European Re v AEGIS
| Jurisdiction | UK Non-devolved |
| Judge | Lord Hobhouse of Woodborough |
| Judgment Date | 29 January 2003 |
| Neutral Citation | [2003] UKPC 11 |
| Docket Number | Appeal No. 93 of 2001 |
| Date | 2003 |
| Year | 2003 |
| Court | Privy Council |
[2003] UKPC 11
Present at the hearing:-
Lord Bingham of Cornhill
Lord Hoffmann
Lord Hobhouse of Woodborough
Lord Millett
Sir Christopher Staughton
Privy Council
[Delivered by Lord Hobhouse of Woodborough]
This appeal concerns the scope of the principle of privacy in commercial arbitration. The parties are two insurance companies. By an agreement dated 31 March 1980 Associated Electric & Gas Insurance Services Ltd of Hamilton Bermuda, a company incorporated under the laws of Bermuda, ("Aegis") entered into an automatic facultative reinsurance agreement with European Reinsurance Company of Zurich ("European Re"). The agreement included an arbitration clause providing for a panel of three (two arbitrators and an umpire) with Bermuda as the situs of the arbitration. Two separate disputes regarding the obligation of European Re to indemnify Aegis were referred to arbitration under this clause. The first in time was referred to a panel chaired by Mr Stewart Boyd QC which issued a speaking award (entitled "First Partial Award", but in fact final and decisive of the critical dispute in that arbitration) dated 19 January 2000. The second dispute was referred to a differently constituted panel chaired by Miss Phillippa Rowe. In the Rowe arbitration, European Re want to rely upon the award in the Boyd arbitration. Aegis contend that they are not at liberty to do. Aegis submit that European Re may not show any part of the Boyd award to the Rowe arbitrators as it would breach the confidentiality of the Boyd arbitration. Aegis obtained an ex parte injunction to restrain European Re. European Re applied to discharge the injunction. Mr Justice Dennis Mitchell refused the application and continued the injunction. European Re appealed. The Court of Appeal allowed the appeal and discharged the injunction. Aegis have appealed to your Lordships' Board seeking the reinstatement of the injunction. Both before the Court of Appeal and before this Board appropriate steps were taken to protect the claimed confidentiality pending the decision of the appeal.
The injunction restrained European Re "from disclosing any part of the First Partial Award dated 19 January 2000 rendered by Stewart Boyd QC, Thomas V A Kelsey and Francois Negrier to any third party including the arbitral tribunal consisting of Phillippa C Rowe, Caleb L Fowler and John Butler". Aegis have to demonstrate that they are entitled to this injunction.
Aegis is a mutual insurance company. Its business is to issue excess of loss liability policies to its members, mostly United States utility companies. From about 1978 to 1984, it took out reinsurance cover with European Re. In 1978 and 1979 this was done by way of specific facultative certificates; from January 1980 it was done under an "Automatic Facultative Reinsurance Agreement". This was the agreement which contained the arbitration clause under which both of the arbitrations were held. It provided:
"Article X ARBITRATION
Any disputes arising out of this agreement or concerning its interpretation or validity shall be resolved on a friendly basis and in accordance with current reinsurance practice rather than strictly according to the letter of the law.
All such disputes shall be referred to a Court of Arbitration which shall consist of two arbitrators, one to be appointed by each party, and an umpire who shall be appointed by the arbitrators before they have studied the case material. The arbitrators and the umpire shall be active or retired officials of companies or underwriters carrying on a similar type of insurance or reinsurance business to that covered hereunder.
If either party fails to appoint an arbitrator within three weeks after being requested in writing by the other party to do so, or in the event of the arbitrators failing to agree as to the appointment of the umpire within an identical period after their own appointment, such arbitrator or umpire shall be appointed by the Secretary General at the time of the Court of Arbitration of the International Chamber of Commerce at the written request of either party.
