Sulamerica CIA Nacional De Seguros SA v Enesa Engenharia SA  EWCA Civ 638
The claimant was the insurer of hydro electric facilities in Brazil. Both parties were Brazilian, the risk was situated in Brazil and there was a dispute resolution clause which provided that the policy was governed by the law of Brazil and that all disputes were to be subject to the exclusive jurisdiction of the Brazilian courts. The policy also provided that the parties would seek to have any disputes resolved amicably by mediation and that if mediation failed then any disputes as to the amount payable under the policy were to be resolved by arbitration with its seat in England. A dispute arose as to alleged change of risk under the policy. The parties were unable to agree on a mediation procedure, and the defendant commenced judicial proceedings in Brazil.
The Court of Appeal granted the claimant an anti-suit injunction so that the dispute could be referred to arbitration in London.
- The law applicable to the arbitration clause was English law. Moore-Bick and Hallett LJJ (Lord Neuberger MR leaving the point open) ruled that there was generally a link between the law applicable to the policy and the law applicable to the arbitration clause so that an express choice of substantive law would amount to an implied choice of the law of the arbitration clause, but on the facts there was a closer link between the seat of the arbitration and the law applicable to the arbitration clause.
- The agreement to mediate did not constitute a legally binding obligation as the mediation clause did not specify a procedure for the mediation or for the appointment of a mediator, so there was no condition precedent of mediation pending the commencement of arbitration proceedings.
- The arbitration clause applied to disputes of both liability and quantum, and even if that was wrong then a dispute as to whether anything was payable at all was a dispute as to the amount payable.
- At first instance Cooke J held that in the case of a conflict between jurisdiction and arbitration provisions, arbitration prevailed and the jurisdiction clause was confined to enforcement of the award or cases in which the parties agreed to waive the arbitration clause. Permission to appeal against that ruling was refused.