Lloyd's Maritime and Commercial Law Quarterly
MULTI-PARTY INSURANCES AND THE CONFLICT OF LAWS
The Irish Rowan
It is common for large risks to be insured by a large number of insurers in many different countries, with the administration of the insurance being delegated to a single “leading underwriter”. It is also common for the leading underwriter to be an English insurance company or a Lloyd’s underwriter. The main question which arose in The Irish Rowan
1 was whether the fact that the leading underwriter is subject to the jurisdiction of the English courts permits the assured to bring a representative action in England, thereby indirectly conferring upon the English courts jurisdiction over insurers who would otherwise be outside the jurisdiction. A subsidiary point in relation to the possible extraterritorial ambit of the Third Parties (Rights against Insurers) Act 1930 arose but was not resolved by the Court of Appeal.
The facts
IS, the owners of the Irish Rowan, chartered her under a time charter to CS, to be used in liner trading. CS was, under the charter, liable to indemnify IS for any cargo claims made against IS by third parties. Various cargo claims were made against IS and were paid by it, and IS obtained two uncontested arbitration awards against CS for a total sum in excess of $225,000. The awards were not, however, honoured, as CS had by this time gone into liquidation in Bermuda, the place of its registration. IS obtained a further winding-up order against CS in England, and thereafter sought to bring an action directly against CS’s liability insurers in accordance with the Third Parties (Rights against Insurers) Act 1930.
CS’s liability insurance had been arranged in Antwerp through Belgian brokers, and was underwritten by 77 separate underwriters, located in various parts of the world, under 12 policy documents. About one-third of the risk had been accepted by English insurers, and the leading underwriter was an English company. The leading underwriter was nominated by a clause incorporated into the various insurances whereby the insurers conferred upon the leading underwriter the authority to bind them in respect, inter alia, of “all extensions or cancellations of risks, or of conditions, all fixing of premiums, all settlements or claims or contestations whatsoever and in general all dispositions of whatever nature”. Furthermore, the insurers expressly authorized the leading underwriter to sign policies on their behalves, and declared themselves liable for their respective shares of liability.
1. Irish Shipping Ltd. v. Commercial Union Ass. Co. Plc (The Irish Rowan)
[1989] 2 Lloyd’s Rep. 144.
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