Airbus S.A.S v Generali Italia S.P.A. & Or

A broadly worded exclusive jurisdiction clause covering disputes arising out of or in connection with an agreement ordinarily extends to substantive claims created by that agreement. Its scope is determined by construing the agreement as a whole and considering its commercial context, including related contractual arrangements where relevant.

At the jurisdiction stage, the claimant must establish a good arguable case. Where the claim is based on subrogation, the insurer is bound by legal obstacles affecting the assured’s right of action, including an applicable jurisdiction agreement. A possible future claim brought on an independent legal basis should not be determined hypothetically.

Airbus sought declarations concerning proceedings brought in Italy by insurers of Alitalia. The insurers had indemnified losses arising from an aircraft landing-gear incident and claimed against Airbus in tort under Article 2043 of the Italian civil code.

Airbus relied on an exclusive English jurisdiction clause in an Airframe Warranties Agreement. The defendants argued that the clause concerned only the transfer mechanism for warranty rights, not substantive warranty claims, and that the Italian tort claim was outside its scope.

The application under CPR 11 required the court to determine the proper construction of the clause and whether the subrogated Italian claim was connected with the Warranties Agreement.

1. Jurisdictional standard. The court applied the good arguable case test. The claimant had to provide a plausible evidential basis for the jurisdictional connection and establish that it had the better argument on the material available. The assessment remained subject to the limitations of an interlocutory process.
2. Construction of Clause 13.2. The clause covered “any disputes arising out of or in connection with” the Warranties Agreement. Its reference to disputes concerning the agreement’s existence, validity or termination did not narrow that broad language. The court construed the agreement as a whole, including its detailed warranty code and the fact that it created separate rights and obligations between Airbus and Alitalia.
3. The Warranties Agreement was not merely an assignment of rights under the Purchase Agreement. It granted new rights to Alitalia and operated as a separate agreement. The related Assignment Agreement did not form part of a contractual series requiring the Warranties Agreement to be construed by reference to it. The Purchase Agreement’s arbitration provisions were therefore not incorporated into the Warranties Agreement so as to exclude the English jurisdiction clause.
4. The alleged failure by Airbus to provide an aircraft with a non-defective component was sufficiently connected with the warranties. The Italian proceedings, although pleaded in tort, were based on subrogation to Alitalia’s rights and concerned the alleged defect and Airbus’s responsibility for it. They therefore fell within Clause 13.2.
5. The court declined to determine hypothetically whether a future independent, non-subrogated claim would fall within the clause. That claim had not been brought and its legal basis was uncertain. In any event, the existence of such a possible claim did not affect the jurisdiction applicable to the subrogated proceedings. An insurer exercising subrogated rights is bound by legal obstacles applicable to the assured, including the jurisdiction agreement.

Airbus had the better of the argument on each material issue. The insurers were bound by Clause 13.2 in respect of the subrogated Italian claims.