United Kingdom / 30 July 2008 / England and Wales, High Court / Ace Capital Ltd v. CMS Energy Corp. / 2007 Folio 1635
| Country | United Kingdom |
| Court | England and Wales, High Court |
| Date | 30 July 2008 |
| Parties | Ace Capital Ltd v. CMS Energy Corp. |
| Case number | 2007 Folio 1635 |
| Source |
[2008] EWHC 1843 (Comm) | online: BAILII
|
| Languages | English |
| Summary | CMS Energy Corp. (“CMS”) was the insured party under a political risk insurance policy that was underwritten by Ace Capital Ltd (“Ace”). CMS brought court proceedings in the United States, claiming indemnity under the policy. Ace applied to the English High Court for an injunction to enjoin CMS from pursuing the U.S. proceedings. It relied on an arbitration clause contained in the policy providing for arbitration in London pursuant to the Arbitration Rules of the London Court of International Arbitration. CMS maintained that it was entitled to bring the U.S. proceedings under a so-called “service of suit” clause also found in the policy, which provided that, “in the event of the failure of [Ace] hereon to pay any amount claimed to be due hereunder, [Ace] hereon, at the request of [CMS], will submit to the jurisdiction of a court of competent jurisdiction within the United States”. The High Court granted the injunction. It held that the arbitration clause provided for all disputes arising under, out of, or in relation to the policy to be arbitrated. In so ruling, the Court emphasised the pro-arbitration policy of both the United Kingdom and the United States. In the Court’s view, moreover, its interpretation of the arbitration clause did not render the “service of suit” clause ineffective, insofar as it could still be relied on by CMS to bring proceedings before the U.S. courts to seek a declaration as to the arbitrable nature of the dispute, to compel arbitration, to declare the validity of an award, to enforce an award, or to confirm the jurisdiction of U.S. courts on the merits of the dispute in the event that the parties agreed to dispense with arbitration. According to the Court, the fact that the NYC guaranteed that there would be no difficulty enforcing in the United States an arbitral award made in London did not detract from these benefits of the “service of suit” clause. |
Attachment (1)
 Original Language Adobe Acrobat PDF |
