COSMOS HOLIDAYS PLC V DHANJAL INVESTMENTS LTD

[2009] EWCA Civ 316, Court of Appeal, Sir Anthony Clarke MR, Lord Justice Toulson and Lord Justice Sullivan, 18 March 2009

Indemnity – Tour operator – Whether indemnity from hotel extended to losses occurring outside hotel – Whether settlement with customers was reasonable

Cosmos, a tour operator, entered into an agreement with Dhanjal, a Kenyan hotelier, for the provision of 20 rooms in the Traveller’s Beach Club in Mombasa. Clause 2(a) of the agreement provided that: “The hotelier shall indemnify and keep indemnified Cosmos against all losses, liabilities, claims or expenses for or in respect of injury (including death), loss or damage to persons or property which may arise from any cause whatsoever out of or in connection with the supply of services to Cosmos (excluding the negligence or default of Cosmos, its servants or agents but including any failure on the Hotelier's part to comply with the laws, decrees, regulations and codes of recommended practice referred to above)”. On 4 May 2000 nine of Cosmos’ clients staying at their hotel but at the time at a camp were attacked by a gang of armed men and they suffered property and other losses. Cosmos settled their claims after mediation, and sought an indemnity from Dhanjal. The Court of Appeal held that the indemnity clause was applicable: it extended to losses occurring outside the hotel; and the settlement entered into by Cosmos was reasonable.