When parties settle a dispute between them, the normal expectation is that will be an end to the matter, subject to any further issues as to the terms of settlement. However, in unusual cases a party may attempt to revive the dispute by bringing fresh proceedings in a different jurisdiction. This was the difficult situation faced by insurers in the recent case of The Alexandros T, and the Supreme Court’s decision will give some comfort to those seeking certainty and finality from their settlement agreements.

The case concerned insurance claims arising out of the loss of the vessel the “Alexandros T”. English proceedings were issued against the insurers which were settled in 2007 by way of agreements which were governed by English law and included English jurisdiction clauses and indemnities in favour of the insurers. However, in 2011 Greek proceedings were issued by the owners in what were described as “materially identical form” to the earlier English proceedings. The insurers contended that by bringing the Greek proceedings, the owners had breached the settlement agreements and sought damages and indemnities from the English courts, together with declarations that the Greek proceedings fell within the terms of the releases in the settlement agreements. The owners applied to stay the English proceedings, arguing that the English court was either obliged to order a stay under Article 27 of the Brussels I Regulation on the basis that the proceedings involved the same cause of action as the Greek proceedings, or that it should do so by exercising its discretion under Article 28 of the Regulation, on the basis that the Greek and English proceedings were related. Following conflicting decisions from the High Court and Court of Appeal, the matter fell to be determined by the Supreme Court.

Dealing initially with the insurers’ arguments under Article 27, the Supreme Court agreed that the insurers’ claims in the English proceedings did not involve the same cause of action as the Greek claims. In order for the claims to involve the same cause of action, the essential question was whether the claims were mirror images of each other and, at least in respect of the claims for damages for breach of the settlement agreement and for an indemnity, the Justices were agreed that they had neither the same object nor the same cause. Although, if the insurers were successful, the indemnity and damages claims would neutralise any benefit to the owners in the Greek claims, success in the indemnity and damages claims would not be logically inconsistent with success in the Greek claims. As to Article 28, although it was accepted that the two sets of proceedings were related, insofar as the insurers were seeking to enforce the provisions of the settlement agreements, the Supreme Court considered that the English court rather than the Greek court was probably the court first seised (ie, essentially where proceedings were first brought), and thus there was no discretion to stay the English proceedings. In any event, the Supreme Court would not have exercised its discretion to stay the proceedings, particularly in light of the jurisdiction clause in favour of the English court in the settlement agreements.

The Supreme Court’s decision no doubt came as a relief to insurers, who will not now have to await the outcome of the Greek proceedings and can instead proceed in England in relation to their claims for enforcement of the settlement agreement. However, it is worth noting that the Justices were not agreed as to whether the insurers’ claims for declarations that the Greek proceedings fell within the terms of the releases in the settlement agreements involved the same cause of action as the Greek proceedings. This was a matter that the Justices considered would need to be referred to the Court of Justice of the European Union, unless the claim was abandoned by insurers. We may not, therefore, have heard the last word on the finality of the settlement agreements.

In the matter of “The Alexandros T” [2013] UKSC 70