Markel Bermuda Ltd v Caesars Entertainment, Inc.
| Jurisdiction | England & Wales |
| Judge | Mr Justice Bryan |
| Judgment Date | 09 July 2021 |
| Neutral Citation | [2021] EWHC 1931 (Comm) |
| Docket Number | Case No: CL-2021-000228 |
| Court | Queen's Bench Division (Commercial Court) |
[2021] EWHC 1931 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
IN THE MATTER OF AN ARBITRATION CLAIM
AND IN THE MATTER OF THE ARBITRATION ACT 1996
IN PUBLIC
Royal Courts of Justice
Rolls Building, Fetter Lane
London, EC4A 1NL
THE HON. Mr Justice Bryan
Case No: CL-2021-000228
David Scorey QC and Edward Brown (instructed by Clyde & Co LLP) for the Claimant
Vernon Flynn QC and Ben Woolgar (instructed by Latham & Watkins (London) LLP) for the Defendant
Hearing date: 5 July 2021
Judgment supplied to the parties in draft on 7 July 2021
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.
A. Introduction
The parties appear before the Court on the expedited trial of a Part 8 claim brought on 19 April 2021 by the Bermudian Claimant Markel Bermuda Limited (“Markel”/the “Insurer”), for a permanent anti-suit injunction (“ASI”) restraining the Defendant, Caesars Entertainment Inc. (“CEI”/the “Insured”) from prosecuting proceedings commenced against Markel (amongst other insurers) on 19 March 2021 in the District Court of Clark County, Nevada, USA or anywhere else, in breach of what Markel says is a valid and binding London arbitration agreement contained in the contract of insurance between Markel and CEI and/or seeking and/or obtaining an anti-suit injunction restraining Markel from pursuing and/or otherwise enforcing the London arbitration agreement in respect of any dispute between Markel and CEI under the contract of insurance.
The claim arises in the context of an underlying dispute between Markel qua insurer and CEI qua policyholder. CEI is a large casino-entertainment company in the USA which owns, manages and operates numerous properties throughout the United States. These include casinos, hotels, dining and entertainment venues, arenas, retail shops, race tracks, meeting and conference venues, and other locations that host large numbers of people.
Markel issued the following two policies to CEI in the underwriting period in question:
3.1. The “ Eldorado Policy” was issued by Markel to CEI under its former name, Eldorado Resorts Inc (“Eldorado”). CEI acquired Caesars Entertainment Corp. (“Caesars”) in July 2020 and renamed itself. The Eldorado Policy was issued under policy number 1394692- 10419-PRMAN-2019 for the policy period 1 May 2019 – 1 May 2020 and provided first-party property cover of US$5 million part of US$50 million xs US$25 million, subject to the terms, conditions, changes and amendments in the Eldorado Policy.
3.2. The “ Caesars Policy” was issued by Markel to Caesars under policy number 1406250- 11009-PRMAN-2019 for the policy period 1 December 2019 – 1 December 2020 and provided first-party property cover of US$12 million part of US$400 million xs US$100 million subject to the terms, conditions, changes and amendments in the Caesars Policy.
The dispute arises in circumstances where CEI claims an indemnity in respect of alleged property damage and business interruption (“BI”) losses arising out of COVID-19. As already noted, CEI has sued Markel (along with other excess insurers) in proceedings in the State District Court of Clark County, Nevada in the USA pursuant to a Complaint filed on 19 March 2021 (“the Nevada Proceedings”), in the case of Markel, in relation to the Eldorado Policy.
CEI accepts that the Caesars Policy, and policies issued by certain other insurers (specifically, it appears, including certain other Bermudian insurers), contain arbitration agreements and CEI recognises that those disputes stand to be arbitrated but denies that the Eldorado Policy does so. Those other insurers, and Markel in respect of the Caesars Policy, have not been sued in the Nevada Proceedings. More specifically Latham & Watkins, on behalf of CEI, stated the following in a letter dated 5 May 2021:
“CEI's business interruption insurance portfolio involves 76 policies across various attachment points. CEI carefully reviewed all of those 76 policies (and all related endorsements) prior to initiating the Nevada Proceedings – in material part to determine whether there was a provision requiring arbitration. That due diligence exercise resulted in the inclusion of 55 policies in the Nevada Proceedings that CEI determined were properly subject to suit in that court. Any policies containing agreements to arbitrate were not included within the scope of the Nevada Proceedings, meaning that insurers that had written those policies are not defendants to the Nevada Proceedings.”
