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CGU International -v- AstraZeneca Insurance

1st Dec 2005

[2006] Lloyd’s Rep. IR 409; [2007] 1 Lloyd’s Rep 142

Alistair Schaff QC led David Edwards; Christopher Butcher QC led Stephen Kenny; and Andrew Wales were involved in this case which concerned the scope of coverage of an English law reinsurance contract, covering an underlying English law policy containing a US service of suit clause which obliged the insurer submit to and abide by the outcome of US proceedings. The judge accepted reinsurers’ argument that the coverage was unaffected by the US service of suit clause. Leave for a further appeal to the Court of Appeal was refused. An application to the Court of Appeal for permission to appeal against the refusal raised some interesting arguments about the Court of Appeal’s powers under the Human Rights Act 1998 – see [2006] EWCA Civ 1340, [2007] 1 Lloyd’s Rep. 142 (C.A.) – but was also ultimately refused.

Reinsurance – Conflict of laws – Applicable law – Direct policy governed by English law – US service of suit clause – Whether direct policy to be construed under law of Iowa – Construction of reinsurance agreement – Effect of “follow the fortunes” clause