Reinsurance: cut-through clauses

Zephyrus Capital Aviation Partners 1D Ltd and Others v Fidelis Underwriting Ltd and Others [2024] EWHC 734 (Comm) is a massive and important judgment of Henshaw J determining a series of important points on the circumstances in which an English court should refuse to stay its own proceedings in favour of a foreign court nominated by an exclusive jurisdiction clause binding on the parties. The present case was one in which the claimants relied upon cut-through clauses in reinsurance contracts under which they were permitted to bring direct proceedings against the reinsurers.

However, the reinsurances were governed by Russian law and subject to the exclusive jurisdiction of the Russian courts, and the claimants were concerned that a fair trial could not be secured in Russia. Henshaw J rejected the reinsurers' application for a stay, thereby allowing the English proceedings to go ahead.