Trade Indemnity Plc and Others v Forsakringsaktiebolaget Njord ; Same v Same
| Jurisdiction | England & Wales |
| Judgment Date | 07 July 1994 |
| Date | 07 July 1994 |
| Court | Queen's Bench Division (Commercial Court) |
Queen's Bench Division
Before Mr Justice Rix
Insurance - reinsurance contract - pre-contractual "obligation" - jurisdiction
A pre-contractual obligation not to misrepresent a risk under a reinsurance contract was not an "obligation" within the meaning of article 5.1 of the Lugano Convention as that article was concerned with the place where the contract was to be performed and not the place where it was made; accordingly the plaintiff could not take advantage of the exceptional jurisdiction provided under the article.
Mr Justice Rix so held in the Queen's Bench Division when dismissing two identical actions brought by 16 insurance and reinsurance companies and one Lloyd's syndicate against the defendant, Forsakringsaktiebolaget Njord, in liquidation, in respect of two contracts of reinsurance written in 1990 and 1991.
The defendants, a Swedish insurance company, went into liquidation subsequent to the contracts and investigations by the Swedish authorities revealed serious mismanagement and dubious underwriting practices. The plaintiffs, concerned that misrepresentation had been made to them when the contracts were being placed, sought to avoid both contracts.
The first action was brought in the English courts seeking, inter alia, declarations that the plaintiffs were entitled to avoid and had avoided the contracts and an order for repayment of all claims paid by them.
The defendants challenged the jurisdiction of the English court on the ground of forum non conveniens.
The Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of September 16, 1988, which extended the terms of the Brussels Convention of 1968, as amended, to the member states of the European Free Trade Association and which was incorporated into English law by section 3A of the Civil Jurisdiction and Judgments Act 1982, as inserted by section 1(1) of the Civil Jurisdiction and Judgments Act 1991, became effective in Sweden on January 1, 1993.
Accordingly the plaintiffs brought a second identical action seeking an alternative basis of jurisdiction in England under the terms of article 5.1 of the Convention. The defendants challenged that on the basis that article 2 of the Convention governed the second action and not article 5.1.
Article 2 of the Lugano Convention provides: "Subject to the provisions of this Convention, persons domiciled in a contracting state shall, whatever their nationality, be sued in the courts of that state…"
Article 5 provides: "A person domiciled in a contracting state...
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