Disputes between insurers and arbitration

In Youell v La Reunion Aerienne [2009] EWCA Civ 175 the Court of Appeal has confirmed that jurisdiction over a dispute under a contract between insurers that contains an arbitration clause is to be resolved by reference to the nature of the dispute and not by reference to the arbitration clause. Thus if the English court has jurisdiction over the dispute by reason of the fact that the claim is for a sum payable in England, the existence of an arbitration clause does not remove the jurisdiction of the English court where there is no application for a stay of the English proceedings.

Youell: the insurance arrangements

The claimants were London market insurers and the defendants were French market insurers. In the 1993 year of account both markets subscribed to an insurance programme covering a French group of companies, including Turbomeca which manufactured and sold helicopter parts. The French market share was 75% and the London market share was 25%, the total sum insured being FFr5bn. Each market issued a separate policy, but the London policy was stated to be ‘as and to follow French Warranty Company with regard to terms (excluding rate), conditions, agreements and amendments’, and it was common ground that both policies were governed by French law. The French policy contained an arbitration clause that provided for arbitration in Paris, and evidence of French law showed that the arbitration clause would have been regarded as incorporated into the London policy.