This blog post is by Philip Mead of 12 King’s Bench Walk.
Claims in matters relating to insurance: does an exclusive jurisdiction clause between the insurer and the policyholder bind a third party bringing a direct right of action against the insurer? No, held the Court of Justice of the European Union in Case C-368/16, Assens Havn v Navigators Management (UK) Limited (Judgment of the Eighth Chamber, 13 July 2017).
During transportation of sugar beet by ship from Assens in Denmark to Nakskov in Denmark damage was caused to the port installations at Assens Havn. The charterer went into liquidation. As a result, under Danish law, Assens Havn relied upon a direct right of action against the insurer (Navigators) in the circumstances that the policyholder had gone into liquidation. The policy between the policyholder and the insurer contained an exclusive jurisdiction clause providing for the jurisdiction of the High Court in London. A question arose as to whether the injured party was bound by the agreement on jurisdiction between the insurer and policy holder.
The agreement between the European Union and Denmark applied the Brussels Regulation 44/2001 to Denmark. Applying its previous case law, the CJEU held that section 3 of the Brussels Regulation established an autonomous system for the conferral of jurisdiction; and actions involving insurance are characterised by an imbalance between the parties, which the rules in section 3 seek to correct by giving the weaker party the benefit of rules of jurisdiction more favourable to his interests.
Whereas exclusive jurisdiction agreements may derogate from the provisions of section 3 of the Regulation under Article 13, the right granted to injured parties to claim directly against an insurer does not refer to those provisions. Therefore Section 3 does not permit an agreement on jurisdiction to be invoked as against a victim bringing a direct right of action (see paras 34-36). Article 13 lists the circumstances when the parties may derogate from the rules laid down in section 3 (para 37). The extension of the constraints of agreements on jurisdiction against weaker parties would compromise the objective under section 3 to protect the economically and legally weaker party (para 41).