside the English Claim Form and service. The issues were whether the claim fell within Article 5.1(a) of the Regulation, whether Section 3 applied to disputes between insurers, and whether Article 1.2(d) excluded jurisdiction because the relevant contracts contained arbitration clauses.

1. Jurisdiction under Article 5.1(a). The French market’s own case in the Paris arbitration established a good arguable case that the dispute related to contractual obligations. Since the alleged obligation to pay was, on the assumed application of French law, performable at the London market’s domicile in England, Article 5.1(a) was capable of conferring jurisdiction.
2. Section 3 of the Regulation. The special insurance jurisdiction rules pursue a protective policy. They are therefore to be interpreted restrictively and do not extend to disputes between professional insurers or reinsurers, none of whom can be presumed to occupy a weaker position. Following the reasoning in UGIC v Group Josi Reinsurance Company [2001] QB 68, Agnew v Lansforsakrings Bolagens A.B. [2001] 1 AC 223 and GIE Réunion Européenne v Zurich Espana Case C-77/04, the French market’s direct claim against the London market was outside Section 3.
3. The same conclusion applied to the derivative claim based on assignment. The protective jurisdiction rules could not be invoked by an assignee for whom the protection was unjustified. The court regarded a claim by one co-insurer against another as outside Section 3 even when pursued as assignee of the insured.
4. Arbitration. Article 1.2(d) did not oust jurisdiction under Article 5.1(a) merely because the relevant contract contained an arbitration clause. The subject matter of the English proceedings was a declaration of non-liability, not arbitration. The court accepted the limited reasoning of the Advocate General in Allianz SpA v West Tankers Inc (The Front Comor) Case C-185/07 that a legal relationship does not fall outside the Regulation solely because the parties have agreed to arbitrate.
5. The French market remained free to apply for a stay under section 9 of the Arbitration Act 1996. That issue was not determined. The application to set aside the Claim Form or service was dismissed, and the court held that it had jurisdiction to entertain the claim.