CHARTER REINSURANCE COMPANY LTD V FAGAN

(1996) 5 Re LR 411

House of Lords

Before Lord Goff of Chieveley, LordGriffiths, Lord Browne-Wilkinson,Lord Mustill and Lord Hoffmann

Excess of loss - Whole account and aviation - “actually paid” - Reinsured in provisional liquidation - Assumption that claims presented to reinsured, that they had agreed their liability in respect of those claims, but by reason of inability to pay debts as and when they fell due they were unable to pay those claims - Whether reinsurers liable to indemnify reinsured in respect of sums which had not been paid, either by a transfer of funds or by a settlement in account, although the amount of the loss had been agreed - Whole account treaties incorporating Reinsuring Clause, Liability Clause, “Ultimate Net Loss” clause - Aviation treaty incorporating Reinsuring Clause, Original Aviation Loss Warranty Clause, Definition of Loss Clause and Ultimate Net Loss Clause - Approach to interpretation of contracts - Reasonableness.