BRITISH-AMERICAN INSURANCE (KENYA) LTD V MATELEC SAL AND ANOTHER

[2013] EWHC 3278 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Walker, 29 October 2013

Insurance - Dispute resolution - Insurance and reinsurance agreement in a single policy - Endorsement specifying Kenyan exclusive jurisdiction and London arbitration - Whether endorsement applied to insurance - Whether there was an obligation to arbitrate - Rectification - Estoppel

In February 2012 BAIC, a Kenyan insurance company, agreed to insure two contractors engaged in constructing a power plant in Kenya against the loss of project cargo in the course of marine transit. The risk was to be reinsured 95 per cent by three reinsurers, and the contract contained both insuring and reinsuring terms. The original dispute resolution clause in the policy appeared to provide for the exclusive jurisdiction of the courts of Kenya, although there was also arbitration wording. On the request of the contractors' financiers, a policy endorsement was sought in March 2012. This provided: "This reinsurance shall be governed by and construed in accordance with the law of England and Wales and each party agrees to submit to the exclusive jurisdiction of the Courts of Kenya. All disputes arising hereunder shall be submitted to a competent court in Kenya. Seat of Arbitration: London Appointor: Appointing officers of ARIAS (UK)". A dispute arose as to whether the clause applied to the insurance element of the contract. Walker J held that it did so apply.