Bellini (N/E) Ltd v Brit UW Ltd [2024] EWCA Civ 435
The Court of Appeal (Sir Geoffrey Vos MR, Males and Birss LJJ) have dismissed an appeal in which a policyholder which incurred business interruption losses as a result of the Covid-19 pandemic sought to “construe” the terms of a BI insuring clause by deleting or otherwise removing the express requirements for physical damage. Gavin Kealey KC and Harry Wright appeared for the successful insurer, Brit. The CA upheld the judgment of Clare Ambrose (before whom Harry Wright had appeared successfully).
The insuring clause in question was very similar to some of the disease clauses considered in the FCA Test Case, save that the coverage was expressed to be contingent upon physical damage. The insured sought to argue that something had “gone wrong with the language”, so that it was necessary to correct the error through contractual construction (applying East v. Pantiles (Plant Hire) Ltd (1982) 2 EGLR 111 and Chartbrook Limited v. Persimmon Homes Limited [2009] 1 AC 1101). The CA rejected this argument, which it characterised as an attempt to push the boundaries of correction by contractual construction too far ([17]). Construing the insuring clause objectively in its wider context, the damage requirement was clearly deliberate. The fact that the cover was consequently limited did not make it absurd and did not justify rewriting the contract.
In the course of its judgment, the CA reiterated the importance of the principle enunciated by Lord Clarke in Rainy Sky SA v. Kookmin Bank [2011] UKSC 50 that, where the parties have used unambiguous language, the court must apply it. This was a victory for contractual certainty against an attempt to expand the Chartbrook principle beyond its proper remit.
Gavin Kealey KC and Harry Wright were instructed by Leon Taylor, Oliver Saunders, Luke Mooney and Charlotte Marks of DLA Piper LLP, and by Gaynor Biggins and Davinder Chhatwal of Brit.
