The parties entered into a reinsurance contract that incorporated the arbitration clause in the Joint Excess Loss Committee, Excess Loss Clauses. Clause 15.5 provided that:
"Unless the parties otherwise agree the arbitration tribunal shall consist of persons with not less than ten years' experience of insurance or reinsurance."
One party appointed Alistair Schaff QC as one of the arbitrators. The other party applied for an order that he be removed.
At first instance Teare J granted the order. He held that although Alistair Schaff QC had considerably more than 10 years' experience in insurance and reinsurance law, he was not qualified as an arbitrator within the meaning of clause 15.5. The judge felt bound to follow the decision of Morison J in Company X v Company Y, 17 July 2000. In that case Morison J had held that the words meant that the parties required a "trade arbitration", ie that the tribunal was to consist of persons from the trade or business of insurance and reinsurance. A QC with considerable experience of insurance or reinsurance law did not fall within this group.
The party who had appointed Alistair Schaff QC appealed.
Held (Court of Appeal):
The appeal was allowed. Company X v Company Y was wrongly decided. There was no such thing as insurance or reinsurance "itself" which was distinct from the law of insurance and reinsurance. Unless the parties had some special reason to exclude lawyers, a barrister specialising in the field of insurance and reinsurance for more than 10 years would naturally be regarded as qualified for appointment as an arbitrator. If the intention were to restrict the parties' freedom of choice by excluding such a person, clear words would be needed.
(Since this dispute arose, the JELC Clauses have been amended so that arbitrators must be persons "with not less than 10 years' experience of insurance or reinsurance within the industry or as lawyers or other professional advisors serving the industry".)
(Allianz Insurance PLC v Tonicstar Ltd v Allianz Insurance PLC [2018] EWCA Civ 434)
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