|
The
court held that the parties had intended Texas law to apply and so proceedings
in England would not be allowed to continue. In doing so the Court of
Appeal reviewed the effects of both the Rome Convention and Brussels
Regulations in circumstances where separate proceedings had been commenced
in two jurisdictions under policies covering risks in multiple jurisdictions.
The
claimant, Amico, was an insurance company incorporated in Illinois.
Amico issued a policy, described as a global transportation policy,
to cover Cellstar, a Texas company, and its subsidiaries. One of its
subsidiaries was an English company by the name of CUK. The policy was
made in Texas and there was no choice of law clause.
A
claim was made under the policy in respect of the loss of two consignments
of cellular phones which had been despatched from CUK's Manchester warehouse
to other European destinations. Amico sought a declaration in the English
Courts that by reason of various breaches of warranty, it was under
no obligation to either Cellstar or CUK. Proceedings were also commenced
in Texas. An issue therefore arose as to whether the policy was governed
by English or Texas law.
The
trial judge had concluded that Amico had failed to show a good arguable
case for saying that the insurance policy was governed by English law.
The Court of Appeal agreed. The Court of Appeal held that the case satisfied
the common law conditions for implying an intention that Texas law should
govern. The contract also satisfied the test of "real choice"
applicable both under the Rome Convention and under s3A of the Insurance
Companies Act 1982, which gave effect to the Second Directive and there
was no reason to distinguish between the two pieces of legislation in
this respect. The trial judge was right to hold that Amico had failed
to show a good arguable case that the parties had chosen English law
and to have held that they had chosen Texas law.
If
that were wrong, the Court of Appeal agreed with the trial judge that
the law with which the policy was most closely connected was Texas law
for the purposes of both the Rome Convention and Schedule 3A.Under the
latter, there was a rebuttable presumption that the policy was most
closely connected with the Member State where the risk was situated.
Even assuming the presumption applied, the circumstances and manner
in which the policy was effected and the fact that it was a group policy
to cover risks situated all over the World outweighed any presumption.
If
it were permissible under the Brussels Convention to stay proceedings
with CUK, an English domiciled company, on the grounds that the forum
conveniens was Texas, the judge's order granting such a stay would be
upheld. But it was an issue whether the Brussels Convention prevented
such a stay.
In
the course of giving judgment the Court of Appeal had an interesting
discussion of the differences between the Rome Convention and the Second
Directive/Schedule 3A. Under the Rome Convention, such a composite policy
as this would fall to be regarded as a single contract and there would
be no question of any intention to scissor up the policy and to subject
different aspects of it to different governing laws. The Second Directive
was never intended to apply to, for example, a United States insurer,
which was not established and providing services in a Member State of
the European Union, but which was underwriting in America a policy covering
a risk relating to a United Kingdom establishment of its policyholder.
The court said it was possible that the UK legislature might have gone
further in implementing the Second Directive and intended to provide
a scheme aimed at defining the governing law of all policies, wherever
and by whomsoever issued, which could be said to relate to an establishment
of the policyholder in any member state of the European Union.
|