Court of Appeal judgment in the latest round of the “Alexandros T” litigation

18/07/14

The Court of Appeal today handed down judgment in Starlight Shipping v Allianz Marine and others, in what is the latest round of the long-running litigation arising out of the loss of a vessel called “The Alexandros T”.  The case had previously been to the Court of Appeal and the Supreme Court on jurisdictional grounds.

The background to the case is the loss of the Alexandros T in 2006, following which the Greek owners of the vessel commenced proceedings in the Commercial Court claiming an indemnity from its insurers. The insurers denied liability and alleged (amongst other things) that the vessel was not seaworthy. During the course of the proceedings, the insured made allegations that the insurers had fabricated false evidence and bribed key witnesses. In the event, the proceedings were settled and a Tomlin Order filed in January 2008.

In April 2011, however, the insured and associated entities and individuals commenced proceedings in Greece against not only the insurers but also their officers and employees and the English solicitors and counsel who had acted for the insurers in the original Commercial Court action. In the Greek proceedings, the claimants are alleging that the insurers fabricated false evidence and that they conspired to use that evidence in such a way as to harm the insured and to mislead the Commercial Court.  The claimants in the Greek proceedings are claiming damages in the total sum of approximately €170 million.

In July 2011, the insurers issued an application in the Commercial Court to enforce the terms of settlement.  They sought (amongst other things) an indemnity under the settlement agreement, damages for breach of the “full and final settlement” release provision in the settlement agreement, damages on the basis that the Greek proceedings had been commenced in breach of the exclusive jurisdiction provision in the underlying insurance policy, and various heads of declaratory relief.

In December 2011, Mr Justice Burton acceded to the entirety of the insurers’ application and granted summary judgment in their favour.  An appeal against Mr Justice Burton’s orders was subsequently heard by the Court of Appeal in October 2012.  In its judgment, the Court of Appeal held that the insurers’ application to enforce the terms of settlement agreement was the same cause of action as the claims being brought in the Greek proceedings and consequently it held that it was obliged to order a stay of the English proceedings under Article 27 of the Judgments Regulation.  That judgment was subsequently overturned by the Supreme Court and the case was remitted to the Court of Appeal for determination of the insured’s appeal against the summary judgment granted by Mr Justice Burton.

In today’s judgment, the Court of Appeal has dismissed the remitted part of the insured’s appeal and has upheld the orders made by Mr Justice Burton.  A number of important points arise out of the judgment, including the Court of Appeal’s conclusion that nothing in the Judgments Regulation or EU law generally precludes the English Court from awarding damages for breach of a jurisdiction agreement against a defendant who wrongfully brings proceedings in another EU Member State.

The judgment is here.