AIG Europe SA (formerly AIG Europe Ltd) & Ors. v John Wood Group Plc & Anor.

An excess insurance clause making disputes subject to the same law and jurisdiction as the primary policy operates only where the primary policy itself prescribes a law and jurisdiction. It does not adopt whichever law and forum might later result from litigation under a primary policy containing no such clause.

A clause combining mandatory governing-law language with a stipulation that a specified court “shall have jurisdiction” will ordinarily confer exclusive jurisdiction, despite omitting the word “exclusive”, where that construction serves its natural commercial purpose and no contrary indication exists.

The insured companies faced substantial pipeline-related proceedings in Alberta and sought defence costs and indemnity from insurers participating in a London-market excess liability programme. The insurers obtained anti-suit injunctions restraining the insureds from pursuing the Canadian coverage proceedings.

Jacobs J held in [2021] EWHC 2567 (Comm) that the Global Umbrella Policy and the First and Third Excess Policies conferred exclusive jurisdiction on the English court. The insureds appealed. The central questions were whether a clause adopting the law and jurisdiction of the primary policy applied when that policy contained no law or jurisdiction clause, and whether the separate jurisdiction provision in the Global Umbrella Policy was exclusive.

1. Appeals dismissed. The Court of Appeal was satisfied to a high degree of probability that each of the three excess policies in issue conferred exclusive jurisdiction on the English court. Continuing the Canadian proceedings was therefore a breach of contract: paras [66]–[68].

2. The primary policy jurisdiction clause applied only where the primary policy contained an express choice of law and jurisdiction. Its reference to “the same law and the same jurisdiction” contemplated a single law and forum identifiable from that policy. It did not refer to any law which a court might later select or to any court which a litigant might persuade to accept jurisdiction: paras [51]–[55].

   The contrary construction would make the applicable law depend on the forum and leave the clause incapable of application where the primary insurer paid without litigation, or where an excess-layer dispute had no equivalent under the primary policy. That uncertainty was thoroughly uncommercial. As the primary policy contained no law or jurisdiction clause, the provision had nothing on which to operate and did not conflict with the later clauses: paras [56]–[58].

3. Clause 11 of the Global Umbrella Policy conferred exclusive jurisdiction on the Commercial Court. Although it omitted the word “exclusive”, its mandatory governing-law language and the stipulation that the Commercial Court “shall have jurisdiction” indicated that English law and the identified English court were to govern all disputes. That construction served the clause’s natural commercial purpose and accorded with the consistent approach of English authority. Nothing in the policy pointed towards non-exclusive jurisdiction: paras [59]–[63].

4. The Global Umbrella Policy was issued in England. The exception for policies issued in Scotland referred to the place where the policy was issued, not to the address of the principal policyholder. The court would not manipulate the language of a standard term merely because a policyholder was Scottish: paras [64]–[65].

5. Where foreign proceedings breach an exclusive jurisdiction agreement, comity is ordinarily served by enforcing party autonomy. An injunction is normally appropriate unless damages are adequate or strong reasons justify refusal. Delay capable of wasting substantial effort and expense abroad may give comity greater weight, but no such consideration arose here: paras [8]–[11].

1. Court of Appeal (Civil Division): In [2022] EWCA Civ 781, dismissed the insureds’ appeals and upheld the anti-suit injunctions concerning the Global Umbrella Policy and the First and Third Excess Policies.
2. High Court, Commercial Court: In [2021] EWHC 2567 (Comm), Jacobs J held that the three policies conferred exclusive English jurisdiction and continued the injunctions restraining the Canadian proceedings. His refusal of relief concerning the non-AWAC Second Excess policies was not appealed.