QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
Sitting as a Deputy in the Queen's Bench Division
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Taylor Aston Limited (formerly Harding & Taylor Associates Limited) |
Claimant |
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AON LIMITED (formerly Alexander Howden Group Limited) |
Defendant |
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David Head (instructed by Cameron McKenna) for the Defendant
Hearing dates: 27-30/06; 4-7/07
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Crown Copyright ©
"We write to confirm the arrangements between us. This agreement is for Kazakhstan but can be expanded to include Georgia, Uzbekistan and other CIS states (added in manuscript in February 1993).
We will form and lead a small working party of experienced people from the London Insurance Market to advise on the formation of a pool of insurance companies consisting of Demyeooshilik and other Kazakh insurance companies ("KIP"), its requirements its insurance and reinsurance facilities, recruitment and training, reinsurance protection and insurance broking. You will be part of such working party.
We will use reasonable endeavours (1) to procure your introduction to those people in Kazakhstan who are in the initial stages of forming KIP or are necessary to meet in connection with the formation and early operation of KIP and in particular to the Minister of Finance and Insurance ("Persons") and (2) to assist in the negotiations……
Upon [Howdens] or any other company within the same group as [Howdens] executing an agreement in relation to KIP or any insurance corporation incorporated for the provision by [Howdens] of insurance-related services to KIP or the laws of the Republic of Kazakhstan or any successor or subsidiary or associated company of such companies ("Newcos")….or the appointment (whether formal or de facto) of [Howdens] as insurance broker of record to KIP or Newcos resulting from the introductions and endeavours undertaken by us on [Howdens]'s behalf as above, [Howdens] will pay to us a commission equal to:-
(a) 33% (or as otherwise mutually agreed) of the commission received, net of taxes, by [Howdens] (net of any part thereof paid by [Howdens] to a third party insurance broker) in respect of each and every insurance or reinsurance contract placed with on behalf of KIP or Newcos directly or indirectly through [Howdens] less any deduction resulting from return premiums;
(b) 33% (unless otherwise mutually agreed) of all other remuneration, net of taxes deducted therefrom, which is received by [Howdens] and which is payable directly or indirectly in respect of or in relation to the advice on the formation, operation, recruitment and/or training for, broking of and for requirements, facilities and reinsurance protection of KIP or Newcos….
Any commission payable under (a) and (b) above shall be reduced by 50% in the case of any remuneration paid to [Howdens] as a result of competitive tendering.
The Commission payable under (a) above shall not be payable in relation to insurances and reinsurance directed by existing clients of [Howdens] to whom they are a broker of record, provided such insurances and reinsurance:
(a) are not controlled by KIP or Newcos; and
(b) are not required by the law of Kazakhstan to be placed with or arranged through KIP or Newcos….
….Such commission will be paid to us each quarter in arrears based on sums received by [Howdens] during the quarter in question.
The commission payable under (a) and (b) above will cease to accrue five years after the date of receipt by [Howdens] of the commission payable in respect of the first insurance contract placed through [Howdens] with KIP or Newcos or on behalf of KIP or Newcos…..
.…The terms of this agreement shall be governed and construed in accordance with the laws of England and each party agrees to submit to the exclusive jurisdiction of the English Courts as regards any claim or matter arising under this agreement….."
The Issues
Issue 1. When did the five year term of entitlement under the Commission Agreement begin and end?
Issue 2. What commissions were earned by Howdens on relevant business over that period? Sub-issues on this point are:-
(a) Does brokerage earned by Howdens on the Ispat Karmet account constitute relevant business?
(b) Does any brokerage earned by Howdens on "Ispat Karmet Retrocessions" constitute relevant business?
(c) Did Howdens earn any relevant brokerage in respect of the following accounts that has not been credited to the Claimant:
(i) Philip Morris?
(ii) British Gas?
(iii) Coca Cola?
(d) Did Howdens receive "up to £750,000" from the Association of British Insurers or the "Know How Fund"?
(e) Do ceding commissions retained by KIP (by deduction from premium) constitute part of Howdens' commission to which H&T was entitled to a share?
Issue 3. What payments were made by Howdens to on behalf of H&T?
Issue 4. What was the status of such payments? Were they advances on commission or were they outright payments which were not liable to be set off against commissions owed?
Issue 5. Was or is the Defendant prevented from seeking to recoup advance commissions because of lack of certainty/want of consideration?
Issue 6. Was the Claimant's commission entitlement reduced from 33% to 25% as a result of the 1 December 2004 meeting?
Issue 7. On the true construction of the assignments, did the Defendant acquire the right to be paid 86.66% of all commissions due to H&T, or only 73.33%?
Issue 8. As a matter of construction of the 16 December 1997 assignment between the Kazakh parties and the Defendant, was its effect somehow to finally settle any sums due from H&T to those parties or their assignees?
Issue 9. In some or all of the Claimant's claim is some or all of the Claimant's claim statute barred for limitation? In particular:
a. did a fresh cause of action accrue by reason of any acknowledgement on the part the Defendant within section 29 of the Limitation Act 1980?
b. can the Claimant establish that the Defendant deliberately concealed facts relevant to the Claimant's cause of action within section 32 of the Limitation Act 1980?
Issue 10. Is some or all of Aon of the Defendant's counterclaim statute-barred for limitation?
Witnesses
Issue 1
Issue 2.
Issue 2a
Issue 2b
Issue 2c
Issue 2d
Issue 2e Ceding Commissions
Issue 3
Issue 4
Issue 5
Issue 6
Issue 7
Issue 8
Issue 9 Limitation and the claim
Issue 10
MICHAEL BRINDLE QC