DASSAULT AVIATION SA V MITSUI SUMITOMO INSURANCE CO LTD

[2022] EWHC 3287 (Comm), King’s Bench Division, Commercial Court, Mrs Justice Cockerill, 20 December 2022

Arbitration – Jurisdiction – Non-assignment clause in sale contract – Whether clause precluded action in arbitration by subrogated insurers suing in their own name – Nature of subrogation – Distinction between voluntary and involuntary assignment – Arbitration Act 1996, section 67

In March 2015, Dassault agreed to sell two aircraft plus spares and services to MBA acting for the Japanese Coast Guard. The Sale Contract was governed by English law and disputes were to be resolved by arbitration in London under ICC Rules. The Sale Contract provided that it “shall not be assigned or transferred in whole or in part by any Party to any third party, for any reason whatsoever, without the prior written consent of the other Party” and that each party was to keep confidential every part of the Sale Contract. In September 2017 MBA entered into a contract of insurance (the Policy) with MSI to cover the risk of loss if there was late delivery. The Policy, replicating article 25 of the Japanese Insurance Law, provided that when MSI made payment under the Policy then all claims open to MBA were to be transferred to MSI. It was common ground that under Japanese law rights of subrogation were exercisable in the insurer’s own name and not the name of the assured. Delivery was delayed. MSI made payment to MBA and then commenced London arbitration proceedings in its own name. The tribunal held by a 2:1 majority that it possessed jurisdiction to hear the claim by MSI. Dassault appealed under section 67 of the Arbitration Act 1996.