In Starlight Shipping Co v Allianz Marine & Aviation Versicherungs AG (The Alexandros T) EWCA Civ 1010, Owners appealed against a summary judgment awarded against them in favour of the Respondent Insurers.
Owners’ vessel had been a total loss and the Insurers had disputed liability. The claims as between Owners and the Insurers were settled, and the settlement agreements contained exclusive English law and High Court jurisdiction clauses. Several years later, Owners commenced proceedings against the Insurers in Greece claiming inter alia, loss of hire and loss of opportunity. The Insurers brought claims for damages in England, and sought declarations that Owners had breached the settlement agreements.
At first instance, the Insurers were awarded summary judgment. Owners appealed.
The Court of Appeal found that the Greek proceedings fell within the settlement provisions, and the exclusive jurisdiction clauses incorporated into the settlement agreements. The Greek proceedings should have been brought in England. The Insurers had been fully entitled to bring proceedings for damages for breach of the settlement agreements.
The Insurers had incurred, and continued to incur, considerable expense as a result of the proceedings in Greece. The Court found that they were entitled to be indemnified by Owners in respect of those expenses.
This case exemplifies the fact that courts will impose costs sanctions and award damages if a party acts contrary to an exclusive English law and jurisdiction clause. A clear distinction must be drawn between exclusive and non-exclusive law and jurisdiction provisions. Parties must be aware when agreeing to the former that they will be applied strictly. It is important, therefore, to ensure that law and jurisdiction provisions are acceptable before an agreement is signed, and that they are subsequently complied with.