UK: Insurance And Reinsurance Update - 29 May 2012

Last Updated: 7 June 2012
Article by Nigel Brook

Welcome to the eighteenth edition of Clyde & Co's (Re)insurance and litigation caselaw weekly updates for 2012.

These updates are aimed at keeping you up to speed and informed of the latest developments in caselaw relevant to your practice.


  • Sucafina SA v Rotenberg
    Court of Appeal considers the status of various arbitration awards and whether a provision in an arbitral institution's rules regarding payment of its costs invalidated a final and binding award.
  • Montpellier Estates v Leeds City Council
    Court considers an application for disclosure of material on computers belonging to a party's advisers.
  • Societe Generale v Saad Trading
    Court of Appeal considers whether a debtor should be ordered to pay the judgment debt in order to pursue its appeal and a security for costs application.
  • Joint Stock Asset Company v BNP Paribas
    Court of Appeal case on whether an anti-suit injunction could be made against a non-party to an arbitration agreement.
  • Joyce v O'Brien
    Insurers deny liability based on ex turpi causa principle.
  • Dorchester Property Management v BNP Paribas
    The court interprets a non-disclosure clause in an agreement.

Sucafina SA v Rotenberg

Status of various arbitration awards/whether provision in arbitral institution's rules regarding payment of its costs invalidated final and binding award

Section 39 of the Arbitration Act 1996 allows the parties to agree that the tribunal may make a provisional award (which is subject to the tribunal's final award on the merits). Section 47 allows the tribunal to make awards on different issues ("partial awards") - such awards are final and binding on the parties.

In issue in this case was the status of certain "appeal interim awards" made by a Board of Appeal. The appellant sought to argue that these awards, although they represented the Board of Appeal's final decision on the matters with which they dealt (and it did not intend to revisit those matters), they remained conditional until a further award was made which operated to ratify them (pursuant to the arbitral institution's rules). The Court of Appeal rejected that argument for the following reasons:

  1. There was no express or implied agreement by the parties to exclude section 47 of the Act; and
  2. An award is either final and binding or it is not. It is unfortunate that the drafters of the Act used the term "interim" as it is capable of giving rise to confusion. Here, the appeal interim awards amounted to partial awards under section 47.

A further rule of the arbitral institution provided that if the an appeal award was not taken up (eg because fees and costs were not paid in time) "the original award of the arbitrator(s) or umpire shall become final and binding immediately". Despite that wording, the Court of Appeal held that "no arbitral body of standing in London would have drafted ...a provision that was intended to have the effect that a final and binding award on an issue would be rendered nugatory because a fee for a subsequent award was not paid, given powers to take security for its fees (see [relevant arbitral institution rule]) and the powers in s.56 of the 1996 Act. The construction contended for by [the appellant] would, far from making any commercial sense, be damaging to the standing of the arbitral body and inimical to the proper conduct of arbitration, in the light of the common practice to make partial awards existing at the time the rules were drafted and as is reflected in the 1996 DAC report. No one with any understanding of arbitration law and practice or commercial dealing could have intended such a result".

The rule in question could only be given effect by reading it as referring to that part of the umpire's award that remained extant after the appeal interim awards. The Court of Appeal went on to find that the umpire's award on costs did remain extant and so the appellant was entitled to enforce that part of the umpire's award.

COMMENT: Section 56 of the Act (which cannot be excluded by the parties) provides that the tribunal may refuse to deliver an award until its fees and expenses have been paid in full. Where an award has, however, been released prior to payment, this case confirms that the award itself will remain binding even if the fees are not subsequently paid (notwithstanding any contrary provision in the arbitral tribunal's rules). The only sanction that the arbitrators will have in such a situation will be to sue for their fees.

Montpellier Estates v Leeds City Council

Disclosure of material on advisers' computers

One of the issues in this case was whether the court should order the claimant to carry out a further electronic search of material stored on the servers, desktops and laptops of twelve named individuals who are the claimant's professional advisers in seven firms. That is an unusual application but the defendant argued it was necessary because claimant alleged the defendant had made deceitful statements at meetings at which the advisers were present.

