Hiscox Dedicated Corporate Member Ltd Syndicate 33 At Lloyd's Starr Managing Agents Ltd (t/a Syndicate CVS 1919) v Weyerhaeuser Company

Where an excess policy states that its jurisdiction is “As per Lead Underlying Policy”, that wording may incorporate an arbitration agreement in the underlying policy. A service of suit clause may concern enforcement of an arbitral award or payment obligation and need not contradict the incorporated arbitration agreement. The policy must be construed as a whole and by reference to its particular wording and context. Differences between service of suit clauses, including the absence of introductory wording referring to arbitration, do not necessarily prevent incorporation.

The insurers sought continuation of an interim anti-suit injunction restraining Weyerhaeuser from pursuing substantive insurance coverage proceedings in the United States. The dispute concerned whether the parties had agreed to arbitrate under a following-form excess liability policy.

The underlying policy contained an arbitration agreement and a service of suit endorsement. The excess policy referred to “Choice of Law and Jurisdiction” and stated “As per Lead Underlying Policy”, but also contained a different service of suit clause. Weyerhaeuser argued that the United States proceedings should continue and that the service of suit clause gave jurisdiction to the US courts. The central issue was whether the arbitration agreement had been incorporated into the excess policy and was inconsistent with its service of suit clause.

1. The interim anti-suit injunction was continued, unless Weyerhaeuser provided suitable undertakings to the English court having equivalent effect. The court was satisfied to a high degree of probability that the parties had agreed to arbitrate rather than litigate. The issue remained open to final determination at trial.

2. The words “As per Lead Underlying Policy”, appearing alongside the reference to jurisdiction, were sufficient to incorporate the arbitration agreement in the underlying policy. Express reference to the arbitration clause was not required.

3. The references to “Choice of Law and Jurisdiction” operated compendiously rather than as wholly separate provisions. The service of suit clause was concerned with enforcement and did not contradict the incorporated arbitration agreement. The policy had to be construed by giving effect to all its wording and in its particular commercial context.

4. The use of a different service of suit clause in the excess policy did not show that the parties intended to exclude the underlying arbitration agreement. Nor did the absence of the words referring to arbitration, which appeared in the underlying service of suit endorsement, alter that conclusion.

5. The court considered the analysis in Ace Capital Limited v CMS Energy Corp [2009] 1 Lloyd’s Rep. IR 414, where the role of a service of suit clause centred on enforcement. The decision in Oakley, Inc. v Executive Risk Specialty Ins. Co. 2011 WL 13137931 (C.D. Cal. Feb. 24 2011) was distinguishable because its wording and circumstances were not identical.