GENERAL MOTORS CORPORATION V ROYAL & SUN ALLIANCE INSURANCE PLC

[2007] EWHC 2206 (Comm), Queen’s Bench Division, Commercial Court, Mr Justice David Steel, 2 October 2007

Insurance (liability) – Conflict of laws – Proceedings commenced in Michigan by assured – Proceedings then commenced by assured in England – Consent order made by English court – Whether consent order amounted to exclusive jurisdiction agreement – Whether anti-suit injunction should be granted against assured

The claimant, a company incorporated in Delaware, faced a large number of claims for asbestos and environmental damage. The defence costs had amounted to $100 million and were rising. The claimant contended that it was covered by a liability policy granted by RSUSA, an insurer incorporated in Delaware which was a subsidiary of the second defendant, a UK company. The claimant contended that it was covered by RSUSA, and that RSUK was liable for the costs and claims because it had orchestrated a refusal to pay the claimant in such a manner as to expose itself to tortious liability. In December 2003 GM and RSUSA entered into a standstill agreement, and on 4 January 2005 GM gave 21 days’ notice to terminate the agreement. Proceedings were then commenced by RSUSA in Delaware seeking a declaration of non-liability and on the same day GM commenced proceedings against RSUSA in Michigan seeking a declaration of liability. There followed a series of rulings in the US, by which the Michigan court refused to dismiss GM’s application against RSUSA by reason of forum non conveniens and joined the second defendant to the proceedings, and the Delaware court denied GM’s motion to dismiss RSUSA’s application on forum non conveniens grounds. In May 2006 GM commenced proceedings against the second defendant, and its UK subsidiary the first defendant, in England. Those proceedings duplicated the Michigan action. The defendants accepted service and did not challenge the jurisdiction of the English courts. On 24 July 2006 a consent order was made by reason of which the parties agreed not to challenge the jurisdiction of the English courts. Subsequently, GM commenced a fresh action in Delaware against the first defendant and certain officers and directors of RSUSA: the claim against the first defendant duplicated that in the English proceedings. The defendants sought and obtained an anti-suit injunction. David Steel J held that the effect of the consent order was to create an exclusive jurisdiction agreement in favour of the English courts even though it did not say so in express terms, and that in the absence of strong reasons for allowing the Michigab action to continue GM would be restrained from pursuing the proceedings in Michigan.