Starlight Shipping Company v Allianz Marine & Aviation Versicherungs AG & Ors

A commercial settlement expressed as a full and final settlement of claims under an insurance policy may extend to tortious or delictual claims concerning the same loss. Its scope must be construed sensibly and in the context of linked indemnity and jurisdiction provisions. Fine distinctions between claims arising under a policy and claims arising in relation to a loss will not ordinarily defeat the parties’ evident intention to achieve finality.

An exclusive jurisdiction agreement may cover such claims. Damages and declarations sought for breach of a release or jurisdiction agreement do not, without more, infringe the jurisdictional scheme of Council Regulation 44/2001 (EC). They are not anti-suit injunctions. Damages for bringing foreign proceedings in breach of the agreement are not conditional on the merits of those proceedings, and contractual indemnities may be invoked for defence costs as they accrue.

The shipowners and associated companies settled insurance claims arising from the loss of the Alexandros T with company-market and Lloyd’s-market underwriters. The settlement agreements provided for full and final settlement, indemnities against related claims, and English jurisdiction clauses.

Despite the settlements, the owners brought proceedings in Greece seeking damages from insurers and others. Burton J granted summary judgment, declarations, damages to be assessed, and indemnity relief: [2011] EWHC 3381 (Comm). The English proceedings were initially stayed in favour of the Greek proceedings, but the Supreme Court lifted that stay: [2014] 1 All ER (Comm) 337.

The resumed appeal concerned whether the Greek claims were released, subject to the English jurisdiction agreements, contrary to EU law, and capable of founding immediate claims for damages and indemnity.

1. The appeal was dismissed. Longmore LJ, with whom Rimer and Toulson LJJ agreed, upheld Burton J’s orders.
2. The Greek claims fell within both the settlement and indemnity provisions. Although the settlement referred to claims under the policies and the indemnity was framed more widely, the agreements had to be construed commercially as a whole. The parties intended to end litigation concerning the loss. Applying the approach in Fiona Trust v Privalov [2007] Bus L.R. 1719, distinctions between contractual and tortious or delictual claims did not exclude claims relating to that loss. Barclays Bank Plc v Nylon Capital LLP [2011] EWCA Civ 826 was different because its expert-determination clause expressly divided disputes between expert determination and the court.
3. The same conclusion applied to the jurisdiction clauses in the settlements and insurance policies. The owners had promised to submit such claims to the exclusive jurisdiction of the English courts. Persons who were not parties to those agreements were not themselves bound by the clauses, but the indemnity clauses addressed claims brought by associated entities or others.
4. Claims for declarations and damages for breach of the releases and jurisdiction clauses did not infringe Council Regulation 44/2001 (EC). Unlike the anti-suit injunction in Turner v Grovit [2004] 2 Lloyds Rep. 169, the English claims did not prevent the Greek court from considering the Greek proceedings. Recognition of an English judgment was a matter for the Greek court and did not usurp its jurisdiction.
5. Summary judgment for damages to be assessed was appropriate under CPR Part 24. The breach consisted of bringing proceedings contrary to the jurisdiction agreements. It was irrelevant whether the Greek claims might succeed there or would have failed in England. The underwriters could also enforce the indemnities for defence costs as they accrued; it was not premature to do so.

• Supreme Court: lifted the earlier stay of the English proceedings under Article 27 and declined a stay under Article 28 of Council Regulation 44/2001 (EC): [2014] 1 All ER (Comm) 337.
• Court of Appeal (Civil Division): on the resumed appeal, dismissed the remaining appeal and upheld Burton J’s orders: [2014] EWCA Civ 1010.
• Court of Appeal (Civil Division), earlier interlocutory stage: stayed the English proceedings pursuant to Article 27: [2013] 1 All ER (Comm) 1297.
• Commercial Court: Burton J granted summary judgment, declarations, damages and indemnity relief in favour of the underwriters: [2011] EWHC 3381 (Comm).