The claimant argued (inter alia) that it had no legally enforceable right to search this material because a professional's own working papers belong to him and not his client. Beatson J said:

  1. Apart from the issue of "control", he would have been inclined to order a targeted and staged search of the servers and computers of the claimant's key advisers, provided that was not disproportionate: "A strong case would have to be made for what is likely to be a very large undertaking".
  2. As to the control issue, the defendant had sought to argue (relying on textbook commentary) that the CPR had "made inroads" on the concept of "control". Reference was made to CPR r35.9 (which allows the court to direct a party which has access to information which is not reasonably available to another party to provide the information). The judge held that that rule was not relevant here, though, because it is confined to information needed for instructing an expert (even though there is no express provision to that effect in the rule). Nor was CPR r18.1 (which gives the court power to order a party to "give additional information in relation to" any matter in dispute in the proceedings) relevant. Textbook commentary has only stated that "it may be that, by analogy with the old case law on interrogatories, a party can in effect be obliged to make reasonable inquiries, eg of servants or agents" (emphasis added). The judge concluded that he should not make the requested order. There was little evidence about the access the claimant had had to material on its advisers' servers.

However, the judge did note that the claimant appeared, in practice, to have had access and inspection rights to hard copies of notes taken by its advisers at meetings which they had attended and prior caselaw supports the argument that the court should adopt a broad view of the "right to possession" which could amount to "control" of a document. For that reason, he said that it would be "in the mutual interests" of the parties to enter into discussions about how the material sought by the defendant could be provided in a proportionate way.

Societe Generale v Saad Trading

Whether debtor should be ordered to pay judgment in order to pursue appeal/security for costs application

The respondent applied for an order that the appellants pay the amount of the judgment awarded against them as a condition of pursuing their appeal. The Court of Appeal reviewed the relevant caselaw and concluded that there were compelling reasons for imposing the condition (although the appellants were ordered to pay US$ 5 million and not the whole judgment debt of over US$ 50 million). One of the arguments considered by the Court of Appeal raised "difficult question of principle as to whether or not this court can legitimately impose a condition that a judgment debt (or part of it) be paid into court where, effectively, this will require an "owner", or others, such as a director, or shareholder, or backer or other interested person, to fund that condition. (I emphasise that I am not dealing here with security for costs)". It was concluded that, in the absence of exceptional circumstances, the court should not do so because this would potentially amount to an indirect way of obtaining enforcement with the funds of a third party (in the event that the appeal is lost). Alternatively, if the funds brought into court are to continue to be treated as belonging to the third party, there is no point in the exercise because it does not benefit the respondent/judgment creditor. However, there is no absolute bar. In this case, the facts were said to be exceptional - the third party owned 90% of an appellant's share capital and had provided a personal guarantee.

The Court of Appeal also found that it was not acceptable for the appellants to be able to pursue their appeals whilst, at the same time, continuing to disobey the orders of the court to pay the judgment debt). The respondents had also sought security for costs in the amount of £330,000 (the court having already ordered the appellants to pay £250,000 costs). The Court of Appeal held that the amount sought by the respondents was excessive. The appeal was set to last for 1 to 1.5 days and security in the amount of £90,000 was ordered.

Joint Stock Asset Company v BNP Paribas

Whether anti-suit injunction could be made against a non-party to an arbitration agreement

The first instance decision in this case was reported in Weekly Update 42/11. One of the issues on appeal was whether the claimant could obtain an anti-suit injunction against a non-party to an arbitration agreement (restraining that non-party from bringing proceedings in Russia challenging the validity of an agreement entered into between the claimant and the defendant to these proceedings). Burnton LJ recognised that "in the absence of a good collateral ground for restraint, an anti-suit injunction should not be granted against [the non-party] solely on the basis that the issue in the proposed suit is already the subject of arbitration proceedings involving an associated company". However, the Court of Appeal agreed that the claimant was entitled to an anti-suit injunction against the non-party in this case.

