In Glacier Reinsurance Co AG v Gard Marine & Energy Ltd [2010] EWCA Civ 1052, the Court of Appeal upheld a first instance decision that the English courts had jurisdiction under article 6(1) of the Lugano Convention to hear a claim brought against a Swiss reinsurer.

The Respondent accepted 12.5% of the risk of a property and business interruption reinsurance issued to a US company, Devon. The Respondent’s brokers, AHP, reinsured the entire risk under two excess of loss reinsurance slips, one subscribed to by four London market reinsurers (7.5%) and the other subscribed to by the Appellant, a Swiss reinsurer (5%). Devon sustained hurricane damage to its insured interests, and the Respondent settled up to the policy limits. The Respondent subsequently commenced court proceedings in London against one of the London reinsurers (the others having paid), the Appellant and AHP. The Appellant contested the jurisdiction of the English courts to hear the claim, arguing that under Article 2 of the Lugano Convention it could only be sued in Switzerland, its country of domicile.

At first instance, it was held that the English courts had jurisdiction under Article 6(1) of the Lugano Convention, which provides that “a person domiciled in a Contracting State may also be sued … where he is one of a number of defendants, in the courts for the place where any one of them is domiciled”. It was appropriate in this case for all of the defendants to be sued in the same action, because the issues were the same and otherwise there would be a risk of conflicting judgments. The Appellant appealed against the court’s ruling on Article 6(1).

The Court of Appeal, however, upheld the first instance judge’s conclusion. The correct approach under Article 6 was for the court to assess the connection between the claims to see whether there was a risk of judgments arising out of separate proceedings being irreconcilable, such that there might be a divergent outcome where there was the same situation in both law and fact. In this case, the contract was governed by English law, as there had been a choice of English law with reasonable certainty. The Swiss placement, rather than being separate, was part of the London market placement and it made no sense for the two reinsurance contracts to be governed by different laws. Further, the underlying policy was governed by English law and it would be usual for the parties to an excess of loss reinsurance contract to choose the same applicable law.

On the facts of this case, it was expedient for the claim against the Appellant to be heard in England. The same issues arose as in the cases against the other defendants, and there was nothing in the placements to suggest that any different interpretation was required. Crucially, there was also a risk of irreconcilable judgments if the cases were heard in different jurisdictions.