Alistair Schaff QC

Alistair Schaff QC has a pre-eminent insurance and reinsurance practice. In 2009, he was named the Chambers Bar Awards Insurance Silk of the Year. He has been frequently short-listed ever since.

In Atlas Navios v Navigators (the “B Atlantic”) [2018] UKSC 26,the Supreme Court has now dismissed Owners’ appeal in relation to a claim for a total loss of a vessel which had been detained (and ultimately confiscated) by the Venezuelan authorities prior to sailing after a large consignment of cocaine had been found professionally strapped to the underwater hull. Owners, represented by Alistair Schaff QC, had claimed on their war risk policy, for a total loss by perils insured, and insurers relied on the standard ‘customs infringement’ exclusion. Although Flaux J rejected Owners’ case that there had been wrongful political interference in the judicial process, the Judge upheld the claim on the policy on the grounds that (1) as was common ground at trial and on appeal, the affixing of the drugs which had caused the detainment recklessly subjected the vessel to the risk of detainment and accordingly amounted to ‘malicious acts’ by persons unknown within the cover and (2) as a matter of construction, the standard policy exclusion did not apply where the relevant customs ‘infringement’ was no more than the manifestation of those insured ‘malicious acts’. The decision was reversed on appeal, as a matter of construction: [2106] EWCA Civ 808. However, the Supreme Court permitted insurers to withdraw its previous concession that the relevant acts amounted to ‘malicious acts’ and has now held that the ‘malicious acts’ cover was not engaged at all, the acts of the drugs smugglers (albeit reckless) lacking the necessary spite or ill will towards the vessel to qualify as ‘malicious acts’. The decision has significantly narrowed the scope of the malicious acts cover although the exclusion was also upheld on alternative construction grounds.

Alistair Schaff QC has recently been and continues to be involved in a string of high value and complicated liability insurance or reinsurance claims which are the subject of London arbitration and in which he has acted for insurers or reinsurers. Frequently governed by New York law, and often on the Bermuda Form, these arbitrations have ranged from pharmaceutical liabilities, liabilities for patent infringement, liabilities for personal injury (mesothelioma) and maritime pollution. In the case of Equitas v MMI [2018] EWCA (Civ) 991, the Court of Appeal has now given permission to appeal in the latest case involving mesothelioma liabilities within the ‘Fairchild enclave,’ this time at the reinsurance level. The appeal from the award of the judge arbitrator, Flaux LJ, will be heard next year.

In Involnert v Aprilgrange (the “Galatea”) [2015] EWHC 2225 (Comm), a superyacht had been inadvertently insured for 13m euros when it was known by its owners and managers to be worth no more than 8m euros. Leggatt J. upheld the defence of Insurers, represented by Alistair Schaff QC, that the policy had ben avoided for material non-disclosure. Standard Life v Ace [2012] EWHC 104 (Comm) involved a claim for £100m on Standard Life’s professional liability policy in respect of a cash injection made to top up the value of the Pension Sterling Fund as a result of falls in value in the Fund. Alistair Schaff QC acted for the insurance market. The litigation raised significant issues of fact and law, including the scope of Mitigation Costs coverage in a professional liability policy and novel and difficult questions of apportionment where mitigation costs are alleged to have been incurred for both insured and uninsured purposes. The Court of Appeal dismissed Insurers’ appeal from the first instance judgment in Standard Life’s favour: [2012] EWCA Civ 1713. Aioi v Heraldglen [2013] EWHC 154 (Comm) involved an appeal from an arbitration award in which the tribunal had held that the losses arising from the attacks on the World Trade Center arose from two events, rather than one event. Alistair Schaff QC acted for the Respondent who successfully upheld the award before Field J.

Two landmark victories were for the successful reinsurers in the leading case of Wasa v Lexington [2009] UKHL 40 in which the House of Lords considered the nature of a ‘back to back’ facultative reinsurance contract and held that reinsurers were not liable to indemnify the reassured in respect of an underlying liability for property damage which had occurred outside the policy period (see [2010] J.B.L. page 9 for an article which he has written on this case); and in Equitas v R&Q [2009] EWHC 2787 (Comm) in which Gross J. upheld the use of actuarial models as a means of kick-starting the LMX spiral in the aftermath of the incorrect aggregation and/or settlement of KAC / BA and Exxon Valdez losses.

