Sulamerica CIA Nacional De Seguros SA v Enesa Engenharia SA
 EWCA Civ 638
The claimant was the insurer of hydro electric facilities in
Brazil. Both parties were Brazilian, the risk was situated in
Brazil and there was a dispute resolution clause which provided
that the policy was governed by the law of Brazil and that all
disputes were to be subject to the exclusive jurisdiction of the
Brazilian courts. The policy also provided that the parties would
seek to have any disputes resolved amicably by mediation and that
if mediation failed then any disputes as to the amount payable
under the policy were to be resolved by arbitration with its seat
in England. A dispute arose as to alleged change of risk under the
policy. The parties were unable to agree on a mediation procedure,
and the defendant commenced judicial proceedings in Brazil.
The Court of Appeal granted the claimant an anti-suit injunction
so that the dispute could be referred to arbitration in London.
The law applicable to the arbitration clause was English law.
Moore-Bick and Hallett LJJ (Lord Neuberger MR leaving the point
open) ruled that there was generally a link between the law
applicable to the policy and the law applicable to the arbitration
clause so that an express choice of substantive law would amount to
an implied choice of the law of the arbitration clause, but on the
facts there was a closer link between the seat of the arbitration
and the law applicable to the arbitration clause.
The agreement to mediate did not constitute a legally binding
obligation as the mediation clause did not specify a procedure for
the mediation or for the appointment of a mediator, so there was no
condition precedent of mediation pending the commencement of
The arbitration clause applied to disputes of both liability
and quantum, and even if that was wrong then a dispute as to
whether anything was payable at all was a dispute as to the amount
At first instance Cooke J held that in the case of a conflict
between jurisdiction and arbitration provisions, arbitration
prevailed and the jurisdiction clause was confined to enforcement
of the award or cases in which the parties agreed to waive the
arbitration clause. Permission to appeal against that ruling was
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The failure of a party to call a witness does not necessarily give rise to an adverse inference being drawn in accordance with Jones v Dunkel (1959) 101 CLR 298. An unfavourable inference is drawn only if evidence otherwise provides a basis on which that unfavourable inference can be drawn.
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