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The
Court strongly rejected the attempt by the claimant to argue that contractual
terms in the reinsurance contracts varied the conventional status of
assured, insurer and re-insurer. The claimant could not seek damages
directly from the reinsurer.
Grecoair were the owners of an aircraft. The aircraft was leased to
a company, AAC, who insured it for hull and liability all risks with
the National Insurance Company of Angola, ENSA. Under this policy, Grecoair
were named as an additional insured. ENSA reinsured hull and liability
risks with the Second Defendant with a deductible each accident of USD$500,000.
The deductible was insured by the First and Third Defendants. Grecoair
claimed against all three re-insurers for payment in respect of repairs
which were required to the aircraft. There was a dispute between the
parties as to whether the repairs were recoverable under the insurance
policy. Nonetheless, Tomlinson J ordered two preliminary issues to be
tried. These were:-
•
Whether Grecoair was entitled to claim directly against the reinsurers
and recover damages from the Defendants for loss caused by insured
perils;
• Whether the Defendants, in particular the Second Defendant,
had come to any arrangement with Grecoair which bound them contractually
to make the repairs.
Mr Justice
Langley found for the Defendants on both issues.
In relation to the first question and upon examination of the reinsurance
contracts, the Court held that there was nothing in the contracts entitling
Grecoair to claim from the reinsurers. Grecoair had claimed that by
virtue of provisions under a section of the contract entitled "Information",
which included details of the contract with between insurer and insured
gave Grecoair the right to claim directly against the reinsurers The
Court rejected these submissions stating that it was clear that the
provisions within the "Information" section were expressed
to be information about the contents of the insurance policy, and were
in stark contrast to the Conditions, which were the terms of the reinsurance
contract.
Grecoair also argued that their intention had been to obtain direct
rights against the reinsurers, and that the small percentage retentions
of ENSA were a clear indication that ENSA was a mere front. The Judge
dismissed these arguments. It was clear that there was nothing in the
contract which made the situation any different from the conventional
status of assured, insured and re-insurer.
In relation to the second question, Grecoair relied heavily on comments
made by the Director of Claims and Legal Affairs for the Second Defendant
in a meeting with Grecoair. The Director had apparently stated that
the reinsurers were "happy to have the aircraft repaired"
by a company called FLS Aerospace Limited. Grecoair contended that they
accepted this offer following the meeting. The court held that there
was no formal offer or acceptance between the parties. Furthermore,
both parties understood at the time at which the Director made the comments
that she did not have the authority to make a formal offer on behalf
of the deductibles underwriters.
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