Although the non-party was not the alter ego of the defendant, and it it did not suffice that it was in the defendant's financial interests to support the non-party's case in Russia, an allegation of collusion had been proven: "the common control of [the defendant] and the [non-party], the importance of the transactions, the arbitration and the Russian Proceedings, the timing of the [non-party]'s action in commencing those proceedings, and the improbability of the [non-party] acting alone, are in my judgment sufficient to give rise to a serious issue to be tried as to whether or not the proceedings are collusive, so that in fact the [non-party] is the stalking horse for [the defendant]".

The claimant had applied for permission to serve the non-party out of the jurisdiction pursuant to the gateway in PD 6B para 3.1(3) which covers the situation where: "A claim is made against a person ('the defendant') on whom the claim form has been or will be served...and the claimant wishes to serve the claim form on another person who is a necessary or proper party to that claim." The issue here was whether it had been possible to say that the claim form "will be" served on the defendant at the time of application for permission to serve out, since at that time, the claimant had mistakenly believed that service was covered by a service of process clause (which had, in fact, been repealed).

The Court of Appeal held that the criterion had been satisfied because, had the judge been asked at the time, he would have given permission to serve the defendant at its solicitors' address in London. That was because the evidence shows that it may have taken 2 years to serve in Russia under the Hague Convention. The error about the process clause went to the question of where service would be effected but not as to whether service would be effected. If service on the defendant were set aside, service on the non-party would also be set aside (since the non-party would no longer be a necessary or proper party to the claim against the defendant). However, service on the defendant's London solicitors had been retrospectively validated by the judge and that decision was not appealed by the defendant.

Joyce v O'Brien

Insurers deny liability based on ex turpi causa principle

The claimant claimed against the first defendant (his uncle) following a road accident and after his uncle had pleaded guilty to driving carelessly. The second defendant (the uncle's insurers) defended the claim on the basis that the claimant and his uncle had been engaged in a common criminal enterprise (escaping from a burglary) at the time of the accident.

Cooke J found, on the facts, that the insurers had proven their case. He also accepted the insurers' arguments that the principle of ex turpi causa manifested itself in two related principles: (a) the law will not recognise the existence of a duty of care owed by one participant in a crime to another participant in relation to an act done in connection with the commission of that crime; and (b) as a matter of public policy, a claimant cannot recover compensation for loss suffered in consequence of his own criminal act. Here, the claimant and his uncle where not just engaged in criminal activity which gave occasion for the tortious act of the uncle - the facts giving rise to the claim were inextricably linked with the criminal activity. Furthermore, risk and danger had been inherent in the enterprise itself: "it is not possible to set a standard of care as to how fast the van should be driven, in circumstances where speed is necessary to get away and there is a need for the other co-conspirator to hang on desperately to the stolen items and the back of the open van in order to effect their joint objective of a speedy escape".

Nor is there any principle of proportionality which comes into play - the court is not required to consider the injury as against the heinousness of the crime which was committed.

Dorchester Property Management v BNP Paribas

Court interprets non-disclosure clause in an agreement

An agreement between the parties provided (inter alia) that they would keep all Confidential Information (as defined in the agreement) secret but that the defendant could disclose such Confidential Information as is necessary to its advisers and any third party providing funding and to procure that those third parties are bound by similar obligations of non-disclosure "and they shall be responsible for unauthorised disclosure, whether by it or any third Party to whom disclosure is made" (clause 4.2.1). The agreement further provided that the obligation to keep the Confidential Information secret would not apply to any information which "subsequently comes into the public domain" (clause 4.2.2). It was held as follows:

  1. The defendant will only be liable for unauthorised disclosure by third parties to whom it has passed Confidential Information. It will not be responsible for disclosures by the third party of information which was not passed to it by the defendant. The judge declined to decide whether, if information was passed by the claimant to a third party at the defendant's express or implicit request, the defendant could be held liable if that information was misused by the third party (but he did opine that that "may be sufficient" to found liability on the defendant).
  2. Although not required to decide the point, the judge said that it would be surprising if information which was in the public domain at the date of disclosure (or at the date of the agreement) did not fall within the exception for information which "subsequently comes into the public domain" (emphasis added). The judge held that disclosure to a third party (interested in providing third party funding) was not information which had come into the "public domain". The third party in question would be expected to be party to non-disclosure undertakings and that "does not seem to have anything to do with public domain".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Nigel Brook
In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.