Gard Marine and Energy Ltd & Ors v Glacier Reinsurance AG

Article 6(1) jurisdiction over a co-defendant domiciled in another contracting state depends on a connection between the claims which makes joint determination expedient to avoid irreconcilable judgments. The national court must consider all relevant factors and ask whether divergent outcomes could arise from the same situation of law and fact.

Claims concerning different participations in the same market placement may satisfy that test where they are governed by the same law, contain materially identical terms and depend on a common continuum of factual events. Different legal defences or communications with individual underwriters do not necessarily create different factual situations.

Gard sought the balance allegedly due under excess of loss reinsurance following Hurricane Rita. It sued a London-domiciled Lloyd’s syndicate and Glacier, a Swiss reinsurer, in the Commercial Court. Glacier disputed English jurisdiction, contending that its separate subscription was governed by Swiss law and that separate proceedings created no risk of irreconcilable judgments.

Hamblen J dismissed Glacier’s jurisdictional application under Article 6(1) of the Lugano Convention: [2009] EWHC 2388 (Comm). Glacier appealed. The central questions were whether Glacier’s subscription was governed by English law and whether the claims arose from the same situation of law and fact, so that separate determination risked irreconcilable judgments.

1. Appeal dismissed. Article 6(1) required the national court to assess the connection between the claims by reference to all necessary factors. The question was whether separate proceedings risked divergent outcomes arising from the same situation of law and fact. The Court did not need to resolve the wider debate about the precise meaning of “irreconcilable judgments” (paras 35, 59–63).
2. Gard had shown with reasonable certainty a real choice of English law under Article 3 of the Rome Convention. Glacier joined a London market placement, accepted a share of that placement and subscribed to a London market slip containing London terminology and clauses. The separate slip and its minor differences from the main slip did not indicate a Swiss placement or a choice of Swiss law. Commercial coherence, the English-law underlying policy and the chosen form and terminology reinforced the conclusion (paras 39–45).
3. Alternatively, any Article 4(2) presumption favouring Switzerland was displaced. Considering the transaction as a whole, Glacier’s participation was more closely connected with England (paras 46–47).
4. The principal construction issue was the same for Glacier and the London syndicate. Both subscriptions formed part of the same placement, were governed by English law and contained no difference material to the attachment point. Although individual communications and the legal formulations of the defences differed, the placements formed a continuum of factual events. Those differences did not create distinct factual situations (paras 48–55).
5. The brokers’ later joinder could not independently establish Article 6(1) jurisdiction. Their role nevertheless remained relevant to the common factual continuum of the placements (para 56).
6. There was a real commercial need for one tribunal to determine disputes concerning the same issues in a multi-participant financial-market placement. Separate decisions would risk irreconcilable judgments and damaging uncertainty. Hamblen J was therefore right that joint determination in England was just, convenient and expedient. Richards and Ward LJJ agreed with Thomas LJ (paras 58–65).

• Court of Appeal (Civil Division): Glacier’s appeal was dismissed unanimously: [2010] EWCA Civ 1052 .
• High Court, Queen’s Bench Division (Commercial Court): Hamblen J dismissed Glacier’s jurisdictional application under Article 6(1), while rejecting Gard’s separate reliance on Article 5(a), and granted permission to appeal: [2009] EWHC 2388 (Comm) .