QBE Europe SA/NV v Generali España De Seguros Y Reaseguros
| Jurisdiction | England & Wales |
| Judge | Mr Justice Foxton |
| Judgment Date | 01 August 2022 |
| Neutral Citation | [2022] EWHC 2062 (Comm) |
| Docket Number | Case No: CL-2022-000322 |
| Court | Queen's Bench Division (Commercial Court) |
[2022] EWHC 2062 (Comm)
Mr Justice Foxton
Case No: CL-2022-000322
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Oliver Caplin (instructed by Stephenson Harwood LLP) for the Claimants
Saira Paruk (instructed by Herbert Smith Freehills LLP) for the Defendant
Hearing date: 26 July 2022
Approved Judgment
I direct that 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 HONOURABLE Mr Justice Foxton
This judgment was handed down by the judge remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be Monday 01 August 2022 at 14:00.
The Claimants ( QBE Europe and QBE UK and together QBE) seek an urgent anti-suit injunction ( ASI) to restrain proceedings brought by the Defendant ( Generali) against QBE UK in Spain, and to prevent Generali from commencing similar proceedings against QBE Europe. The proceedings in Spain assert a direct claim against QBE UK under a Spanish statute, by reference to a liability insurance policy ( the Policy) which QBE issued to High Definition Holding Ltd ( Owners), the owner of the yacht Motor Yacht Angara ( the Yacht).
QBE allege that those proceedings have been brought in contravention of a London arbitration agreement contained in the Policy, to which Generali's claim is subject, and that they should be restrained by an ASI. Generali denies that the claim it has brought in Spain is one which engages the London arbitration agreement and argues that there are a number of reasons why the court should refuse to grant an ASI in any event.
A THE BACKGROUND
On or about 1 June 2016, QBE UK's predecessor in title, QBE Insurance (Europe) Ltd, issued the Policy, which provided a policy of fixed premium P&I insurance to the Owners in respect of the Yacht.
On 1 November 2020, QBE Europe took over QBE UK's rights and obligations under the Policy via a transfer in accordance with Part VII of FSMA 2000 pursuant to the Order of Zacaroli J dated 21 October 2020. The effect of that transfer, at least as a matter of English law, is that QBE Europe has replaced QBE UK as the insurer under the Policy.
Clause 63 of the Policy contains what has been described as a multi-faceted dispute resolution and choice of law clause. This provides:
“63.2 Any other dispute or difference arising between the Insurer and the Assured under this policy shall in the first instance be referred to the Claims Committee for consideration and adjudication. Such reference shall be on written submissions only
63.3 If the Assured does not accept the decision of the Claims Committee, such difference or dispute shall be referred to the arbitration in London of two arbitrators (one appointed by the Insurer and the other by the Assured) and an Umpire to be appointed by the Arbitrators, and the submission to arbitration and the proceedings therein shall be subject to the provisions of the Arbitration Act 1996, and any statutory modification or re-enactment thereof for the time being in force.
63.4 This policy shall be governed by and construed in accordance with English law. […]”.
On 3 July 2016, there was an incident which appears to have caused damage to an undersea power cable linking the islands of Mallorca and Menorca, leading to hydrocarbon pollution to the local area. It has been alleged that the Yacht was the cause of that incident. The undersea cable was owned by Red Eléctrica de España ( REE). REE had the benefit of a property damage and civil liability insurance policy with Generali (as to 65%) and another insurer, pursuant to which it received an indemnity in respect of the loss caused by the incident in a sum said to amount to approximately EUR 7,700,000.
On 22 February 2021, Generali's Spanish lawyers, Herbert Smith Freehills Spain LLP wrote to QBE UK's Spanish lawyers, Albors Galiano Portales asserting the entitlement to bring a direct action claim and seeking payment. Stephenson Harwood LLP replied to that letter on 15 June 2021, challenging the merits of the asserted claim, stating that any claim would have to be brought in London arbitration and that ASI relief would be sought if there was any attempt to pursue the claim by other means.
