Stay of English proceedings

The effect of the Brussels Regulation, Council Regulation (EC) No 44/2001, on the common law discretion of the English courts to stay their own proceedings on forum non conveniens grounds, has been profound. Certain propositions can be put forward. If there are earlier parallel proceedings elsewhere in Europe, a stay of the English action is mandatory. If the English proceedings are first, and the defendant is domiciled in England, then the English courts have no power to stay and must hear the case. One unresolved question is, however, whether the English courts are entitled to stay proceedings brought against a defendant domiciled in Enlgand if there are parallel proceedings outside Europe. The point arose in an insurance context in Royal & Sun Alliance Insurance plc v Rolls-Royce plc [2010] EWHC 1869 (Comm), although Blair J was able to dispose of the case without having to answer the question.

RR: the facts

RR was insured by a number of insurers under a primary layer “Ledger Policy”. This covered RR and all of its subsidiary and associated companies in respect of general liability risks, construction all risks and professional indemnity risks for the period 1 May 1997 to 30 April 2002. There were in addition three excess layer policies covering the two-year period 1 May 2000 to 30 April 2002 in respect of general liability, with the second and third excess layer policies also covering financial losses arising from claims brought in the US. The policies were governed by English law and the insurers were predominantly English.