Commercial Court confirms jurisdiction to enforce London arbitration agreement in transatlantic insurance battle

29/10/19

(1) Hiscox Dedicated Corporate Member Limited as representative of Syndicate 33 at Lloyd’s and (2) Starr Managing Agents Limited (trading as Syndicate Cvs 1919) v Weyerhaeuser Company

The Commercial Court has given judgment on an anti-suit injunction application in the familiar context of a transatlantic battle between UK-based insurers and a US-based insured over where coverage disputes should be resolved.  This case also involved the question of where a dispute as to “arbitrability” should be resolved.

Weyerhaeuser is a wood products manufacturer based in Seattle. Its products included joists manufactured for use in residential homes. Weyerhaeuser maintained liability insurance in the form of an excess liability programme placed in the London Market. The claimants were liability insurers within that programme.  In July 2017 Weyerhaeuser gave notice to its liability insurers of claims made against it in the USA in respect of allegedly faulty joists installed in newly-built residential homes.

The insurance programme included various layers and various policies with different terms. The excess policy in the present dispute was governed by Washington State law and an issue arose as to whether it incorporated a London arbitration agreement contained in an underlying policy. Weyerhaeuser commenced proceedings in the US contending that it did not, and it obtained  an ‘anti-anti-suit injunction’ from the US Courts to prevent insurers from seeking to enforce the arbitration clause through the English courts.  When this US action was dismissed over a year later, the insurers obtained an interim anti-suit injunction from the Commercial Court, on a very urgent basis on a Friday evening, a few hours before Weyerhaeuser obtained a further anti-anti-suit injunction in a second set of US proceedings they had started. After hearings in both jurisdictions the matter came before Robin Knowles J, who had given judgment on an almost identical issue in relation to a different policy in the insurance programme in December 2018.

The Judge held that the Commercial Court’s anti-suit injunction should be continued.  In so doing he dismissed Weyerhaeuser’s challenge to the jurisdiction of the English court, and he found to the requisite standard of proof that the London arbitration clause was indeed incorporated into the excess policy. He also rejected the submission by Weyerhaeuser that the insurers’ conduct and participation in both sets of the US proceedings constituted a voluntary submission to jurisdiction or otherwise militated against the continuation of the injunction.

The judgment is here.