The Weekly Roundup: The Arty Edition

• Published date: 12 July 2022
• Subject Matter: Corporate/Commercial Law, Insurance, Corporate and Company Law, Contracts and Commercial Law, Insurance Laws and Products
• Law Firm: 1 Chancery Lane
• Author: Mr Conor Kennedy and Dominique Smith

The team deals with two cases on jurisdictional matters this week; inconsistent choice of jurisdiction clauses, and the operation of the Italian Torpedo. But we were also interested to read that the family of a tourist allegedly kidnapped and murdered whilst on holiday in Mexico is to sue the tour operator and hotelier which supplied the holiday. The foundation of the claim seems to be a combination of the assertion that the hotel served the holidaymaker so much alcohol that he became highly intoxicated, and the lack of operational security cameras in the area. It will be interesting to see what the US courts make of the case, particularly on the question of causation, but for now it is sufficient to note that claims founded on lack of security within hotels seem to be on the increase of late, on both sides of the Atlantic and beyond.

The Art of the Deal: Court Appeal Gives Guidance on Inconsistent Choice of Jurisdiction Clauses

In AIG Europe SA v John Wood Group Plc [2022] EWCA Civ 781, the Court of Appeal considered the application of a "primary policy jurisdiction clause" under various insurance contracts.

Background

The Claimant insurers had applied for an anti-suit injunction restraining the Defendants from pursuing proceedings in Canada under the contracts, which at first instance Jacobs J had granted. The insurance contracts in question were policies of excess liability insurance forming part of an "insurance tower" covering losses up to '130 million, made up of a primary liability policy, together with further excess layers. Each excess policy was in a standard form "Market Reform Contract" format. One of the sections in such contracts particularised the parties' choice of law and jurisdiction.

Each excess policy at issue in the case contained two potentially conflicting clauses. The primary policy choice of law and jurisdiction clause (the "PPJC") provided for disputes to be subject to "the same law and the same jurisdiction as the primary policy", despite the fact that the primary policy itself did not specify any choice of law or jurisdiction. Later terms of the excess policies expressly provided for English law and jurisdiction, which posed at least the potential for conflict in the construction of the excess policies.

The Claimant insurers' application for the anti-suit injunction had been based on the English jurisdiction clauses in the excess policies. The Defendants argued that the applicable clause was the earlier PPJC clause from the Risk Details section, which had not specified English jurisdiction. As a consequence, the Defendants argued that there was no basis on which they should be prevented from issuing proceedings in Canada.

The Decision

Upholding the first instance decision of Jacobs J, Males LJ held that simply because the primary policy contained no clause dealing with law an jurisdiction (it was unnecessary to reiterate the now trite principles for construing contracts, set out in Wood v Capita [2017] UKSC 24), the PPJC had no application and there was therefore no conflict between the PPJC and the later clauses to be resolved. As such, there was no reason why the later clauses (providing for English jurisdiction)...