Abstract

Article

Cover of Defence Costs of  Non-covered Claims

Where common costs are incurred in the defence of both covered and uncovered claims they are indemnifiable: see e.g. New Zealand Forest Products Ltd. v New Zealand Insurance Co Ltd. [1997] 1 WLR 1237; Catlin Syndicate Limited (Lloyds Syndicate 2003) v AMEC Foster Wheeler USA Corporation [2020] EWHC 2530 (Comm).

 

Application for Injunction Without Notice

The court should not entertain an application for an injunction of which notice has not been given unless notice would enable the repondent to take steps to defeat its purpose, or there has been literally no time to give it before the injunction is necessary to prevent the threatened act. National Commercial Bank of Jamaica v Olint Corpn Ltd. [2009] UKPC 16. The applicant must also make full and frank disclosure to the court, so that it would be impermissible to apply without drawing its attention to a relevant written jurisdiction agreement. Catlin Syndicate Limited (Lloyds Syndicate 2003) v AMEC Foster Wheeler USA Corporation [2020] EWHC 2530 (Comm).

A without notice applicant has a duty of full and frank disclosure of all facts, known or which on proper inquiry should be known to the applicant, which are objectively material for the judge to know in dealing with the application. It is strict: Brink's Mat Ltd v Elcombe [1988] 1 WLR 1350 ,1356-1357. Konamaneni v Rolls Royce Industrial Power (India) Ltd [2002] 1 WLR 1269. Materiality therefore varies with the nature of the application and the matters relevant to be known by the judge when hearing it. But this does not include points against him which have not been raised by the other side and in respect of which there is no reason to anticipate that the other side would raise such points if it were present. MRG (Japan) Ltd v Engelhard Metals Japan Ltd [2003] EWHC 3418 (Comm).  And despite a breach, the Court retains a discretion to continue or re-grant the order if it is just to do so, particularly if it is innocent. OJSC ANK Yugraneft v Sibir Energy [2008] EWHC 2614 (Ch).

Unless any non-disclosure is substantial the applicant’s contractual right to be sued in thejurisdiction rather than the foreign court, and he absence of strong reasons to permit the continuation of the proceedings there are influentialfactors supportingan injunction. Catlin Syndicate Limited (Lloyds Syndicate 2003) v AMEC Foster Wheeler USA Corporation [2020] EWHC 2530 (Comm).

Speedy Relief for Paymnt of Defence Costs

By an expedited hearing and summary judgment an insured can  obtain effective and speedy relief, including an interim payment, if the insurer wrongly refuses to pay defence costs in respect of underlying litigation if  the court is satisfied that if the claim went to trial the claimant could obtain judgment for a substantial sum of money. Poole Harbour Yacht Club Marina Ltd. v Excess Marine Insurance Ltd. [2001] Lloyd's Rep IR 580; Catlin Syndicate Limited (Lloyds Syndicate 2003) v AMEC Foster Wheeler USA Corporation [2020] EWHC 2530 (Comm).

Anti-Suit Injunction

Principles

The Court may grant an interim injunction when it is just and convenient to do so,  either unconditionally or on such terms and conditions as the court thinks just, but with caution: Société Nationale Industrielle Aérospatiale v Lee Kui Jak [1987] UKPC 12, [1987] AC 871, not refraning from doing so but doing so only with circumspection. The "Angelic Grace" [1995] 1 Lloyd's Rep 87.  The test is the ends of justice: Emmott v Michael Wilson & Partners Ltd [2018] 1 Lloyd's Rep 299. The Court has jurisdiction to restrain foreign proceedings in breach of a binding agreement to refer disputes to arbitration: Ust-Kamenogorsk Hydropower Plant JSC v AES Kamenogorsk Hydropower Plant LLP [2013] 1 WLR 1889 (SC). The applicant must show a negative right not to be suedwith a high degree of probability that there is an arbitration agreement governing the dispute: Emmott (supra); Bankers Trust Co v PT Mayora Indah (unreptd) 20 January 1999; American International Specialty Lines Insurance Co v Abbott Laboratories [2003] 1 Lloyd's Rep 267 Ecobank v Tanoh [2016] 1 WLR 2231. Proceedings brought in breach of an arbitration clause will ordinarily be restrained unless the respondent can meet the onus of showing strong reasons to the contrary: The Angelic Grace [1995] 1 Lloyd's Rep 87; The Jay Bola [1997] 2 Lloyd's Rep 279 (CA) Donohue v Armco Inc [2002] 1 All ER 749 at [24]-[25]; The Epsilon Rosa [2003] EWCA Civ 509; Times Trading Corporation v National Bank of Fujairah (Dubai Branch) [2020] EWHC 1078 (Comm); Mobile Telecommunications Co Ltd v HRH Prince Hussam Bin Saudi Bin Abdulaziz Al Saud [2018] EWHC 1469 (Comm); Catlin Syndicate Limited (Lloyds Syndicate 2003) v AMEC Foster Wheeler USA Corporation [2020] EWHC 2530 (Comm).

