ARTICLE 3 AND 5 BRUSSELS REGULATION

In Youell & Ors v La Reunion Aerienne & Ors – Lawtel 29.10.08 the applicant French insurer applied for an order that the court had no jurisdiction to determine the claim of the respondent English insurers. The applicant, who was domiciled in France, had been served with, and had acknowledged service of, an English claim form issued by the respondent that contained a declaration in standard form that the court had power under the Regulation to hear the claim. The applicant purported to commence arbitration in Paris in accordance with a Paris arbitration clause in the French policy as a means of pursuing its contribution claim against the respondent.

The respondent maintained that the Regulation applied, as the applicant was contending that its contribution claim was a contractual claim, and the place of performance of the respondent's obligation to pay was England.

The Commercial Court held that Section 3 of the Regulation had no application to the applicant’s claim against the respondent, as both parties were insurers and the section did not apply to proceedings between insurers. Section 3 was aimed at protecting a party perceived to be weaker economically and the protection was not to be extended to those for whom protection was not justified.

Section 3 of the Regulation deals with "Jurisdiction in matters relating to insurance". Article 8 of the Regulation provides:

In matters relating to insurance, jurisdiction shall be determined by this Section, without prejudice to Article 4 and point 5 of Article 5.

Article 5 (1) (a) provides:-

A person domiciled in a Member State may, in another Member State, be sued:

1(a) in matters relating to a contract, in the courts for the place of performance of the obligation in question.

The applicant’s argument based on art.1.2(d) of the Regulation, which provides that the Regulation shall not apply to arbitration, also failed, as that article would not oust the jurisdiction of a court under art.5.1 merely because the contract to which the claim related contained an arbitration clause.

Accordingly, the court ruled that pursuant to art 5.1(a) of the Brussels Regulation it had jurisdiction to hear the respondent’s claim for negative declaratory relief against the applicant.