QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| THROUGH TRANSPORT MUTUAL INSURANCE ASSOCIATION (EURASIA) LTD
|- and -
|NEW INDIA ASSURANCE CO. LTD
Mr. Christopher Smith (instructed by Holmes Hardingham Walser Johnston Winter) for the defendant
Crown Copyright ©
Mr. Justice Moore-Bick :
"Clause A. Cargo Liabilities
1 RISKS INSURED
1.1 Loss of or Damage to Cargo
You are insured for your liability for physical loss of or damage to Cargo and for consequential loss resulting from such loss of damage.
Clause A. Exclusions & Qualifications
1. STANDARD EXCLUSIONS AND QUALIFICATIONS
. . . . . . . . . . . . . . . . . . . .
1.3 Indemnity insurance
Insurance with the Association is on the basis of indemnity which means that the Association shall pay you only
(a) after you have suffered a physical loss of your insured property, for example, your Equipment, or
(b) after you have expended money, for example, by paying a claim of your Customer or a Third Party for which you are liable or by paying for repairs to your insured property.
Clause D. Law & Disputes
Every insurance provided by the Association and the rights and obligations of you (or any other person) and the Association arising out of or in connection with such insurance, is subject to and shall be construed in accordance with English law.
If any difference or dispute shall arise between you (or any other person) and the Association out of or in connection with any insurance provided by the Association or any application for or an offer of insurance, it shall be referred to arbitration in London."
The arbitration clause
"As I have already said, it is well settled that English law cannot give effect to a foreign law which discharges an English liability to pay money in England and the appellants' contracts were English contracts under which they were to be paid in England. So, unless the form of a foreign law is more important than its substance and effect, law No. 3504 must be treated as a law which seeks to discharge English liabilities and it cannot, therefore, be effective in England. In my judgment, we must look at the substance and effect of a foreign law and that is a question of fact. I have found nothing in the evidence to show that its effect was anything other than I have stated."
Lord Denning identified three distinct ways in which the legislation could be viewed. He held that even if it were viewed as a law relating to status the bank could not succeed. The importance of the case for present purposes, however, lies in the fact that their Lordships considered it appropriate for the English courts to characterise the issue for themselves.
"Subject to what I shall say in a moment, characterisation or classification is governed by the lex fori. But characterisation or classification of what? It follows from what I have said that the proper approach is to look beyond the formulation of the claim and to identify according to the lex fori the true issue or issues thrown up by the claim and defence. This requires a parallel exercise in classification of the relevant rule of law. However, classification of an issue and rule of law for this purpose, the underlying principle of which is to strive for comity between competing legal systems, should not be constrained by particular notions or distinctions of the domestic law of the lex fori, or that of the competing system of law, which may have no counterpart in the other's system. Nor should the issue be defined too narrowly so that it attracts a particular domestic rule under the lex fori which may not be applicable under the other system: see Cheshire & North's Private International Law, 12th ed., pp. 45-46, and Dicey & Morris, vol. 1, pp. 38-43, 45-48."
"I agree with the judge when he said  1 W.L.R. 978, 988: "In order to ascertain the applicable law under English conflict of laws, it is not sufficient to characterise the nature of the claim: it is necessary to identify the question at issue." Any claim, whether it be a claim that can be characterised as restitutionary or otherwise, may involve a number of issues which may have to be decided according to different systems of law. Thus it is necessary for the court to look at each issue and to decide the appropriate law to apply to the resolution of that dispute."
Injured person's entitlement to compensation under general liability insurance
A person who has sustained bodily injury, property damage or financial loss under general liability insurance is entitled to claim compensation in accordance with the insurance contract direct from the insurer if
(1) . . . . . . . . . .
(2) the insured has been declared bankrupt or is otherwise insolvent;"
Stay of the action
The anti-suit injunction
"If contracting parties agree to give a particular court exclusive jurisdiction to rule on claims between those parties, and a claim falling within the scope of the agreement is made in proceedings in a forum other than that which the parties have agreed, the English court will ordinarily exercise its discretion (whether by granting a stay of proceedings in England, or by restraining the prosecution of proceedings in the non-contractual forum abroad, or by such other procedural order as is appropriate in the circumstances) to secure compliance with the contractual bargain, unless the party suing in the non-contractual forum (the burden being on him) can show strong reasons for suing in that forum. I use the word "ordinarily" to recognise that where an exercise of discretion is called for there can be no absolute or inflexible rule governing that exercise, and also that a party may lose his claim to equitable relief by dilatoriness or other unconscionable conduct. But the general rule is clear: where parties have bound themselves by an exclusive jurisdiction clause effect should ordinarily be given to that obligation in the absence of strong reasons for departing from it. Whether a party can show strong reasons, sufficient to displace the other party's prima facie entitlement to enforce the contractual bargain, will depend on all the facts and circumstances of the particular case. "
"The position of a party who has an exclusive English jurisdiction clause is very different from one who does not. The former has a contractual right to have the contract enforced. The latter has no such right. The former's right specifically to enforce his contract can only be displaced by strong reasons being shown by the opposite party why an injunction should not be granted The latter has to show that justice requires that he should be granted an injunction."
" . . . . . . the starting point is, as the judge said, that the party suing in the non-contractual forum must show strong reasons for doing so or he faces the prospect of an injunction being granted against him. I accept that the court should take into account how serious the breach is. In other words a defendant who cynically flouts a jurisdiction clause which he has freely negotiated is more likely to be enjoined than one who has had the clause imposed upon him and has acted in good faith. But I do not think this leads to a sliding scale of enforcement. The parties to a contract, however it is made, should abide by its terms. If they have agreed to resolve their disputes in a particular way they should be kept to their bargain unless there are strong reasons for not doing so."