The court will ordinarily protect the integrity of a contractual bargain once it is satisfied, to a high degree of probability, that there is a valid jurisdiction clause to which the parties have agreed. Further, if in breach of contract proceedings are commenced in a jurisdiction different from that to which the parties have agreed, it will probably cause irremediable prejudice which often cannot be satisfactorily compensated by damages. The applicant could be put to the expense of litigating in the foreign jurisdiction where the result of the litigation would be different from that that of proceedings which had been brough in the correct forum, particularly if the other forum is invited to apply law different from that of the agreed forum. Even if it were to be invited to apply correct law, it will often not be as reliable as the correct forum.

In an application of this description there may be good reason for the applicant to withhold notice to the respondent of the application for an inteim injunction until the matter can be decided on the merits, for example, a high risk that the respondent would seek equivalent and opposite anti-suit relief in the foreign court to defeat it. See Hiscox Dedicated Corporate Member Ltd Syndicate 33 At Lloyd's Starr Managing Agents Ltd (t/a Syndicate CVS 1919) v Weyerhaeuser Company [2019] EWHC 2671 (Comm); General Electric Company v Deutz AG 270 F.3d 144; Laker Airways v Sabena, Belgian Wd. Airlines 731 F.2d 909.

That the respondent may have obtained an order from the foreigh court does not provide a strong reason for refusing the injunction if that order was made without notice to the applicant and without informing the foreign court of the jurisdiction clause and of the law of the jurisdiction, since those proceedings would have been taken in breach of the parties' agreement as to jurisdiction. Comet Group PLC v Unika Computer SA [2004] I. L. Pr 1. An interlocutory mandatory injunction is appropriate is to remove a benefit obtained by a party’s stealing a march on the other. Van Joel v Hornsey [1895] 2 Ch 774. The Epsilon Rose [2003] EWCA Civ 938 is not to the contrary: Catlin Syndicate Limited (Lloyds Syndicate 2003) v AMEC Foster Wheeler USA Corporation [2020] EWHC 2530 (Comm).

If the court grants an injunction, it has a general discretion to do so on terms, whch could include an order for payment of defence costs, but the circumstances may militate against that in favour of allowing the issue to be pursued in the normal way. Catlin Syndicate (supra).

Incorporation of Arbitration Clause

An arbitration clause is not usually incorporated into a contract in the absence of clear incorporating words. Habas Sinai v Sometal [2010] EWHC 29 (Comm); Catlin Syndicate Ltd & Ors v Weyerhaeuser Company [2018] EWHC 3609 (Comm) and Hiscox Dedicated Corporate Member Ltd Syndicate 33 At Lloyd's Starr Managing Agents Ltd (t/a Syndicate CVS 1919) v Weyerhaeuser Company [2019] EWHC 2671 (Comm); Catlin Syndicate Limited (Lloyds Syndicate 2003) v AMEC Foster Wheeler USA Corporation [2020] EWHC 2530 (Comm).

Exclusive Jurisdiction Clause

The same principles in relation to an arbitration agreement apply to an exclusive jurisdiction clause. Catlin Syndicate Limited (Lloyds Syndicate 2003) v AMEC Foster Wheeler USA Corporation [2020] EWHC 2530 (Comm).