Amtrust Europe Ltd v Trust Risk Group SpA

At an interlocutory stage, a claimant seeking relief must satisfy the applicable jurisdictional and interim-remedy thresholds. A good arguable case requires a materially stronger argument than a serious issue to be tried, but does not require proof on the balance of probabilities. Where agreements contain different jurisdiction clauses, the court must construe the agreements and consider whether the parties had a rational commercial reason for separate forums; the one-stop presumption is only an aid to construction. A contractual obligation to hold premiums in a separate trust account may support a proprietary claim. If the claimant establishes a serious issue, or the enhanced standard applicable to a mandatory injunction, and has a proprietary interest, damages will ordinarily be inadequate. The injunction must nevertheless be framed consistently with other legal restraints and any legitimate future entitlement to commission.

AmTrust Europe Ltd sought a mandatory injunction requiring Trust Risk Group SpA to replace approximately €32 million transferred from an account into which insurance premiums had been paid. AmTrust contended that the account was a trust account under a 2010 Terms of Business Agreement and that the money had been misappropriated. Trust Risk argued that it was entitled to deduct advance brokerage commission and that disputes were subject to Italian law and Milan arbitration under a later Framework Agreement.

The application followed an earlier hearing at which Eder J refused interim relief after expressing a preliminary view against AmTrust. The central issues were whether the English court had jurisdiction, whether the account was subject to a trust obligation, whether the asserted advance-commission entitlement raised a serious issue to be tried, whether damages were adequate, and how the balance of convenience should be addressed.

1. Jurisdiction. The claimant showed a good arguable case that the English jurisdiction clause in the Terms of Business Agreement continued to apply. That test is higher than a serious issue to be tried but does not require proof on the balance of probabilities. The one-stop presumption in Fiona Trust & Holding Corp v Privalov was relevant but remained an aid to construction. The agreements concerned different aspects of the commercial relationship and contained textual indications that the Terms of Business Agreement survived as a separate agreement.
2. Trust account. The first endorsement to the Terms of Business Agreement required the broker to hold premiums in a separate trust account for and on behalf of the insurer, without mixing them with its general funds. AmTrust had at least a serious issue to be tried and, given that a mandatory injunction was sought, had also satisfied the enhanced standard advanced by the defendant.
3. Advance commission. The defendant accepted that AmTrust had established a serious issue to be tried on whether the transfers were unauthorised. The evidence showed a complete departure from the previous practice, under which net premiums were paid to AmTrust monthly.
4. Adequacy of damages. If the account was a trust account, AmTrust had a proprietary interest in the funds. Damages were therefore inadequate and the account was capable of being required to be made good.
5. Order. A mandatory injunction was granted requiring repayment into the trust account. The order had to accommodate the Italian freezing order and any future entitlement of the defendant to commission. Consequential matters could be dealt with if necessary.