Cigna Life Insurance Company of Europe SA-NV v Intercaser SA de Seguros y Reaseguros [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Morison J. |
| Judgment Date | 08 May 2001 |
| Date | 08 May 2001 |
| Court | Queen's Bench Division (Commercial Court) |
Queen's Bench Division (Commercial Court).
Morison J.
Graham Dunning (instructed by Holman Fenwick & Willan) for Cigna Life.
Cyril Kinsky (instructed by Barlow Lyde & Gilbert) for Intercaser.
The following cases were referred to in the judgment:
Circle Freight International Ltd (t/a Mogul Air) v Medeast Gulf Exports Ltd (t/a Gulf Export)UNK [1988] 2 Ll Rep 427.
Excess Insurance Co Ltd v Mander [1995] CLC 838.
General Reinsurance Corp v Forsakringsaktiebolaget Fennia PatriaUNK [1983] 2 Ll Rep 287.
Nsubuga v Commercial Union Assurance Co plcUNK [1998] 2 Ll Rep 683.
Trygg Hansa Insurance Co Ltd v Equitas Ltd [1998] CLC 979.
Wyndham Rather Ltd v Eagle Star and British Dominions Insurance Co LtdUNK (1925) 21 Ll L Rep 214.
Arbitration — Insurance — Reinsurance — Whether general words in reinsurance slip sufficient to incorporate arbitration clause by reference.
This was an application by an insurer, “Intercaser”, under s. 9 of the Arbitration Act 1996 to stay proceedings brought by reinsurers, “Cigna” and others.
Intercaser instructed brokers, “HSBC”, to obtain reinsurance on the London market for certain life and personal accident perils. Intercaser signed a reinsurance contract which it wished the underwriters in the UK to subscribe to. HSBC put forward a reinsurance slip referring to four different interests: death any cause, professional disability, absolute and permanent total disability and mental disability. The claimants variously agreed to reinsure losses under the relevant interests. The claimants sought a declaration that they were off risk at the end of 1997 and rectification of the policy wording. Intercaser said that the dispute should be referred to arbitration because the reinsurance slip contained a condition which provided: “All other terms and conditions as more properly defined by the Intercaser Reinsurance Contract” and that contract contained an arbitration clause which was wide enough to embrace the disputes between the parties. The first two claimants argued that they never accepted that wording which was not incorporated into the contract as evidenced by the slip and that the wording was not incorporated merely by a scratching of the slip.
Held dismissing the defendant's application:
1. Terms could be incorporated into an insurance or reinsurance contract (made when the slip was scratched) by reference to another document or documents. Thus if the slip stated that it was subject to the terms of the proposal form and the proposal form stated that it was subject to the company's usual conditions, then the terms of those usual conditions would be incorporated. ( Wyndham Rather Ltd v Eagle Star & British Dominions Insurance Co LtdUNK (1925) 21 Ll L Rep 214 applied.)
2. In the absence of words which expressly incorporated the arbitration clause, general words of incorporation were insufficient in this case because an agreement to arbitrate disputes was regarded as personal to the parties to the agreement and collateral to the main obligations. ( Trygg Hansa Insurance Co Ltd v Equitas Ltd [1998] CLC 979 applied.)
3. In any event the parties had not properly identified the document whose terms were to be incorporated. There was no such thing as the Intercaser reinsurance contract because that contract was not a contract until its terms were later agreed to.
4. The court could not infer that by signing the slip with a reference to the contract the parties were thereby intending those terms to be binding without further approval by the underwriters, nor that they intended the terms to be binding even though the underwriters had not approved them. The evidence showed a mutual intention to obtain underwriters' express approval.
Morison J:
1. This is an application to stay proceedings under s. 9 of the Arbitration Act 1996.
2. The proceedings have been brought by Cigna Life Insurance Co and others against Intercaser SA de Seguros y Reaseguros (“Intercaser”) arising from reinsurance arrangements made between the parties. Cigna contend that they agreed to reinsure Intercaser against certain life and personal accident perils by a contract contained in or evidenced by HSBC Gibbs reinsurance slip (“HSBC”). Whilst the slip referred to four different interests —“death any cause”, “professional disability”, “absolute and permanent total disability” and “mental disability”— the claimants variously agreed to reinsure losses...
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