In Al Mana Lifestyle Trading LLC & Ors v United Fidelity Insurance Company PSC & Ors [2022] EWHC 2049 (Comm), the English Commercial Court has confirmed it has jurisdiction to hear claims for Covid-related business interruption (BI) losses of around US $40 million, made under multi-risk insurance policies issued in the Middle East. In doing so, it has emphasised its very considerable experience in relation to issues of COVID-19 BI losses.
The claimants, for whom Mishcon de Reya is acting, are part of a group which operates in the food and beverage and retail sectors. In May 2021 they commenced English proceedings, seeking an indemnity from the defendant insurers relating to BI losses incurred during the COVID-19 pandemic. However, the defendants, who are located in the UAE, Qatar and Kuwait, challenged the English court's jurisdiction to hear the claims.
The jurisdiction clause in each of the policies provided as follows:
APPLICABLE LAW AND JURISDICTION
In accordance with the jurisdiction, local laws and practices of the country in which the policy is issued. Otherwise England and Wales UK Jurisdiction shall be applied,
Under liability jurisdiction will be extended to worldwide excluding USA and Canada.
The defendants argued that the first sentence amounts to an exclusive choice of jurisdiction in favour of the courts in the country in which the policy was issued and that disputes must be submitted to those courts first. The second sentence only applied if, for whatever reason, the local court would not accept jurisdiction.
The claimants contended that the jurisdiction clause permitted proceedings to be brought either in the country where the policy was issued (UAE, Qatar or Kuwait respectively), or in the courts of England and Wales.
Mrs Justice Cockerill agreed, both as a question of impression and on detailed analysis with the claimants.
The wording of the clause was not "felicitous", but it indubitably provided some form of alternative. As to the factual matrix, the judge saw force in the point that the policies were issued in conjunction with each other as part of a suite to provide comprehensive coverage for the claimants’ operations in a number of jurisdictions, which was also reinsured in the international market. Where claims could arise under policies across jurisdictions, it made sense for there to be an option for disputes to be determined in a single neutral venue such as England and Wales, where the courts have particular expertise on issues of insurance law relating to terms in common use in the London market.
Mrs Justice Cockerill went on to reject the defendants' arguments that the court should nevertheless decline jurisdiction on the basis that England was not the most convenient forum to hear the claims. Given the presence of the non-exclusive jurisdiction clause in favour of the English court there was a strong prima facie case that it was a convenient forum. It was for the defendants to show "strong reason" why the English court should not exercise its jurisdiction, and that was a heavy burden which the defendants had failed to meet. In reaching this decision, the judge noted that the English Commercial Court is particularly well-versed in the issues relating to claims for indemnity for Covid-related BI losses.
Partner Sonia Campbell and Managing Associate Chris Neilson are acting for the claimants, instructing Gavin Kealey QC and Josephine Higgs QC of 7 King's Bench Walk.