Reinsurance - Jurisdiction and the Brussels Convention

As is well known, the jurisdiction of the English courts over a reinsurance dispute depends upon whether the defendant in the proceedings is domiciled in the EC or EFTA or in some other jurisdiction. In the case of an EC/EFTA defendant, the jurisdiction rules in the Brussels or Lugano Conventions are applicable; in any other case jurisdiction depends upon the rules set out in what is now Part 6.20 of the Civil Procedure Rules, which replaces Order 11 of the Rules of the Supreme Court with effect from May 2000. The key question for many London market reinsurers following a dispute under the policy is whether they can apply to the English courts for a declaration of non-liability. Assuming that the contract is governed by English law or was placed in England, there is no jurisdictional barrier to such an application under CPR Part 6.20, and the only question will be whether the court in its discretion regards an English action for negative declaratory relief as “useful” in resolving the dispute between the reinsured and the reinsurers. By contrast, if the reinsured is domiciled in the EC or EFTA, the only question is jurisdiction. The application of the Brussels Convention to reinsurance has now been authoritatively considered by the European Court of Justice, in Group Josi Reinsurance Co SA v Universal General Insurance Co , July 2000, forthcoming in Lloyd’s Rep IR, although the case arose in the context of an action by the reinsured. The facts as stated are taken from the judgment of the European Court of Justice.