Lloyd's Maritime and Commercial Law Quarterly
ARBITRATION CLAUSES AND THE RESTRAINT OF PROCEEDINGS IN ANOTHER MEMBER STATE OF THE EUROPEAN UNION
Through Transport
v. New India
In Through Transport Mutual Insurance Association (Eurasia) Ltd
v. New India Assurance Co Ltd
,1
a number of important questions were raised as to the circumstances where an English court might and should restrain proceedings which are alleged to have been brought in another Member State of the European Union in breach of an exclusive arbitration agreement for England. In answering these, the court also had to confront the intricacies of the conflict of laws process of classification.
Facts and ruling
New India, who was the insurer of a cargo owner (Saluja Fabrics) whose cargo was lost in transit by road, brought a claim against Through Transport, who was the insurer of Borneo Maritime Ltd and Borneo Maritime Oy, the issuers of bills of lading for the transport of the cargo respectively by sea and by road. Saluja Fabrics had made a claim against New India which was settled. New India had then sought to recover their losses by suing the carrier. However, since Borneo Maritime Oy had filed for bankruptcy and no payment had been made by it or by Borneo Maritime Ltd, New India sought instead to sue its insurer, Through Transport. The insurance contract between Borneo Maritime Oy and Through Transport (the latter’s ‘‘Club Rules’’) contained an English choice of law clause and a London arbitration clause,2
both of which purported to extend to disputes involving third parties, including assignees.
On 16 December 2002, New India began proceedings against Through Transport in the Finnish District Court of Kotka, pursuant to the Finnish Insurance Contracts Act 1994, s 67. Through Transport sought an injunction from the English courts to restrain New
1. [2004] EWCA (Civ) 1598; [2005] 1 Lloyd’s Rep 67.
2. The clause provided as follows: ‘‘If any difference or dispute shall arise between you (or any other person) and the Association out of or in connection with any insurance provided by the Association or any application for or an offer of insurance, it shall be referred to arbitration in London.’’
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