The procedure shall be at the discretion of the Court of Arbitration appointed for a particular dispute, whereby it shall dispense as far as possible with all legal formalities. It shall pronounce on the distribution between the parties of costs and charges. The ruling of the Court of Arbitration shall be in writing, stating the reasons for its decision and be signed. If one of the arbitrators refuses to sign the decision, this shall have no bearing on its validity. The decision shall be reached within three months after the constitution of the Court of Arbitration.
Otherwise the stipulations of the law of the country in which the Company is domiciled shall be applicable to this arbitration clause and to the agreement of which this clause forms a part, and the appointed Court of Arbitration shall have its situs in that same country."
This clause, besides providing for disputes to be referred to arbitration also contained provisions stating on what basis those disputes should be determined. Thus the first paragraph provides that it shall be "in accordance with current reinsurance practice rather than strictly according to the letter of the law" and the final paragraph provides that "otherwise" the law of the country in which "the Company" is domiciled is to be applied, that is to say, Aegis and the law of Bermuda. The correct interpretation and application of these provisions was an important and, in the submission of European Re, a critical and ultimately decisive dispute in the first, the Boyd, arbitration between Aegis and European Re. It is the dispute which is dealt with and determined in the relevant paragraphs of the Boyd award. What European Re say is that the same dispute has again been raised on the pleadings in the second, the Rowe, arbitration between the same parties. The purpose and effect of the injunction obtained by Aegis was to stop European Re referring to the award in which the Boyd arbitrators had decided the issue and thereby preclude European Re from raising a plea of issue estoppel in the second arbitration.
Aegis raise two arguments in support of the injunction. First they say that to disclose the Boyd Award or any part of it to the Rowe arbitrators would involve a breach both of the ordinary principles of the privacy of arbitrations and more specifically of the stipulations of an express agreement made during the Boyd arbitration itself. Second, although they do not challenge the bona fides of European Re, they submit that the plea of issue estoppel is so lacking in merit that it is an abuse of process to raise it in the Rowe arbitration and negatives any justification for referring to it in that arbitration.
Confidentiality:
In support of their claim to be entitled to the injunction Aegis relied upon the general principle of privacy in arbitration proceedings: Dolling-Baker v Merrett [1990] 1 WLR 1205, analogous to the duty of secrecy as between banker and customer. But, more particularly, they relied upon an express provision which had been included in agreed procedural directions given in the Boyd arbitration on 6 February 1998. This provision thus represented both the agreement of the parties, Aegis and European Re, and the direction of the arbitrators. The directions were signed both by the parties and by the arbitrators. The provision read:
"Confidentiality
30. The parties, their lawyers, and the Court of Arbitration agree as a general principle to maintain the privacy and confidentiality of the arbitration. In particular they agree that the contents of the briefs or other documents prepared and filed in the course of this proceeding, as well as the contents of the underlying claim documents, testimony, affidavits, any transcripts, and the arbitration result will not be disclosed at any time to any individual or entity, in whole or in part, which is not a party to the arbitration between AEGIS and European Re.
31. The parties acknowledge that certain AEGIS' claims documents and information, such as coverage opinions and communications with defense counsel, may be subject to attorney-client, work product, and or other privileges and immunities. Any disclosure by AEGIS to European Re of such documents and information will be made with the expectation of privacy and for the sole purpose of this arbitration. By disclosure of underlying claims information to European Re for this purpose, AEGIS does not intend to waive, nor should be construed to waive, any privilege that may apply to such documents and information as to third-parties to this dispute.
32. It is understood that, despite this confidentiality agreement, parties to this arbitration may consult with their experts and share necessary information with those experts and that parties to this arbitration may contact, interview, and request documents from non-parties. It is understood that any documents obtained from third parties must be produced to the other party in order to be submitted to the Court of Arbitration.
33. In the event members of the Arbitration Tribunal retire and new members are appointed, information described in paragraphs 30 and 31 above can be shared with the new Court of Arbitration without violating the confidentiality provision.
34. If either party receives a subpoena from anyone seeking information concerning this arbitration, notice of that subpoena shall be provided immediately to lawyers for the other party so as to afford the opposing party the opportunity to oppose or seek protection from such subpoena.
