General Star International Indemnity Ltd v Stirling Cooke Brown Reinsurance Brokers Ltd and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Langley : |
| Judgment Date | 17 January 2003 |
| Neutral Citation | [2003] EWHC 3 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2002 Folio 1085 |
| Date | 17 January 2003 |
[2003] EWHC 3 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Langley
Case No: 2002 Folio 1085
Mr A. Schaff QC and Mr R. Waller (instructed by Messrs Barlow Lyde & Gilbert) for the Claimant
Mr R. Millett (instructed by Messrs Eversheds) for the First Defendants
Hearing date : 5 th December 2002
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
The Hon. Mr Justice Langley
This is more film finance litigation. The court is concerned with matters of jurisdiction. It involves what is referred to as the Litto slate of films. For present purposes it suffices to record that the financing bank was Chase Manhattan Bank, the providers of shortfall insurance were Underwriters Reinsurance Company (URC) and URC was reinsured by (amongst others) Royal and Sun Alliance, Axa Reassurance SA, General Star International ("Genstar") and a retained line of URC. There were also cut through clauses entitling Chase to seek recovery direct from Reinsurers. The main covers were expressly subject to a non-exclusive Texas jurisdiction clause and to Texan law. The brokers concerned were Stirling Cooke Brown Reinsurance Brokers Limited ("SCB") and, although their role is a matter in issue, the English solicitors Richards Butler were concerned as advisers on the transaction to insurers and reinsurers.
There have been proceedings in New York. Axa sought a declaration of non-liability under its cover against Chase. Axa also made claims against SCB alleging fraudulent and negligent misrepresentations in the placement of the reinsurance. Chase made a claim under a working capital facility policy against Axa. The case was tried before Justice Gammerman and a jury from October 29 to December 6, 2000. Chase won and Axa lost not only against Chase but also in its claims over against SCB (and others). Chase has subsequently taken proceedings in Texas against both Axa and Genstar for payment under the reinsurance covers. Genstar was not a party to the New York proceedings. Nor were Richards Butler.
Following the jury's decisions on matters of fact Justice Gammerman prepared a judgment on some matters which were reserved to him as well as recording his reasons for certain rulings made in the course of the trial. It is a substantial and, if I may say so with unqualified respect, impressive document which plainly justifies SCB's submission that the Judge has a close and detailed knowledge and appreciation of the issues which were involved and, of course, of the questions of law which arose. In the present context it is relevant to note that in addressing the issues which arose on the claims made by Axa against SCB the Judge ruled that New York law was to be applied to them. He did so, I think it is fair to say, on the basis that Axa's contention for French law was to be rejected (Axa is a French company and a subsidiary of an English company) and neither Axa nor SCB (which is an English company) sought the application of English law rather than New York law, albeit there was a basis for suggesting that English law might well be the governing law for consideration of SCB's duty and liability. The jury found that SCB had not deceived Axa and Justice Gammerman ruled that there was insufficient evidence of a special relationship between Axa and SCB even to submit Axa's case of negligent misrepresentation to the jury. Axa is appealing the decision of Justice Gammerman and the Jury.
After an exchange of correspondence between lawyers, on 11 October of this year Genstar issued a Claim Form in this court against SCB and Richards Butler. The Claim Form was served on SCB on 14 October. The claims are for damages and indemnification for such liability as Genstar may have to Chase and/or URC under the Litto cover. The claim against SCB is based on an alleged common law duty of care to advise Genstar about the transaction derived from an assumption of responsibility and/or proximate relationship. The duty alleged and its breach are set out in paragraphs 60 and 61 of the Particulars of Claim. The claim against Richards Butler is based on an alleged retainer to act for reinsurers and/or a common law duty of care also based on an assumption of responsibility. Richards Butler have recently served a very full defence to the claim including a denial of any retainer or duty.
On 1 November, a week before its defence was due, SCB issued a complaint against Genstar in the Supreme Court of New York in which SCB sought declarations that Genstar was liable under the cover, that SCB was not liable to Genstar and "a preliminary and permanent injunction restraining Genstar from prosecuting" its claim against SCB in these proceedings in any forum other than New York.
On 11 November SCB then applied to this court for a stay of the claims made against it pending the determination by the New York court of its motion for an anti-suit injunction. SCB also sought an extension of time for its defence.
The matter came before Thomas J on 15 November on SCB's application for time to serve its defence. Thomas J expressed considerable surprise that SCB should be seeking an anti-suit injunction in New York rather than applying to this court for a stay of the proceedings on the ground of forum non conveniens pursuant to CPR Part 11 and the principles in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460. Thomas J was in effect faced with the question on a time summons whether this court or the New York court should first decide whether this court was the appropriate forum for Genstar's claim. Granted that all the parties before this court were...
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