MUNICIPAL MUTUAL INSURANCE LIMITED v SEA INSURANCE COMPANY LIMITED COMMERCIAL UNION ASSURANCE COMPANY PLC ROYAL INSURANCE (GLOBAL) LIMITED MARITIME INSURANCE COMPANY LIMITED NAVIGATORS & GENERAL INSURANCE COMPANY LIMITED INSURANCE COMPANY OF NORTH AMERICA (UK) LIMITED PRUDENTIAL ASSURANCE COMPANY LIMITED PEARL ASSURANCE PLC THE LONDON ASSURANCE ALBION INSURANCE COMPANY LIMITED GUARDIAN ROYAL EXCHANGE ASSURANCE PLC GENERAL ACCIDENT FIRE AND LIFE ASSURANCE CORPORATION PLC

[1998] Lloyd's Rep IR 421

COURT OF APPEAL

Before Lord Justice HOBHOUSE, Lord Justice BROOKE and Sir John VINELOTT

Facultative reinsurance contracts - Legal liability - Excess - Construction - Terms to be implied - Reinsurance of ports liability - Damage caused by groups of individuals over 18 months - Whether reinsurance contracts provided that loss or damage which arose over period spanning more than one period of insurance under underlying policy was to be treated for purposes of determining amount of reinsurers liability either: (i) by reducing reinsureds liability under underlying policy by amount of excess applicable in respect of each year and then apportioning resulting figure on “time on risk basis” between periods of insurance over which such loss and damage had occurred, or (ii) by apportioning reinsureds liability under underlying policy on “time on risk basis” between periods of insurance over which such loss and damage had occurred and then reducing resulting figures by amount of excess applicable in respect of each year.