Applicable law and jurisdiction

The issue in Gard Marine & Energy Ltd v Lloyd Tunnicliffe [2009] EWHC 2388 (Comm) was whether a reinsured domiciled in Bermuda could bring an action in England against reinsurers domiciled in Switzerland. In resolving that issue, Hamblen J had to determine whether payment under a reinsurance agreement is to be made to the reinsured or to brokers acting for the reinsured.

Gard: the facts

Gard, a company domiciled in Bermuda, agreed to accept 12.5% of the risk under a property and business interruption insurance issued to Devon Energy Corporation, a US company. The policy ran from 1 July 2003 to 1 September 2005, subsequently extended by endorsement to 1 September 2007. The maximum sum insured was US$400m ‘any one accident or occurrence in respect of losses arising out of a Named Windstorm in the Gulf of Mexico’. Before confirming its participation, Gard asked its London brokers, AHP, to secure 100% reinsurance. Gard, through AHP, reinsured the entire risk under two excess of loss reinsurance slips. One was subscribed to by four London Market reinsurers, Advent, Ascot, Map and Axis) for 7.5% of the whole, and the other was subscribed to by Glacier, a Swiss reinsurer, for the remaining 5% of the whole. In each case the reinsurers agreed to ‘pay up to Original Package Policy limits/amounts/sums insured excess of US$250,000,000 (100%) any one occurrence of losses to the original placement’.