In the recent case of Stonebridge Underwriting Limited v Ontario Municipal Insurance Exchange  EWHC 2279, Mr Justice Christopher Clarke considered whether a dispute based on a "typical London market slip policy" should be heard in London or Ontario, Canada. The policy in question was an excess of loss policy under which Stonebridge Underwriting Limited (on behalf of the members of Syndicate 990) reinsured the Ontario Municipal Insurance Exchange (OMEX). A dispute arose between the parties in relation to two issues: first, whether OMEX had complied with a claims co-operation clause (which was worded as a condition precedent); and, second, what was the proper construction of the policy's excess provisions.
OMEX issued proceedings in Ontario in January 2010 and XL (the managing agent for syndicate 990) issued proceedings in London in February 2010. Mr Justice Christopher Clarke explained that in order for the claim to proceed in London XL would have to, amongst other things, show that England was the forum conveniens (i.e. the proper place for the claim to be brought). The judge set out the criteria he would use when making such a decision including: natural forum, nature of dispute, applicable law, location of the parties and costs. The parties basically agreed, although used different routes to get there, that the dispute should be governed by English law.
The judge found that, unlike the Ontario court, the English court was used to hearing reinsurance disputes and those involving Lloyd's specifically. He also found that, although the Ontario court may apply English law, there was a danger that it would utilize s.123 of the Insurance Act (Ontario) 1990 which allowed the court to overlook a reinsured's non-compliance with a condition precedent such as the claims co-operation clause in the policy in question. Clarke J found that allowing the claim to be heard in Ontario would potentially deprive XL of a defence upon which it should be able to rely. Mr Justice Christopher Clarke did not consider any of the other factors in favour of Ontario as a forum overrode his decision that the forum conveniens was London.
The case is a useful example of how the English courts, in a non-EU context, will consider the proper forum for a claim.