Jordan Grand Prix Ltd v Baltic Insurance Group and Others ; Baltic Insurance Group v Jordan Grand Prix Ltd and Others
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ROBERT WALKER,LORD JUSTICE OTTON,LORD JUSTICE STAUGHTON |
| Judgment Date | 24 October 1997 |
| Judgment citation (vLex) | [1997] EWCA Civ J1024-7 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | QBCMI 96/1717/B |
| Date | 24 October 1997 |
[1997] EWCA Civ J1024-7
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(Mr Justice Langley)
Royal Courts of Justice
Strand
London WC2
Lord Justice Staughton
Lord Justice Otton
Lord Justice Robert Walker
QBCMI 96/1717/B
(By Original Action)
(By Counterclaim)
MR A TRACE (Instructed by LeBoeuf, Lamb, Greene & MacRae, London EC3R 7AA) appeared on behalf of the Appellant
MR R SOUTHERN (Instructed by Cameron Markby Hewitt, London EC3N 4BB) appeared on behalf of the Respondents
Friday 24th October, 1997
This is an appeal with the leave of the judge against an order of Langley J, made on 15th November last, declaring that the Court has no jurisdiction over a claim by the plaintiff by counterclaim, Baltic Insurance Group ("Baltic"), against the 6th, 7th and 8th defendants to counterclaim, Quay Financial Software Ltd ("Quay"), Mr Dermot Desmond and Mr Gerard Giblin. The appeal raises a number of issues arising on or in connection with Article 11 of the Brussels Convention, which is set out in Schedule 1 to the Civil Jurisdiction and Judgments Act 1982.
These issues arise in unusual circumstances which I must summarize briefly, basing my summary on the judgment below. The plaintiff in the original action, Jordan Grand Prix Ltd ("Jordan"), is an English company engaged in Formula 1 motor racing. It is based at Silverstone in Northamptonshire. It ran a team which competed in the 1994 FIA Formula 1 world championship. Jordan claims that it had an agreement with its employees to make bonus payments to them if the team finished in the first six of the 1994 Constructors' World Championship, and it sought to cover its exposure to that contractual liability by insurance.
Baltic is a Lithuanian company with, as is pleaded in the Statement of Claim and admitted in the defence, a managing agent in Belgium; a Belgium company named Compagnie d'Investissements Universelle ("CIU"). Jordan's primary case is that the requisite insurance cover was effected with Baltic through CIU and with the participation of another intermediary, also a Belgium company, Special Risks Insurance SA ("SRI"). Jordan has a secondary claim against SRI.
Quay is an Irish company dealing in computer software. Mr Desmond and Mr Giblin are directors of Quay and claim to be domiciled in the Republic of Ireland. Quay claims that it entered into a sponsorship contact with Jordan under which Jordan would promote Quay's software and Quay would pay Jordan US $1m if its team finished in the top six, or a smaller sum if the team finished 7th, in the 1994 Constructors' World Championship. Quay's case is that this also was covered by Baltic through SRI and CIU.
In the event Jordan finished 5th in the 1994 Constructors' World Championship. Baltic declined to pay under the main cover on which Jordan relies (although the Statement of Claim pleads that Baltic did make some payments under another part of the cover, relating to points scored during the course of the Championship). Baltic's case was that neither the employees' bonus agreement nor the sponsorship agreement was genuine. Baltic alleged a conspiracy by Jordan, Quay and others to defraud Baltic and counterclaimed for declarations and damages.
That is the background to the writ issued on 26th January 1995 by Jordan initially against three defendants, namely Baltic, Kobe Reinsurance SA ("Kobe"), and Dai Ichi Kyoto Reinsurance SA ("Kyoto"). Kobe and Kyoto are Belgian companies carrying on insurance and reinsurance businesses in Belgium. They were sued as being reinsurers directly liable under a 'cut-through' clause. Later SRI was joined as a 4th defendant by amendment.
On 24th May Baltic put in its defence and counterclaim alleging conspiracy and fraud. There were 12 defendants to the counterclaim. As well as being made against Jordan the counterclaim was made against various individuals associated with Jordan; against Quay and its directors (Mr Desmond and Mr Giblin); against SRI and its director Mr Henry Braun, and against Kobe and Kyoto. I should perhaps add that Mr Desmond is alleged to have been a close associate of Mr Edmund Jordan, who is a director of Jordan and the 2nd defendant to counterclaim. Mr Giblin is said to have signed the impugned sponsorship agreement on behalf of Quay.
On 30th May 1995, before the counterclaim had been served on Quay, Mr Desmond or Mr Giblin, Quay served proceedings in the Belgian Court against SRI, Baltic and CIU.
In his judgment Langley J recorded that under their amended summons under RSC Order 12, rule 8. Quay relied on Articles 11, 21 and 22 of the Brussels Convention, and Mr Desmond and Mr Giblin on Articles 11 and 22. The judge recorded that in view of time restraints:
"it was agreed that the hearing and so this judgment should be limited to the issues which arise under Article 11 only. Both parties have, with my agreement, fully reserved their rights as regard Articles 21 and 22 so that they may consider the position in the context of this judgment and any appeals there might be from it."
Section 3 which contains Articles 7 to 12A of the Convention deals with jurisdiction in "matters relating to insurance". Mr Trace, who has appeared in this court, as he did below, for Baltic, reserved the right to contend that the counterclaim by Baltic was not such a matter, but in the court below he did not press that point. In this court he has developed the point at a little length though not at great length. For my part I think Mr Trace was right not to press the point below. It seems to me that as the judge said,
"the whole issue between the parties arises from the alleged insurance and whether it is binding and effective."
The general scheme of Section 3 of the Convention is that Article 7 introduces the special regime as to jurisdiction in matters (relating to insurance, without prejudice to Articles 4 and 5(5) relating to defendants not domiciled in a contracting state, and to branches, agencies or other establishments). Article 8 regulates where an insured, domiciled in a contracting state, may be sued. Articles 9 and 10 confer additional jurisdiction in claims against insurers in respect of liability insurance and insurance of immovable property. Articles 12 and 12A regulate the extent to which the provisions of the section may be excluded by agreement. Article 12(4) and (5) and Article 12A were added on the occasion of the accession of the United Kingdom, as was described by Lloyd LJ in New Hampshire Insurance v Strabag Bau [1992] 1 LR 361, at 367. That is the legislative context in which Article 11 appears. Subject to an irrelevant qualification which I omit, Article 11 is in the following terms:
"…an insurer may bring proceedings only in the courts of the Contracting State in which the defendant is domiciled, irrespective of whether he is the policy-holder, the insured or the beneficiary.
The provisions of this Section shall not affect the right to bring a counterclaim in the court in which, in accordance with this Section, the original claim is pending."
Apart from the scope of "matters relating to insurance", which I need not go into further, the judge considered three issues:
(1) Is Article 11 limited to an insurer which is itself domiciled in a contracting state?
(2) Does the right of Baltic (as a defendant insurer) to counterclaim extend to a counterclaim which joins Quay, Mr Desmond and Mr Giblin (among others) as co-defendants, with Jordan, to the counterclaim?
(3) Does the fact that Mr Desmond and Mr Giblin are not policy-holders, insured persons or beneficiaries (but are directors of Quay and alleged conspirators) mean that Article 11 does not apply to them?
That is not the...
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