01/08/2022

Quasi-contractual anti-suit injunction and direct-action statutes

QBE Europe SA/NV and another v Generali España de Seguros Y Reaseguros [2022] EWHC 2062 (Comm)

The Commercial Court (Foxton J) has today handed down judgment in the title case, granting the applicants (QBE) a quasi-contractual anti-suit injunction (ASI) to restrain direct action proceedings brought by Generali against QBE UK before the Spanish Court (the Spanish Proceedings).

In the Spanish Proceedings, Generali as subrogated insurer of a putative third party victim (REE) was suing QBE UK, in its alleged capacity as civil liability insurer of the motor yacht ANGARA. The claim in Spain is to recover an almost €7,700,000 indemnity that Generali had paid out to REE on account of damage that was alleged to have been caused by the ANGARA to an undersea power cable owned by REE. QBE’s position was that the Spanish Proceedings had been brought inconsistently with an arbitration agreement in its insurance policy with the owners of the ANGARA (the Policy), which it was said Generali had to respect. QBE argued as a result, the Spanish Proceedings should be restrained by an ASI.

Foxton J upheld QBE’s position.

The case concerned two main areas of law:

• Whether the statutory right that Generali was relying on in the Spanish Proceedings should be characterised as an attempt in substance to enforce a right contained in the Policy.
• If the right was characterised as contractual, whether a quasi-contractual ASI should be granted to restrain the Spanish Proceedings.

 

On (1) the Judge characterised the foreign direct action right being relied on as contractual. Applying the settled tests from The Prestige (No.2) [2015] EWCA Civ 333 and The Yusuf Cepnioglu [2016] EWCA Civ 386, the court focussed on the extent to which the direct right was circumscribed by the coverage restrictions in the Policy, and the evidence on Spanish law suggested that an insurer was only prevented from relying on ‘personal’ or ‘subjective’ defences against the direct action claimant. The Judge rejected arguments that the breadth of the arbitration agreement and an exclusion of the Contracts (Rights of Third Parties) Act 1999 altered the position.

On (2) the Judge applied the approach in The Yusuf Cepgnioglu to the grant of an ASI, viz. that The Angelic Grace ‘contractual’ approach applied, rather than the broader ‘vexatious and oppressive’ approach, rejecting the argument that the position was left open after The Yusuf Cepniolgu. In doing so the Judge rejected the submission that comity (at least in the way contended) plays a role as a strong reason against a quasi-contractual ASI, applying The Yusuf Cepnioglu.

The case is also an example of an ASI being granted on a quia timet basis in respect of QBE Europe, who has not yet been made a party to the Spanish Proceedings, but about which there were justifiable fears it would be upon certain events taking place.

QBE was represented by Oliver Caplin, instructed by Joe O’Keeffe and Mateusz Bek at Stephenson Harwood LLP.

Read the judgment.