Other selected cases:

• Orient Express Hotels v Generali [2010] EWHC 1186 (Comm) which involved business interruption claims arising out of Hurricanes Katrina and Rita, the ‘other circumstances’ clause and the vexed question of wider ‘vicinity’ damage (the case was appealed to the Court of Appeal but settled).
• Mopani Copper Mines v Millennium [2009] Lloyd’s Rep IR 158, which involved principles of construction concerning the admissibility of deleted words.
• Enterprise v Strand [2006] 1 LLR 500 in which he acted for the successful reinsurers in litigation involving the liability section of an energy policy.
• CGU v Astrazeneca [2006] Lloyd’s Rep. IR 409 which involved the scope of a ‘back to back’ reinsurance.
• GE Re v New Hampshire / Willis [2004] Lloyd’s Rep. IR 404, a film finance case in which he acted for the successful Claimant whose declining of liability on grounds of breach of warranty was upheld.
• Super Chem Products Ltd v American Life & General Insurance Co. Ltd [2004] Lloyd’s Rep. IR 446, in which he acted for the successful insurers on an appeal from the Court of Appeal of Trinidad and Tobago to the Privy Council in a case which upheld the insurers’ right to rely on timebar and claims co-operation conditions to deny liability for a claim on fire policies.
• Jan de Nul v Royale Belge [2002] 1 LLR 583 (CA) in which he acted for the successful insured who claimed under a third party liability policy in respect of liabilities for negligence and nuisance.
• Kingscroft v Nissan [1999] Lloyds’ Rep. IR 603, in which he acted for the successful Weavers stamp companies in their claim against their quota share reinsurers in a case which raised important issues as to how underwriting pools operated.
• Royal Boskalis Westminster v Mountain [1997] 2 All ER 929 (CA) in which he acted for the successful insurers in a claim involving illegality and duress arising out of the first Gulf War.
• The State of the Netherlands v Youell [1998] 1 LLR 236 (paint damage to submarines and issues of sue and labour).
• Fraser v Colton [1997] 1 LLR 586 (marine insurance – total loss)

Alistair Schaff QC has just been involved in the major Commercial Court action involving damage to a North Sea platform (the YME MOPUstor) which was fixed for 12 weeks in October 2018 and in which the claim was allegedly worth about $1bn. The claim involved highly complex factual and expert issues concerning causation of loss and the quantum of repair and settled in September 2018. He is also currently involved in a complex total loss case which is fixed for trial for 8 weeks next year.

More generally, and although a personal injury action would not normally be regarded as a ‘commercial dispute,’ he was instructed by the insurance market in what was a landmark ruling on the discount rate in relation to the award of lump sum damages. In Helmot v Simon, the Guernsey Court of Appeal had assessed damages by reference to an unprecedented negative discount rate which had the effect of increasing the multiplier to unprecedented levels. The Privy Council dismissed insurers’ appeal: [2012] UKPC 5.

He also acted in a major dispute involving Forward Freight Agreements. An important issue arose as to whether a settlement agreement could be construed in the light of statements allegedly made in the course of ‘without prejudice’ negotiations. The Supreme Court has held that they can be relied on for that purpose, reversing the Court of Appeal who had ruled to the contrary. Oceanbulk v TMT [2010] 3 WLR 1424 is an important authority on the (reduced) scope of the ‘without prejudice’ rule.

More historically, in Great North Eastern Railway v Railcare , he acted for the successful claimant in its claim for substantial damages for negligence against a supplier of rail parts arising out of a derailment, vindicating a very substantial claim of approximately £3m in the face of an unsuccessful plea of contributory negligence.

Alistair Schaff QC has a major international arbitration practice. He has acted as Counsel in commercial arbitrations for over 30 years, both in London and overseas, including in the Far East and in the Caribbean. His arbitration practice covers all aspects of international commercial disputes, both of a general commercial nature and involving insurance or maritime-related disputes. He recently appeared as Counsel in a significant case on enforcement of a Swedish arbitration award in Carpatsky v Ukrnafta[2020] EWHC 769 (Comm).He has recently been involved as Counsel in a number of significant New York law and Bermuda Form arbitrations concerning liability insurance involving a wide range of subjects such as pharmaceutical products, patent infringement and maritime pollution, as well as an English law arbitration involving liability for mesothelioma at the reinsurance level which went to the Court of Appeal: Equitas v MMI [2018] EWCA (Civ) 991 and settled shortly before an appeal to the Supreme Court.

