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Lloyd's Maritime and Commercial Law Quarterly

ENGLISH MARINE INSURANCE AND GENERAL AVERAGE LAW

Barış Soyer*

CASES

138. Aspen Underwriting Ltd & Ors v Kairos Shipping Ltd (The Atlantik Confidence)1

Fraudulent claim—hull & machinery insurance—recovery of proceeds—settlement agreement—jurisdiction

This litigation is the successor to the limitation action dispute during which the cargo interests were able to establish that the vessel was scuttled at the instigation of the owner of the vessel, and so defeated the normal limits on compensation.2 In the present action, the hull underwriters of the vessel sought recovery of the insurance proceeds paid to the owners and their bank under their Settlement Agreement. The hull underwriters claimed damages for fraudulent misrepresentation and also restitution of the sum paid. The proceedings were served on the bank in the Netherlands. The bank argued that, under the Brussels Regulation Recast,3 it could be sued only in the place of its domicile, the Netherlands. The hull underwriters maintained that the English court had jurisdiction for three reasons: (i) the bank was bound by the exclusive jurisdiction clause in the Settlement Agreement; (ii) the bank was bound by the exclusive jurisdiction clause in the policy; and (iii) the matters brought against the bank were matters which related to tort, delict or quasi delict and the harmful event occurred in England so as to confer jurisdiction under the Brussels Regulation Recast, Art.7(2).
Decision (QB): The hull underwriters did not have the better of the argument that the bank was bound by the exclusive jurisdiction clause in the Settlement Agreement or in the policy. The hull underwriters did, however, have the better of the argument that their claim for damages caused by misrepresentation was a matter relating to tort and that the harmful event occurred within the jurisdiction; but the court did not have jurisdiction over the claim in restitution.
Held (QB): (1) On the proper construction of the Settlement Agreement, the bank was not a party to it. (2) The bank was not bound by the jurisdiction clause under the “conditional benefit” doctrine, as it had not sued hull underwriters. (3) The bank had not

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