UK: (Re)Insurance Weekly Update 36 - 2015

Last Updated: 19 October 2015
Article by Nigel Brook

Welcome to the thirty-sixth edition of Clyde & Co's (Re)insurance and litigation caselaw weekly updates for 2015

This week's caselaw:

Tidewater Marine International Inc v Phoenixtide Offshore Nigeria Ltd & Ors

Court considers the test for a respondent to a freezing order being allowed to use frozen assets to fund its defence

Clyde & Co (Mark Walsh and Harriet Defreyne Kelk) for claimant

The claimant obtained a worldwide freezing order against the respondents. It contained the usual provision permitting the respondents to spend a reasonable sum on legal advice and representation, but that before doing so, the respondents must tell the claimant where the money is to come from. The respondents subsequently wished to use funds in one of their accounts to fund their defence (funds in another account having become depleted), and when the claimant objected, permission was sought from the court.

Males J summarised the applicable legal principles as follows:

  1. Payments in the ordinary course of business are allowed following the grant of a freezing order, even if that results in the defendant's assets being completely depleted before judgment. As long as the payment is made in good faith, "the court does not enquire as to whether it is made in order to discharge a legal obligation or whether it represents good or bad business on the defendant's part".
  2. Where the respondent has no other assets with which to fund the litigation, "the ordinary rule" is that it should be allowed to use the frozen funds to finance its defence. However, it is possible to depart from that rule, in the interests of justice.
  3. The respondent has the burden of proving that there are no other assets which could be used to fund the litigation. Since the court will have already concluded that there was a risk of dissipation (which is why the freezing order was granted), judges are entitled to have a "very healthy scepticism" about unsupported assertions by the respondent.

Accordingly, the court will consider whether the respondent has other assets and also whether others may be willing to help fund the litigation. This can result in the wrong conclusion being reached by the court, but Males J held that this "should not deter the court from making the best assessment it can on the material available".

Here, the court was entitled to take into account the fact that the respondents had flouted court orders and were in contempt of court. The judge held that this case was exceptional, in that not only were the respondents in contempt, but it was only because of the contempt that the proceedings were continuing. Accordingly, the overall justice of the case required the court to deny the respondents access to the funds, even if that meant that the respondents would be left unrepresented. In any event, the respondents had also failed to persuade the court that they did not have access to any other funds.

Global Maritime Investments v OW Supply & Trading

Whether an agreement to submit to a jurisdiction amounted to an exclusive jurisdiction clause

One of the issues in this case was whether the following clause amounted to an exclusive jurisdiction clause: "With respect to any...proceedings relating to these general terms...each party irrevocably submits to the jurisdiction of the English courts".

There is prior caselaw which supports the following principle: If the clause is transitive (ie the parties submit disputes), it is exclusive, but if it is intransitive (ie the parties submit themselves),  it is non-exclusive. Teare J noted that that principle has been criticised by the textbook Dicey, Morris and Collins on the Conflict of Laws (which said the principle "would appear to have practically nothing to recommend it").

Although the clause in issue here is not transitive, the judge said that "the notion that each party is free to submit a claim to the jurisdiction of a court other than the English court in circumstances where each party has "irrevocably" submitted to the jurisdiction of the English court is difficult".

He concluded that the meaning which the clause would reasonably by understood to bear is that it conferred exclusive jurisdiction on the English courts for claims relating to the general terms. Even if that was wrong, the fact that proceedings relating to the general terms had already been commenced in England, meant that parallel proceedings could not be commenced elsewhere (either now or following the conclusion of the English proceedings).

Deutsche Bank v Sebastian Holdings

Whether a foreign director could be ordered to produce documents and information because he had been temporarily in England

The claimant obtained judgment against the defendant but the judgment debt has not been paid. The claimant obtained an order under CPR r71 to examine the foreign sole owner and director of the defendant and to order him to produce certain documents, and the defendant sought to have that order set aside. In Masri v Consolidated Contractors (see Weekly Update 30/09), the House of Lords held that the English courts do not have jurisdiction to order the examination of a foreign director of a debtor company under CPR r71.

However, in this case, the claimant argued that there was nothing to prevent an order being made against a director who is temporarily within the jurisdiction and Cooke J agreed with that argument. He accepted that Masri had said nothing at all about the situation where a non-resident was served within the jurisdiction. Although care should taken when making such an order generally, in this case, it would not be extravagant or exorbitant, especially since the director was not an independent person unconnected to the English litigation and judgment debt: "There is no threshold requirement of "exceptional circumstances" for an application of the kind made here, but [the director's] direct connection with [the defendant] and his interest in every element of its financial affairs and procurement of the transfers are exceptional in nature". Furthermore, no other foreign court would be likely to grant the relief being sought here. The defendant's application therefore failed.

Other News

CPR changes which came into force on 1st October 2015 include the following:

  1. The court's case management powers have been amended, to include the power to hear an Early Neutral Evaluation with the aim of helping the parties settle the case. More detail about Early Neutral Evaluations can be found here:
  2. A new Financial List had been introduced. Claims relating, broadly, to banking transactions issued in either the Chancery Division or the Commercial Court can be heard by an authorised Financial List Judge. If the claim raises issues of general importance to the financial markets (in relation to which immediately relevant authoritative English law guidance is needed), it can follow the Financial Markets Test Case Scheme. In particularly urgent or important cases, the trial may be heard by two Financial List judges or a Financial List judge and a Lord or Lady Justice of Appeal.
  3. Two pilot schemes will run until 30 September 2017:
    • the Shorter Trial Scheme. For commercial cases where which do not require extensive disclosure or evidence (and there are no allegations of fraud), a streamlined procedure should result in judgment within a year of starting proceedings. Different procedure rules will also apply – for example, disclosure will be limited to the documents on which a party relies plus particular documents requested by the other side. The costs budgeting rules will only apply if the parties agree.
    • the Flexible Trial Scheme. The parties can agree to adopt more flexible and simplified case management procedures.
  4. CPR r3.1A introduces new rules on directions and procedure where one of the parties is a litigant in person.

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.