Selected cases as Counsel:

• On behalf of a Ukrainian oil and gas company seeking to resist enforcement of a multi-million dollar SCC arbitration award.
• On behalf of a UK insurer and reinsured in connection with the allocation of mesothelioma losses.
• On behalf of various insurers concerning multi-million dollar claims in respect of third party liabilities in respect of the distribution of various pharmaceutical drugs and products, in respect of patent infringement and in respect of maritime pollution.
• On behalf of Far Eastern hotel resorts in Singapore and Bangkok arbitrations arising out of business interruption losses consequent on the tsunami.
• On behalf of personal accident reinsurers in a London reinsurance arbitration concerning the personal accident spiral.
• On behalf of London market insurers concerning hurricane damage in the Caribbean.
• On behalf of shipping interests concerning the commissioning and operation of a new port facility in Latin America
• On behalf of political risk underwriters in an LCIA arbitration concerning energy business in Argentina.
• On behalf of a Middle East government in a major ICC arbitration involving the successful defence of a two billion dollar dispute concerning an oil production sharing agreement with oil majors.

Alistair Schaff QC regularly sits as a commercial arbitrator in ICC, LCIA, UNCITRAL, LMAA and other arbitrations, as sole or party-appointed arbitrator or chair, dealing with a very broad range of international commercial disputes, both general and of an insurance or maritime nature.

Selected cases as Arbitrator:

Commercial disputes

• Contractual dispute involving valuation of Russian business (LCIA, chair).
• Procurement of large Far Eastern shipbuilding contract by bribes and secret commissions (co-arbitrator)
• Commodities contracts involving secret commissions (ICC, co-arbitrator).
• Application of gas pricing formula in long term agreement (co-arbitrator).
• Disputed transfer of shares in overseas company (LCIA, party appointed).
• Fraudulent signature of banking documents (co-arbitrator).
• Claim for wrongful termination of Chinese distribution agreement (LCIA, sole).

Insurance and reinsurance disputes

• US products liability insurance claim for building products (chair).
• US products liability insurance claim for ground water contamination (co-arbitrator).
• Aggregation of 9/11 World Trade Center losses (sole).
• P&I Club cover in respect of maritime pollution on French and Spanish littoral (reported on appeal asLondon Steamship v Spain and France, The “Prestige” [2015] EWCA Civ 333) (sole).
• Loss of hire reinsurance dispute concerning reinstatement and aggregation  (sole).

Maritime disputes

• No right of withdrawal for non payment of previous instalments of hire (upheld on appeal as The “Caravos Liberty” [2019] EHHC 3171 (Comm)  (party-appointed).
• Cost of compliance with 2020 low sulphur fuel oil regulations (co-arbitrator).
• Switching of hull numbers of new shipbuildings in two separate but related arbitrations (co-arbitrator; chair).
• Delayed demobilisation of drilling rig (ICC, sole).
• Charterparty repudiation, freight/lien/damages issues (chair, LMAA).
• West African off-sea drilling dispute (LMAA, co-arbitrator).

Alistair Schaff QC has always enjoyed and is experienced in handling difficult jurisdictional issues. In 2011, he acted in the long-running Masri litigation in connection with difficult issues concerning the scope and application of Articles 27 and 28 of the Brussels 1 Regulation: Masri v CCI [2011] EWHC 1780 (Comm).

Selected cases:

• ICSOP v Equitas [2013] EWHC 3713 (Comm)
• Equitas v Allstate [2009] Lloyd’s Rep. IR 227.
• Metro litigation (see, by way of example, [1999] 2 LLR 724)
• The “Tatry” / “Maciej Rataj” [1999] 2 WLR 181, in which he represented cargo interests before the European Court of Justice in the leading case involving Articles 21 and 22 of the Brussels Convention.
• Surzur v Koros [1999] 2 LLR 611 (a Court of Appeal decision on conspiracy by unlawful means) arose in a jurisdictional context, as did:
• Ocarina v Marcard Stein [1994] 2 LLR 524, the latter then proceeding into a major trial between the bank and its customer which was only concluded on appeal in 1999.

