Menu
A recent jurisdiction result - Common sense over chaos

News / / A recent jurisdiction result - Common sense over chaos

Catlin sought an order restraining Weyerhaeuser from pursuing proceedings before the District Court in the State of Washington, on the basis that the parties had agreed to refer the relevant disputes for resolution by arbitration in London Catlin and Weyerhaeuser were parties to an excess insurance policy (the Layer 4 Policy) The wording of the Layer 4 Policy provided alongside the heading Choice of Law and Jurisdiction for an NMA 1998 Service of Suit Clause (USA) and As per Lead Underlying Policy The Layer 4 Policy also provided under the Insuring Agreements clause that Catlin agreed to follow the terms of the Lead Underlying Policy except as may otherwise be endorsed to this PolicyThe NMA 1998 Service of Suit Clause stated that (1) in the event that Catlin failed to pay any amount claimed to be due hereunder then (2) then Catlin would submit to the jurisdiction of a competent court in the United States This clause did not, of itself, preclude Catlin from commencing an action in or transferring an action to the US Court The Lead Underwriting Policy, which the Layer 4 Policy followed, contained three endorsements that were relevant to the dispute-1nbspEndorsement 7 any dispute, controversy or claim arising out of or relating to the policy was to be determined in London under the Arbitration Act 19962nbspnbspEndorsement 8 provided for the construction and interpretation of the policy to be governed by the laws of the State of Washington in the USA3nbspnbspEndorsement 9 stated that Solely for the purpose of effectuating arbitration, in the event of the failure of the Company to pay any amount claimed to be due hereunder, the Company, at the request of the Insured, will submit to the jurisdiction of any court of competent jurisdiction within the United StatesIn resolving the dispute, the court stated that it was a matter of construction of the Layer 4 Policy as a whole It held that-a)nbspnbspThe Choice ofhellipJurisdiction was to be As per Lead Underlying Policy The Lead Underlying Policy provided for London arbitration pursuant to the Arbitration Act 1996 as per Endorsement 7 (see 1 above)b)nbspnbspThe wording of the Layer 4 Policy read in conjunction with the Lead Underlying Policy led to the conclusion that (i) if Catlin failed to pay any amount claimed to be due (see the wording of the NMA 1998 Service of Suit Clause above) and (ii) this was solely for the purpose of effectuating arbitration (see the wording of Endorsement 9 of the Lead Underlying Policy) then (iii) Catlin would submit to the jurisdiction of a competent court in the US In other words, provisions of (i) (iii) of this paragraph had to be read as being inferior to the headline provision for London arbitration (Endorsement 7) and provisions (i) (iii) applied in circumstances concerning the enforcement of an arbitration awardIn coming to that conclusions above, the court noted that-(i)nbspnbspThere was no conflict in the drafting and the court should not come to the conclusion that there was a conflict lightly ie the court would seek to read the various provisions of such a contract together in order to make it work and(ii)nbspnbspIt was an important factor that the result works commercially The alternative interpretation of the jurisdiction provisions proposed by Weyerhauser, that the London arbitration provision survived as a dispute resolution mechanism except when money was due, was chaotic It was quite simply unlikely that the parties, having negotiated a policy that sat within a number of excess layers of reinsurance, would have intended such a complexity, and that it was difficult to see why commercial parties would aim for such a result (it being certainlyhellipunusual)(iii)nbspnbspUpon hearing expert evidence on the law of Washington state (see Endorsement 8 above), the court concluded that the English law view above would have been no different if Washington state law had been appliedAs a result of the English court's decision above, Weyerhaeuser are unable to pursue Catlin in the courts of Washington State The decision is a useful reminder of the common sense and commercial approach taken by judges in interpreting policies and it is an important prompt for parties to be sure of what they have agreed, even in relation to the more boilerplate clauses

Related sectors:

Related services:

Related news & insights

Insights / Success with subrogation in the UAE

25-05-2021 / Insurance

Insurers often perceive subrogated recoveries as challenging and uncertain in this region and that can be true to some extent. 

Success with subrogation in the UAE

Insights / Insurance & Reinsurance guide 2021

25-01-2021 / Insurance

We are pleased to share with you Chambers and Partners 'Insurance & Reinsurance guide 2021', of which Simon Cooper is the contributing editor.

Insurance & Reinsurance guide 2021

Insights / Supreme Court checks out of Orient Express Hotel

19-01-2021 / Insurance

On 15 January 2020, the Supreme Court handed down its judgment in this test case that was initiated by the Financial Conduct Authority (“”FCA”) in order to determine a number of common coverage issues pertaining to the correct response of non-damage business interruption policies to the Covid-19 pandemic.

Supreme Court checks out of Orient Express Hotel

Insights / Decennial Liability in the UAE

05-10-2020 / Insurance

At its core, decennial liability is a form of strict liability imposed on architects, engineers and contractors in the case of total or partial collapse of a building or structure or defects found in the building or structure that threaten the structural integrity of the building.

Decennial Liability in the UAE

Insights / The Insurance and Reinsurance Law Review Eighth Edition

16-06-2020 / Insurance

We’re pleased to share with you the eighth edition of The Insurance and Reinsurance Law Review. Ince is a member of The Law Reviews (TLR) leading panel of contributors and the team this year led by Peter Rogan as the Editor, contributed to the following topics:

The Insurance and Reinsurance Law Review Eighth Edition

Insights / Chapter 15 - England and Wales

16-06-2020 / Insurance

The UK insurance and reinsurance industry is the largest in Europe and the fourth-largest in the world.

Chapter 15 - England and Wales

Quick links

The Legal 500 2021

“Very available and responsive to company developments in real time. Frank, clear advice – not just the ‘easy’ answer.”

The Legal 500 2022

“The solicitors who have handled our employment related issues are of the highest quality in terms of their specialist area of expertise, their professionalism and their approach to us as clients and as people. Special mention has to be made of Laura Livingstone. Laura became a key member of our team and felt more like a colleague than an external adviser – a colleague you could rely upon. Laura’s attention to detail, professionalism and responsiveness was second to none. Laura has come to know and understand us as individuals and this has enabled her to personalise her advice and even sometimes to preempt our future requirements. We have a very special and extremely valuable relationship with her and the firm.”

- The Legal 500

The Legal 500 2022

“Ince are an excellent “fit” with our specific needs. The firm has consistently provided a broad range of personnel-related advice and in our experience that advice has been consistently of the very highest professional standard: it has been timely, comprehensive, accurate and at a cost which is commensurate with the budget of an organisation of our size.”

- The Legal 500

The Legal 500 2022

“The firm has an unusually high degree of insight into the practices and policies required by the Gambling Commission as regards compliance with its own requirements and conditions – particularly Andrew Tait, derived from his previous in-house experience.”

- The Legal 500