35. Nothing in this Order shall be construed to preclude European Re from reporting to its retrocessionaires, compliance...
To continue reading
Request your trial
-
PJSC National Bank Trust v Boris Mints
...of Lord Hobhouse in the Privy Council in Associated Electric and Gas Insurance Services Ltd v European Reinsurance Co of Zurich [2003] UKPC 11. The immediate issue in that case was whether the arbitral obligation of confidentiality prevented a party to one arbitration from relying on the a......
-
The London Steam-Ship Owners' Mutual Insurance Association Ltd v The Kingdom of Spain
...vexari pro una et eadem causa. The former is public policy and the latter is private justice.’ 262 Similarly in AEGIS Ltd v European Re [2003] 1 WLR 1041, Lord Hobhouse, giving the advice of the Privy Council, stated that estoppels ‘can be described as rules of evidence or as rules of publ......
-
Moscow City Council v Bankers Trust Company and Another
...issue on this appeal, although delivered in a context lacking the added impetus of CPR 62.10. In contrast, in Aegis Ltd. v. European Re [2003] UKPC 11; [2003] 1 WLR 1041, the Privy Council mentioned Bermudan arbitration legislation which expressly empowers courts to hear proceedings under s......
-
Nomihold Securities Inc. v Mobile Telesystems Finance SA
...to refer is English law then it is common ground that, as stated by Lord Hobhouse in AEGIS Ltd v European Re-insurance Co of Zurich [2003] 2 CLC 340; [2003] 1 WLR 1041 (PC) at paragraph 9, 'it is an implied term of an arbitration agreement that the parties agree to perform the award'. 52. ......
-
International Arbitration 2016
...appeal from Bermuda under the 1993 Act) in Associated Electric & Gas Insurance Services Ltd. v European Reinsurance Co. of Zurich [2003] 1 WLR 1041. 11.5 What is the standard for refusing enforcement of an arbitral award on the grounds of public The court has discretion not to enforce a......
-
International Arbitration 2021
...Bda LR 1, and see the Privy Council decision Associated Electric & Gas Insurance Services Ltd v European Reinsurance Co. of Zurich [2003] 1 WLR 1041). The extent of any exceptions to the confidentiality rule has yet to be considered in Bermudian case 10. The Award 10.1 Legal Requirements Ar......
-
International Arbitration 2021
...Bda LR 1, and see the Privy Council decision Associated Electric & Gas Insurance Services Ltd v European Reinsurance Co. of Zurich [2003] 1 WLR 1041). The extent of any exceptions to the confidentiality rule has yet to be considered in Bermudian case 10. The Award 10.1 Legal Requirements Ar......
-
West Tankers 2012: Pro-Arbitration Through Enforcement Of Declaratory Awards
...Tankers Inc [2012] EWCA Civ 27 at [26]. 33 Associated Electric and Gas Insurance Services Limited v European Reinsurance Co of Zurich [2003] 1 W.L.R. 1041. 34 National Ability SA v Tinna Oils and Chemicals Ltd [2009] EWCA Civ 1330; [2010] 1 Lloyd's Rep. 35 Section 103 of the Act incorporate......
-
Arbitration
...Co of Israel v Steuart J Mew[1993] 2 Lloyd”s Rep 243; Ali Shipping Corp v Shipyard Trogir[1999] 1 WLR 314 and AEGIS v European Re[2003] 1 WLR 1041) to that of the Australian High Court in Esso Australia Resources Ltd v Plowman(1995) 128 ALR 391. 3.71 Her Honour”s view is consistent with the......
-
Arbitration
...Privy Council on appeal from Bermuda in Associated Electric and Gas Insurance Services Ltd v European Reinsurance Co of ZurichWLR[2003] 1 WLR 1041 and John Forster Emmott v Michael Wilson & N Partners LtdUNK[2008] 2 All ER (Comm) 193) which recognised an implied obligation of confidentialit......