Undeterred, on 23 February 2022, Generali commenced proceedings against QBE UK before the Court of First Instance of Madrid ( the Spanish Proceedings). QBE UK was served on 10 June 2022. The Statement of Claim ( SoC) served in the Spanish Proceedings proceeds as follows:
i) QBE UK was identified as “the civil liability insurer” of the Yacht.
ii) The damage to the cable, the losses suffered by REE as a result, and the basis for the allegation that the owners of the Yacht were legally liable to REE for causing the loss and damage, were then set out.
iii) The policy which REE had taken out with Generali, and the indemnity paid thereunder, were summarised.
iv) The steps taken to locate the owners of the Yacht and obtain details of their insurance cover were set out, with a summary of the exchanges with QBE UK's legal representatives.
v) The SoC then pleaded those terms of the Policy said to provide civil liability cover responding to the Owners' liability arising out of the damage to the cable. Section A clause 15, setting out the “perils covered”, was quoted, together with Section B clauses 40 and 53 (addressing insured value and damage to common property) and Section C clause 66 (lack of cover for liabilities, costs and expenses “covered by another policy”).
vi) The SoC asserted that the effect of the Policy was that “cover is established for the liability deriving from the damage caused by the vessel to REE's submarine power cable”, and that certain policy exclusions did not apply.
vii) It was then asserted that Generali was subrogated to REE's rights against QBE UK by virtue of section 43 of the Spanish Insurance Contracts Act 1980 ( the ICA).
viii) It was asserted that REE (and hence, by virtue of its rights of subrogation, Generali) had a direct claim against QBE UK by virtue of Article 465 of the Spanish Maritime Navigation Act ( the MNA 2014). That claim was said to be tortious in nature, with the result that the London arbitration clause in the Policy did not apply.
ix) Reliance was also placed on Article 1902 of the Spanish Civil Code (which creates a general liability to compensate for loss caused by acts or omissions undertaken negligently or with fault), principles of Spanish tort law and Article 18 of the Rome II Regulation.
x) It was asserted that the Spanish courts had jurisdiction.
B THE APPLICABLE LEGAL PRINCIPLES
Wholly contractual ASI applications
Most ASI applications are made by a party who asserts that both it, and the respondent to the application, are parties to an arbitration or jurisdiction agreement, and that the respondent has brought or is intending to bring proceedings against the applicant in breach of the arbitration or jurisdiction agreement.
I was referred to Jacobs J's summary of the key principles which govern the grant of anti-suit relief in this wholly contractual context in AIG Europe SA and Ors v John Wood Group Plc and Ors [2021] EWHC 2567 (Comm), [58] (which, to the extent it was in issue, was approved and further explained by Males LJ on appeal, [2022] EWCA Civ 781, [10]). The principles so summarised are as follows:
i) The court's power to grant an ASI to restrain foreign proceedings, when brought or threatened to be brought in breach of a binding agreement to refer disputes to arbitration, is derived from section 37(1) of the Senior Courts Act 1981, and it will do so when it is “just and convenient”.
ii) The touchstone is what the ends of justice require.
iii) The jurisdiction to grant an ASI should be exercised with caution.
iv) The injunction applicant must establish with a “high degree of probability” that there is an arbitration or jurisdiction agreement which governs the dispute in question.
v) The court will ordinarily exercise its discretion to restrain the pursuit of proceedings brought in breach of a forum clause unless the defendant can show strong reasons to refuse the relief (relying on Aggeliki Charis Compania Maritima SA v Pagnan SpA (The Angelic Grace) [1995] 1 Lloyd's Rep 87).
vi) The defendant bears the burden of proving there are strong reasons.
By way of further elaboration of those last two points:
i) It has been held that respect for comity is not a strong reason for the court not to give effect to a contractual choice of forum clause, and that comity requires that where there is an agreement for a sole forum for the resolution of disputes under a contract, that agreement is respected: Males LJ in AIG Europe, [8]. By way of parenthesis, in that context, comity is served by applying the same respect to choice of court or arbitration agreements in favour of other jurisdictions and arbitral seats.
ii) It has been held that the existence of a mandatory provision of foreign law applicable in the foreign court which overrides the contractual choice of jurisdiction is not a strong reason to refuse an ASI: Shipowners' Mutual Protection and Indemnity Association (Luxembourg) v Containerships Denizcilik Nakliyat ve Ticaret (The Yusuf Cepnioglou) [2016] EWCA Civ 386, [34]–[37] and [57]–[58] and Thomas Raphael QC, The Anti-Suit Injunction (2 nd) ( Raphael), [8.31] – [8.44].
So-called “quasi-contractual” ASI applications
There are ASI applications which do not share the feature identified in [9] above – either because the claimant denies that it is party to the contractual choice of jurisdiction in...
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