ASPEN UNDERWRITING LTD AND OTHERS V CREDIT EUROPE BANK NV

[2020] UKSC 11, Supreme Court, Lady Hale, Lord Reed, Lord Kerr, Lord Hodge, Lord Lloyd-Jones, Lord Kitchin and Lord Sales, 1 April 2020

Conflict of laws – Jurisdiction – Recovery of paid insurance proceeds – Settlement agreement – Exclusive jurisdiction clause in policy – Whether binding on mortgagee bank – “Matters relating to insurance” – Insurance – Hull and Machinery policy – Brussels Regulation Recast

This action was consequent upon the sinking of the vessel Atlantik Confidence. It has previously been held that the vessel was scuttled and that her owners were not entitled to limit liability; The Atlantik Confidence [2016] 2 Lloyd’s Rep 525. The hull underwriters had already paid under the policy and in this action sought to recover the insurance proceeds from the ship’s owners and the mortgagee, a bank based in Belgium. The bank was also the assignee of the insurance of the vessel. The underwriters sought rescission of the settlement agreement, restitution of the settlement sum and damages, including the costs of handling and investigating the claim. The bank had been served with proceedings and disputed jurisdiction. Hull underwriters maintained that the court had jurisdiction for two reasons: the bank was bound by the exclusive jurisdiction clause in the policy, which contained a loss payee clause in favour of the bank; and the bank could not rely upon special insurance jurisdiction rules for matters relating to insurance under which underwriters could sue only in assured’s member state.