Professional negligence experience involves claims against financial service providers, solicitors, accountants/auditors and insurance brokers. In Clarks v In Focus [2014] EWCA Civ 118, Alistair Schaff QC led on a very important appeal to the Court of Appeal concerning claims for professional negligence against  a financial adviser which had been previously been referred to and determined in the complainants’ favour by the Financial Ombudsman Service (FOS). The Court of Appeal reversed Cranston J. and accepted the submission that the application of res judicata and merger principles prevent a complainant from bringing subsequent court proceedings for claims in excess of the maximum amount awardable under the FOS jurisdiction, in circumstances where the complainant has previously accepted a FOS determination for the maximum sum awardable and thereby rendered it final and binding under the Financial Services Act. Hehas acted for insurance brokers in relation to significant commercial litigation, first involving the insurance against product liability risks and and  secondly concerning the alleged loss of over $400m worth of gold in Turkey and the disputed insurance arrangements surrounding that gold. He is currently acting for liability insurers in relation to a number of mis-selling claims against financial advisers, concerning the question of aggregation.

Selected cases:

• Environcom v Miles Smith [2011] EWCA Civ 1152. The brokers had been found not liable on grounds of causation. The appeal was dismissed, essentially because the pleadings did not support the case sought to be argued.
• Dunlop Haywards (DHL) Ltd v Barbon Insurance Group Ltd [2010] Lloyd’s Rep. IR 149.  Acting for Nationwide Building Society in a professional negligence action against insurance brokers in a case raising issues as to the extent of brokers’ duties, contributory negligence and causation of loss.

In the shipping context, Alistair Schaff QC he has over 30 years of experience in litigation and arbitration, beginning with demurrage disputes and culminating in several of the leading cases on shipping law. He has recently been named the Chambers Bar Awards Shipping Silk of the Year for 2018 (and he was also named Legal 500 Awards Shipping Silk of the Year for 2015).

Alistair Schaff QC is currently acting for insurers in a complex total loss case. He recently acted for the shipowners in Atlas Navios v Navigators (the “B Atlantic”) [2014] EHHC 4133 (Comm); [2016] EWCA Civ 808; [2018] UKSC 26, in which the Owners claim for a total loss on their war risk insurance in circumstances where cocaine had been found strapped to the vessel’s hull and the Venezuelan authorities had consequently detained the vessel was ultimately dismissed. He acted for the successful super-yacht insurers in Involnert v Aprilgrange (the “Galatea”) [2015] EWHC 2225 (Comm), where the policy was avoided for non-disclosure of the fact that the yacht had been over-valued. He acted for shipowners in a major piece of Commercial Court litigation involving microbially induced corrosion and whether such corrosion amounted to or arose from ‘perils of the seas’ or ordinary wear and tear or poor maintenance.

In other recent cases, he has also acted for shipping interests in relation to the commissioning and operation of new port facilities in Latin America and for ship purchasers in a Singapore arbitration concerning alleged illegality in the form of alleged non-compliance with IACS shipbuilding regulations. He acted for shipowners in the latest recent case on Letters of Indemnity in The “Songa Winds” [2018] EWHC 397 (Comm) and in a case on COGSA 1992 in The “Baltic Strait”.

Other Selected cases:

• MacWilliam v Mediterranean Shipping Company (The “Rafaella S”) – He successfully represented the cargo claimants in  in what is now the leading case on the status of ‘straight’ bills of lading made out to a named consignee without the addition of the words ‘to order.’ Overturning the first instance judge (who, in turn, had upheld the decision of the arbitrators), the Court of Appeal held in [2004] QB 702 that ‘straight’ bills of lading are nonetheless ‘bills of lading’ for the purposes of the Hague-Visby Rules. The House of Lords upheld the Court of Appeal’s decision: [2005] 2 AC 423.
• Carewins v Bright Fortune (FACV no 13 of 2008) – He successfully represented the cargo claimants before the Court of Final Appeal in Hong Kong in a decision which not only reaffirms the presentation rule for ‘straight’ bills of lading but holds that an exceptions clause which excludes liability for the consequences of ‘misdelivery’ is not to be construed as protecting the carrier for breaching the presentation rule.
• Effort Shipping v Linden [1998] AC 605 – In this shipping case which went to the House of Lords, he acted for the successful shipowners in what is the leading case on dangerous cargoes.