Trust Risk Group SPA v Amtrust Europe Ltd

Where related contracts contain different governing-law and jurisdiction clauses, there is no presumption that the clause in one contract captures disputes arising under another. The court must construe the agreements carefully and commercially, considering their overall scheme and the contract under which the dispute principally arises.

The possibility of fragmented proceedings does not override the parties’ choices. At the interlocutory jurisdiction stage, the claimant must have much the better argument on the available material. An appellate court should exercise some restraint when reviewing that evaluation, but less restraint where jurisdiction turns on construing written agreements, there is only one correct legal meaning, and assuming jurisdiction would subject a foreign defendant to the court’s exorbitant jurisdiction.

An English insurer and an Italian insurance broker entered into a Terms of Business Agreement governing brokerage, premiums and commission. It provided for English law and English jurisdiction. They later entered into a Framework Agreement governing exclusivity in the Italian medical-malpractice market. That agreement provided for Italian law and arbitration in Milan and included the earlier agreement as a schedule.

After the broker withheld premium payments, the insurer commenced English proceedings. Blair J held that the insurer had a good arguable case that the earlier agreement remained a separate contract and that its English jurisdiction clause governed the dispute: [2014] EWHC 4169 (Comm).

The central issue on the broker’s appeal was whether the Framework Agreement superseded the earlier agreement and its jurisdiction clause, or whether the two contracts continued to regulate different aspects of the parties’ relationship.

1. Appeal dismissed. The insurer had much the better argument that the Terms of Business Agreement remained a separate contract and that its English-law and English-jurisdiction clause governed the dispute over retained premiums. Beatson LJ gave the principal judgment. Christopher Clarke and Elias LJJ agreed.

2. The one-stop principle associated with a single arbitration clause does not create a presumption where related contracts contain differently expressed choices of law and forum. The question is one of construction. The court must read the agreements broadly and purposively, consider their overall scheme and identify the contract under which the dispute naturally arises. The risk of fragmented proceedings cannot by itself override the dispute-resolution arrangements the parties made.

3. The Framework Agreement and the Terms of Business Agreement addressed different parts of the commercial relationship. The earlier agreement governed brokerage, premiums and commission. The later agreement principally granted exclusivity in the Italian medical-malpractice market. The Framework Agreement’s references to modifying, and potentially terminating, the earlier agreement showed that the earlier contract continued to exist independently. Its inclusion as a schedule and description as an integral part did not establish that it had been superseded.

4. The apparently overlapping provisions could be read consistently. The later exclusivity obligation displaced the broker’s freedom not to offer Italian medical-malpractice business, but it did not follow that unrelated provisions of the earlier agreement, including its jurisdiction clause, also fell away. Exclusivity disputes were governed by the Framework Agreement and Milan arbitration. Commission and premium disputes remained governed by the earlier agreement and the English courts.

5. At the interlocutory stage, a claimant invoking jurisdiction must show a good arguable case, meaning that it has much the better argument on the available material. The court does not decide jurisdiction on the balance of probabilities or conduct a trial. Although appellate review remains restrained, less restraint is appropriate where the issue is the construction of written agreements, only one legal meaning can be correct, the background facts are substantially undisputed, and the jurisdiction ruling will not be revisited at trial.

• Court of Appeal (Civil Division): The broker’s appeal was dismissed. The court upheld the conclusion that the insurer had a good arguable case that the Terms of Business Agreement survived as a separate contract and that the English courts had jurisdiction: [2015] EWCA Civ 437.
• High Court, Commercial Court: Blair J held that the insurer had a good arguable case that the Terms of Business Agreement had not been superseded and that its English jurisdiction clause governed the dispute: [2014] EWHC 4169 (Comm).