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    UK: ACE and Others to Serve Proceedings on Howden Out of Jurisdiction

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    In Ace European Ltd & 5 ors v (1) Howden Group (2) Howden North America Inc (formerly Howden Buffalo Inc) [2012] EWHC 2427 (Comm), Mr Justice Field upheld his prior order granting permission to the claimant insurers (the Claimants), to serve proceedings seeking declaratory relief, out of the jurisdiction.

    The Claimants were excess public and products liability insurers of the first Defendant and its subsidiary companies from 1995 to 2002. The second Defendant had received thousands of asbestos-related claims in relation to asbestos products manufactured or distributed by it or its predecessors. It had, in turn, brought various proceedings against several of its insurers (including the second and third Claimants) in Pennsylvania, in relation to these claims. These proceedings are ongoing.

    In a separate action in England, the Claimants sought declaratory relief as to the meaning and effect of the 14 policies in question, including statements that: (i) the policies were governed by English law; (ii) on a proper construction of the policies, the Claimants were not liable for certain asbestos-related claims occurring or notified outside of the policy period.  In September 2011, the Claimants were granted permission by Field J to serve proceedings for this declaratory relief, on the Defendants out of the jurisdiction.

    In the present application, the Defendants sought to set aside this grant of permission, submitting that the Claimants had failed to establish a good arguable case that the proceedings served a useful purpose, and / or that the Defendants had failed to show that England was clearly the appropriate forum.

    Field J stated it was not appropriate to decide the application by simply following the Court of Appeal’s decision on a very similar recent application (reported here and here), and instead applied the relevant principles to the facts of the present case.

    Utility

    In an interlocutory hearing, the Pennsylvanian court had concluded that it was unlikely English law would apply to the policies in question, but Field J decided there remained a real prospect that English law would be held to be the governing law, in which event an English judgment would be of considerable assistance to the Pennsylvanian court.

    If made, he considered the declarations would be useful in resisting enforcement of a Pennsylvania judgment that ignored the express or implied choice of law of the parties, as the Claimant London market insurers had a “legitimate expectation that the parties to the policies would be bound by their express or implied agreement that the policies were governed by English law”.

    Appropriate Forum

    Noting the general principle that “a court applies its own law more reliably than does a foreign court”, he said this pointed strongly in favour of England as the appropriate forum.

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