AXA VERSICHERUNG AG V ARAB INSURANCE GROUP

[2017] EWCA Civ 96, Court of Appeal, Lady Justice Arden, Lord Justice Lewison and Lord Justice Christopher Clarke, 28 February 2017

Reinsurance - First loss facultative obligatory treaties - Non-disclosure and misrepresentation - Materiality of loss history - Inducement

Axa entered into two reinsurance treaties with Arig. The first, in 1996, was a facultative obligatory "first loss treaty" covering the first US$500,000 of losses for any one accident or occurrence on Arig's book of inwards marine energy construction risks attaching during the period 1 January 1996 to 30 June 1997. Axa's line was 50 per cent. The second was the 1997 renewal of the treaty, covering risks attaching during the period 1 July 1997 to 30 June 1998. Axa sought to avoid the first treaty on the ground of non-disclosure of loss statistics for the risks in question for the period 1989 to 1995, or, in the alternative, misrepresentation to the effect that there were no losses. Axa sought to avoid the renewal on the same grounds and in addition for non-disclosure of three incidents which either had resulted or were likely to result in claims against Arig under the 1996 treaty. The action was dismissed by Males J.