Guidant LLC v Swiss Re International SE and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Leggatt |
| Judgment Date | 29 April 2016 |
| Neutral Citation | [2016] EWHC 1201 (Comm) |
| Date | 29 April 2016 |
| Docket Number | Case No: CL-2016000100 |
| Court | Queen's Bench Division (Commercial Court) |
[2016] EWHC 1201 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Leggatt
Case No: CL-2016000100
CL-2016000101
Mr N Tse, Mr R KennellandMr R Thukral (of Brown Rudnick) for the claimant
Mr J Lockey QC (instructed by Kennedys) for the defendants
Hearing date: 29/4/2016
On these two applications being heard together, the claimant, Guidant, is asking the court to appoint a third arbitrator in each of two arbitrations.
The background in brief summary is that Guidant has incurred substantial liabilities in litigation in the United States involving claims for personal injury arising from the use of allegedly defective cardiac rhythm management devices, which Guidant manufactured. Guidant has claimed indemnities against such liabilities under insurance policies which it purchased for the 2004 policy year. For present purposes, three policies of insurance are relevant. The first was a policy placed with Markel (Bermuda). The second policy was placed originally with Zurich but has subsequently been transferred, as part of a larger transfer of business, from Zurich to the UK branch of Swiss Re International SE, which is the defendant to these two arbitration claims. The third relevant policy was placed directly with Swiss Re. It has been made clear by Mr. Lockey QC, who appears for the defendant on each of the two applications, that the UK branch of Swiss Re is part of the same legal entity.
All three insurance policies were written on the Bermuda form and are in identical terms, save for the limits of cover. Each policy contains an arbitration clause, which provides for the arbitration of disputes in London by a tribunal of three arbitrators. Each party has the right to appoint an arbitrator and the third arbitrator is to be appointed by the two party appointed arbitrators. The clause further provides that:
"In the event of a failure of the first two arbitrators to agree on a third arbitrator, either of the parties may apply to a Judge of the High Court for the appointment of a third arbitrator."
Guidant has referred its claims to arbitration and has appointed the same arbitrator in each of the three arbitrations. The insurers have appointed different arbitrators in each of the three arbitrations. In the arbitration against Markel, the two party appointed arbitrators have appointed as the third arbitrator — who by convention is also the chair of the tribunal — Mr. Michael Collins QC. In the other two arbitrations against Swiss Re, however, no agreement has been reached on the appointment of the third arbitrator.
The arbitrator appointed by Guidant has sought to insist that Mr. Collins should also be appointed as the third arbitrator in those two arbitrations. The arbitrators appointed by Swiss Re have refused to agree to the appointment of Mr. Collins and have instead, in each case, put forward a list of three names and invited the arbitrator appointed by Guidant to choose one of those names, which he has declined to do. There is no overlap between the two lists of names which the arbitrators appointed by Swiss Re have put forward.
An impasse has therefore been reached and Guidant has applied to the court seeking an order under s.18(3)(d) of the Arbitration Act 1996 to appoint Mr. Collins as the third arbitrator in the two arbitrations against Swiss Re. Swiss Re, for its part, opposes the appointment of Mr. Collins and asks the court to appoint a different arbitrator in each of the arbitrations in which Swiss Re is the respondent.
Although Swiss Re has suggested in its evidence that the facts and issues are unlikely to be the same in all three arbitrations, and although it is right to say that Swiss Re has sought to rescind one but not (so far) the other of the two contracts of insurance to which it is a party, applying a measure of reality there is bound to be a substantial overlap between the issues in all three arbitrations. It seems to me that that will inevitably be so in circumstances where the policies are in identical terms and cover the same risks (except as to the level of cover) and when, as the evidence adduced by Guidant indicates, all three policies were written upon the basis of the same application for insurance made by Guidant. In those circumstances, Guidant argues that it is highly desirable that there should be a common chair of the three arbitral tribunals. That is said to be desirable for three principal reasons. First, they say that it will reduce the risk of inconsistent decisions in the different arbitrations – consistency itself being an important aspect of justice. Second, it is said that having a common chair will reduce costs and delay by having a smaller total number of arbitrators and fewer calendars to co-ordinate. Third, it is argued that it will at least hold out the possibility (although Guidant accepts that this could only be done by agreement) of co-ordinating the procedure, or at least parts of the procedure, in the three arbitrations.
I would agree with Guidant that those are all objectively desirable goals and, if this were litigation, the court would almost...
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