Hamilton Corporate Member Ltd & Ors v Afghan Global Insurance Limited & Ors

An exclusion for loss directly or indirectly caused by “seizure” is not confined to seizure by a governing authority where the clause is syntactically divided and the qualifying words govern a separate provision. In insurance usage, seizure ordinarily includes forcible dispossession by lawful authority or overpowering force.

Clear policy language is not displaced by generalised market distinctions, asserted commercial purpose or evidence of standard forms. A property-damage reinsurance policy covering physical loss or physical damage does not ordinarily cover deprivation of possession without physical alteration or destruction. An exclusion may apply even where an insured peril was operating, if the excluded peril contributed directly or indirectly to the loss.

The reinsurers sought summary judgment on claims for declarations that they were not liable under two reinsurance policies covering a warehouse in Afghanistan. Anham counterclaimed for declarations that the reinsurers were liable for the warehouse’s loss after it was seized by the Taliban in August 2021.

The reinsurers argued that clause 4.2 excluded loss directly or indirectly caused by seizure and that the policies covered physical property damage, not deprivation loss. Anham argued that “seizure” was limited to seizure by a governing authority and that factual-matrix and market evidence required a trial. The central issues were the construction of clause 4.2 and whether the loss fell within the scope of cover.

1. Summary judgment. Applying Easyair Ltd v Opal Telecom Ltd and the authorities approving it, the court could determine a short point of construction summarily where the evidence was sufficient and no realistic prospect of success or compelling reason for trial existed. It was insufficient to suggest that further market or expert evidence might emerge.
2. Construction of clause 4.2. The clause contained three syntactically separate parts. The first excluded loss directly or indirectly caused by seizure and related perils. The second concerned loss caused by law, order, decree or regulation of a governing authority. The second part did not qualify the first. Reading it that way would render the first part substantially otiose.
3. Meaning of seizure. In the insurance context, “seizure” has a settled ordinary meaning covering forcible possession by lawful authority or overpowering force. It was therefore capable of including seizure by the Taliban. The surrounding words did not justify a restricted meaning under noscitur a sociis.
4. Factual matrix and commercial purpose. General distinctions between political violence and political risk insurance, references to other market wordings, and the known Taliban threat did not displace the clear language. The wording was materially different from the Institute War and Strikes Clauses Hulls–Time 1.11.95. There was no sufficient evidential basis for concluding that a linguistic mistake had occurred.
5. Nature of the cover. The reinsurance covered political violence risks and consequent physical property damage. It did not cover deprivation of possession without physical loss or physical damage. The references to repair, replacement and reinstatement did not alter that conclusion.
6. Interaction between insured and excluded perils. It was immaterial that an insured political violence peril might have been operating. Since the loss was caused by seizure, the exclusion applied, including because the wording extended to loss indirectly caused by seizure. Summary judgment was therefore entered for the reinsurers, with declarations of non-liability and dismissal of Anham’s counterclaims.

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