In Aspen Insurance UK Ltd and others v Pectel Ltd – Butterworths Law Direct 18.11.08 the Commercial Court held that, on the true construction of the insurance policy in issue, the Defendant had failed to comply with a condition precedent (condition 4(a)) that 'immediate written notice with full particulars of any occurrence which may give rise to indemnity under this insurance' should be provided to the Claimants. Accordingly, the Claimants were entitled to decline liability in respect of the Defendant's claims.
The preliminary issues for determination were whether the Defendant had complied with condition 4(a) and whether condition 4(a) was a condition precedent to the Claimants being liable to indemnify the Defendant in respect of its insured liability.
It was held that, on the true construction of the policy, compliance with condition 4(a) was a condition precedent to the underwriters' liability to indemnify. It did not give rise solely to a remedy of damages or merely provide that underwriters need not pay a claim until all conditions had been complied with, however late such compliance was. A condition requiring 'immediate notice' could not be construed as requiring 'notice, whenever given'. The Claimants were therefore entitled to decline liability in respect of the Defendant's claims.