In Ace Capital Ltd v Cms Energy Corporation – Lawtel 27.8.08 the Commercial Court considered the effect of a clause in an insurance policy which provided that all disputes arising out of the policy were to be referred to arbitration in England and a service of suit clause which provided that, in the event of the failure of the underwriters to pay any amount claimed to be due under the policy, the underwriters would, at the insured's request, submit to the jurisdiction of a court of competent jurisdiction within the US. The insured submitted that the service of suit clause entitled it to sue the underwriter on the merits in the United States, notwithstanding the existence of the arbitration clause, as the parties had agreed that the arbitration clause in no way infringed on the rights accorded by the service of suit clause.

After considering the US case law and the English law, it held that the service of suit clause did not operate so as to exclude from arbitration a money claim whenever the insured requested the underwriter to submit to the jurisdiction of a competent US court. By instituting proceedings in the US courts, the insured was breaching its contractual obligation to arbitrate, so it was appropriate to grant the injunction.