It appears, therefore, from Latham & Watkins letter, that some 21 of the policies issued to CEI for the relevant period included arbitration agreements. It is also clear who at least some of those other insurers are, and that they include a number of Bermudian insurers. In this regard Marsh informed Eldorado on 30 April 2019 in an email timed at 6.51pm in relation to “the Bermudian insurers” as follows:-
“Good Evening Ms. Lepori,
Thank you for the renewal order and your continued support of the Bermuda markets. We have bound the following
markets and found their terms and conditions to be in accordance with your instructions. We have attached their
policies along with our overviews for your ease of reference.
Argo Re Ltd
Policy No: P136795
Chubb Bermuda Insurance Ltd
Policy No: CAPRI01232P10
Hamilton Re Ltd
Policy No: PX19-4029-01 / PX19-4029-02
Liberty Specialty Markets Agency Limited
Policy No: LSP0005029
Neon Underwriting Bermuda Ltd
Policy No: BNPD19AA458A
Oil Casualty Insurance Ltd
Policy No: P-101347-0519-00
XL Bermuda Ltd
Policy No: XLPRP 1288597 19
Markel Bermuda Limited
Policy No: TBD**
** Please note that Markel have confirmed coverage bound, their policy number and binding documentation will follow either later this evening or tomorrow morning.**”
None of these insurers save Neon Underwriting Bermuda Ltd and Markel have been sued in the Nevada Proceedings, and Markel submits, and I agree, that it is a reasonable inference that these other contracts of insurance with Bermudian insurers included arbitration agreements given the contents of Latham & Watkins' letter. It appears, therefore, that the preference of (at least these) Bermuda insurers is for arbitration. In relation to CEI, the evidence before me is that it is “ Eldorado's preference to have their policies governed by Nevada law and any disputes litigated in the USA” (per paragraph 11 of the witness statement of Ms Stephanie Lepori served on behalf of CEI) though it is clear enough from the above that CEI are willing to enter into arbitration agreements as part of their policies with insurers, and did so in respect of a number of Bermudian insurers for the excess coverage of which the Eldorado Policy formed part in the year in question.
Indeed, that is precisely what CEI did in relation to Markel itself in respect of policy periods both prior to, and after, the Eldorado Policy that is in issue. So far as the position in relation to Markel is concerned, the policies issued to CEI by Markel in previous and subsequent policy periods contained arbitration provisions. This was done, not by deleting the law and jurisdiction provisions forming part of the policy (which was based on what was supplied by CEI and would still state Nevada or some other US state law and jurisdiction) but by separate endorsement specifying New York law and London arbitration – i.e. the endorsement would override what was stated in the policy in terms of Nevada (or other US state) law and jurisdiction.
In this regard, and as is addressed by CEI in its Skeleton Argument and evidenced in the documentation before me, at various times, there have been three relevant entities on the CEI side. These are Isle of Capri Casinos Inc (“Capri”), Caesars Entertainment Corporation (Caesars) and Eldorado Resorts, Inc (Eldorado). Capri was acquired by Eldorado in May 2017. Then in July 2020 Eldorado bought Caesars and renamed itself CEI.
Mr Dorsey who served a witness statement on behalf of Markel's evidence is that Markel issued policies to Capri in 2015 and 2016, and to Eldorado and Capri in 2017 all of which included arbitration agreements. In 2018, no policy was issued by Markel to Eldorado or Capri. In 2019, and as already noted, two policies were issued: the Caesars Policy (which contained an arbitration agreement), and the Eldorado Policy that is under consideration (and in relation to which it is in issue whether there was an arbitration agreement). Whilst Markel does not raise any “course of dealing” type argument, Markel points out (as is self-evidently the case and common ground) that CEI has agreed to insurances both before and after the Eldorado Policy that contain London arbitration agreements, and the methodology by which this was achieved was by way of a particular endorsement rather than by amendment of the remainder of the policy wording.
By way of illustration of this methodology, the policy issued to Eldorado and Capri for 1 May 2017 to 1 May 2018 (i.e. a policy insuring Eldorado that preceded the Eldorado Policy for the period 1 May 2019 – 1 May 2020) included “this insurance shall be governed by and construed in accordance with the law of the state of Nevada and each party agrees to submit to the exclusive jurisdiction of the courts of the USA” but this was trumped by endorsement no.8 (the “Arbitration and Choice of Law Endorsement”) which provided that, “notwithstanding anything to the contrary in the Policy” any dispute would be determined by London arbitration under the provisions of the Arbitration Act 1996, and in the same endorsement...
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