16/02/2021

Insurance litigation under the Recast Brussels Regulation [2021] LMCLQ 27

In a recent article, Patrick Dunn-Walsh discusses the Supreme Court’s decision in Aspen Underwriting Ltd v Credit Europe Bank NV (The Atlantik Confidence) [2020] UKSC 11 on the effect of the insurance contract provisions of the Recast Brussels Regulation, and the extent to which the Recitals can influence the interpretation of the grounds of jurisdiction found in the Regulation itself.

The case involved the deliberate scuttling of a Vessel, the Atlantik Confidence, at the direction of its Owners, and the Underwriters’ action to recover sums paid under an insurance policy in respect of the loss (in unjust enrichment or as damages for misrepresentation). Both Teare J and the Court of Appeal held that the defendant Bank (domiciled in the Netherlands) was not entitled to rely on the special insurance contract provisions contained in Section 3 of the Regulation. Despite the action relating to insurance, Teare J and the Court of Appeal held that the Bank was not a ‘weaker party’ and so was not entitled to the protection of Section 3.

The Supreme Court disagreed with this approach. It held that the existence of an unexpressed exception to Section 3 was inconsistent with the certainty and predictability that is a major objective of the Regulation, and that the EU case-law that had been relied on by the Courts below did not support that exception ‘s existence. Consequently, the defendant Bank was entitled to be sued in its home courts, the Netherlands.

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