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29.07.2016 Insurance

Simon Cooper

Simon Cooper Partner

In XL Insurance Company SE v AXA Corporate Solutions Assurance, AXA disputed the jurisdiction of the English court to hear and determine a contribution claim brought by XL, instead asserting that AXA should be sued in France, where it is domiciled. This application concerned questions of jurisdiction governed by the Recast Brussels Regulation 1215/2012. This provides that a person domiciled in a Member State may be sued in another Member State “in matters relating to a contract, in the courts for the place of performance of the obligation in question”  and “in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur”.

XL and AXA were co-insurers of the US company Connex. In 2008 there was a serious collision between a freight train and a passenger train operated by Connex and 24 people died whilst many more were injured. A Fund of US$200 million was established for the victims, into which XL contributed US$65 million. AXA refused to contribute to the Fund on the basis that its coverage was in excess and therefore was not triggered. XL claimed that this was a case of double insurance and sought a contribution from AXA. AXA asserted that the action was a matter related to a contract but that the English court had no jurisdiction because the place of performance of the "obligation in question" was not England. XL argued that the claim was a claim in tort and the place where the “harmful event” occurred was England so the English court had jurisdiction.

The court held that this was not a matter relating to a contract since AXA had no contractual obligation to make any contribution to XL. AXA had sought to avoid this problem by arguing that it had a contractual obligation to indemnify its insured which it failed to discharge but the court held that it was not possible to rely upon the contract of insurance, because the obligation to indemnify under that contract was not the obligation that XL sought to enforce. 

Nor was it a matter relating to a tort. XL’s overpayment could not be characterised as a “harmful event”. XL’s claim was for contribution based on overpayment and it was immaterial whether AXA had or had not refused to pay before or after the overpayment was made. Moreover, if XL’s overpayment to the Fund was the “harmful event”, then the initial damage plainly occurred in California. If the “harmful event” was the accident, then again the damage occurred in California. On either scenario, there was no damage in England. 

Article authors:

Simon Cooper

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