In this case an English court held that a claimant (W) could not pursue before it an insurance claim arising out of an injury which she had suffered whilst on holiday in Spain. This was because, on a true construction of the territorial scope clause in the relevant policy, there was no indemnity for claims brought outside of Spain.
W was injured whilst staying at a hotel insured by M, an insurer domiciled in Spain. On her return W issued proceedings in the English court for damages naming M as defendant.
M challenged the claimant’s right to pursue her claim in the English Court, on the basis of a clause in the relevant public liability policy providing that coverage would only extend to “claims submitted within Spanish jurisdiction for events that have taken place in Spain”.
M argued that the effect of this clause was that only claims brought in Spain were indemnifiable under the policy.
It was common ground between the parties that Spanish law was the applicable law. An issue arose as to whether or not the clause relied upon by M was rendered invalid by certain provisions of Spanish insurance legislation. Spanish legal experts testified to the effect that if the clause in question was determined to be a ‘definition’ clause, it would be considered valid. If it was an ‘exemption’ clause, it would be considered invalid.
Having considered the Spanish law evidence, the Court held that the territorial scope clause defined the scope of the indemnity under the policy, rather than operating as an exemption clause. The clause was therefore valid.
As there was no indemnity under the policy for claims brought outside of Spain, the claimant could not pursue her claim in the English courts.