Aspen Underwriting Ltd & Ors v Kairos Shipping Ltd & Ors

For jurisdictional purposes, a bank holding an equitable assignment and loss payable interest in an insurance policy is not thereby shown to be party to a settlement agreement or bound by its jurisdiction clause. Clear contractual identification of the parties is a strong indication that no other person is a party. A bank is bound by an assigned policy’s jurisdiction clause only if it sues on the assigned rights, or has clearly and precisely manifested consent to the clause.

A claim against a non-contracting bank for misrepresentations inducing an insurance settlement is a matter relating to tort under Article 7(2) of the Brussels Regulation where the harmful event occurred in England. A restitution claim based on mistake is not such a matter because it does not presuppose a harmful event.

Hull Underwriters sought to recover insurance proceeds paid after the loss of the vessel Atlantik Confidence. The Bank, domiciled in the Netherlands, challenged the English court’s jurisdiction under the Brussels Regulation.

The Underwriters argued that the Bank was party to a settlement agreement, bound by the policy’s exclusive jurisdiction clause, or subject to Article 7(2) as a defendant in tort. They also advanced claims for rescission, restitution and damages for misrepresentation. The central issues were whether the Bank had submitted to English jurisdiction and whether the claims fell within the Regulation’s insurance, contract or tort jurisdictional provisions.

1. Settlement Agreement. The Underwriters did not have the better of the argument that the Bank had authorised the Owners to settle the insurance claim on its behalf. The Bank’s letter of 5 April 2013 authorised payment to Willis and provided a discharge. It did not, by its terms or context, confer authority to settle the claim as the Bank’s agent.
2. The Settlement Agreement identified the parties as the Underwriters and the Owners and Managers, defined as the Assureds. Its references to the Bank described its mortgagee and loss-payee interests. Clauses 1, 3 and 5 did not show that the Bank was a party. Where an agreement unequivocally and exhaustively identifies its parties, it is impermissible to contradict that identification. The jurisdiction clause therefore did not bind the Bank.
3. Policy jurisdiction clause. An assignee enforcing assigned contractual rights is subject to the jurisdiction clause governing those rights. But the Bank had not sued on the policy. Its letter merely authorised payment to Willis and did not assert a demand for payment to the Bank or its order. Nor had the Bank expressly subscribed to, or clearly and precisely manifested consent to, the policy’s jurisdiction clause.
4. Insurance and tort jurisdiction. The phrase “matters relating to insurance” required a broad, common-sense assessment of the subject matter of the dispute. The Underwriters’ misrepresentation claim depended substantially on whether the loss was covered by the policy and whether the Underwriters were liable under section 55(2)(a) of the Marine Insurance Act 1906. It therefore related to insurance. However, the Bank was not the weaker party requiring the protection of Article 14, so that special jurisdictional rule did not apply.
5. The misrepresentation claim against the Bank was a matter relating to tort under Article 7(2), rather than a matter relating to contract under Article 7(1). The Bank was not a contracting party, and the settlement agreement’s factual connection with the claim did not make its subject matter contractual. The harmful event occurred in England, giving the court jurisdiction over the damages claim.
6. The restitution claim based on mistake was not a matter relating to tort, delict or quasi-delict. It did not presuppose a harmful event. The English court therefore had no jurisdiction over that claim, which would have to be pursued in the Netherlands.
7. Because service was effected on a defendant domiciled in a Member State under the Brussels Regulation, the Underwriters did not need to show a good arguable case on the merits merely to serve the Bank.

First-instance jurisdictional decision. No appellate history was stated in the judgment.