The ill-fated vessel "Atlantik Confidence" caught fire and sank in 2013. In The Atlantik Confidence [2016] EWHC 2412 (Admiralty), Teare J held that she had been deliberately scuttled by her Owners. The end of this saga spelled the beginning of another. Aspen Underwriting Ltd (the "Insurers"), who were the vessel's hull underwriter, had paid out US$22m to Credit Europe Bank NV (the "Bank"), the assignee of the policy, in settlement of the Owners' claim to be indemnified. But given the scuttling of the "Atlantik Confidence", they launched High Court proceedings against the Owners and the Bank to claw this money back.

The Dutch Bank invoked its right to be sued in The Netherlands under Articles 4 and 14 of Brussels Regulation Recast (Regulation (EU) 1215/2012) (the "Regulation"). The High Court and Court of Appeal rejected their jurisdictional challenge, but in Aspen Underwriting Ltd v Credit Europe Bank NV [2020] UKSC 11, they prevailed before the Supreme Court.

Lord Hodge gave the judgment of the Court, holding that the Bank could only be sued on its home turf for these reasons.

First, the Bank was not bound by the exclusive jurisdiction clause in favour of the Courts of England and Wales in the insurance policy. While the Bank could not assert its assigned rights inconsistently with the terms of the policy, it had not asserted any rights through the commencement of legal proceedings: [26]-[30]. It was the Insurers who were suing the Bank, not vice versa.

Second, though the Insurers were seeking to avoid their settlement agreement with the Owners on grounds of the Owners' misrepresentation and the Insurers' mistake, their claim was nonetheless a "matter relating to insurance" under Chapter II, Section 3 of the Regulation: [34]-[41]. Section 3 was concerned not only with the rights of parties to an insurance contract, but also of beneficiaries and injured parties, i.e. nonparties such as the Bank. In any case, the alleged fraud of the Owners for which the Bank was said to be vicariously liable would inevitably entail a breach of the insurance contract.

Third, the Bank was entitled to rely on the protection afforded by Chapter II, Section 3 of the Regulation, including Article 14(1) which provided that an insurer may sue only in the defendant's domicile: [60]. Notwithstanding Recital 18 to the Regulation, which stated, "In relation to insurance, consumer and employment contracts, the weaker party should be protected by rules of jurisdiction more favourable to his interests than the general rules", this protection was not premised on the person sued by the insurer being the "weaker party" (which the Bank was not): [43].

This ruling is likely to outlive Brexit. The Regulation will govern until the expiry of the transition period on 31 December 2020. After that, the present indications are that the UK will segue from the Regulation to the Lugano Convention, Article 12 of which mirrors Article 14.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.