A clause provided that an insurance policy should be governed by Belgian law and that ‘any disputes arising thereunder shall be exclusively subject to Belgian jurisdiction.’ The underwriters avoided the contract for non-disclosure of material facts and submitted that the jurisdiction clause could no longer apply because there ‘is no contract and there was no contract when the Belgian proceedings were started. So the relations between the parties are no longer governed by the contract at all’ per Mr R A MacCrindle QC.
Held: The argument was that: ‘owing to the non-disclosure there was no true contract – no real consent by the underwriters – and that, on this basis, the contract itself falls down, including even the jurisdiction clause.’ That argument was rejected because there was a contract until avoidance and that the case was not like a case of ‘non est factum’ when the foreign jurisdiction clause might not apply at all. A claim for innocent misrepresentation would have also been regarded as falling within the words ‘any dispute arising thereunder’.
A collateral agreement, such as a jurisdiction clause, may be capable of taking effect even though the validity of the primary contract is in dispute, and a clause in an insurance policy submitting disputes ‘arising thereunder’ to a foreign jurisdiction was wide enough to cover the question of whether the contract could be avoided for non-disclosure.
Diplock LJ, Denning MR
[1967] 2 QB 590, [1966] 3 All ER 847
England and Wales
Cited by:
Cited – HIH Casualty and General Insurance Limited and others v Chase Manhattan Bank and others HL 20-Feb-2003
The insurance company had paid claims on policies used to underwrite the production of TV films. The re-insurers resisted the claims against them by the insurers on the grounds of non-disclosure by the insured, or in the alternative damages for . .
Cited – Fiona Trust and Holding Corporation and others v Privalov and others CA 24-Jan-2007
The court was asked whether when contracts have been induced by bribery and have been rescinded on discovery of the bribery, that constitutes a dispute which can be determined by arbitration in the context of a common form of arbitration clause.
Cited – Harbour Assurance Co (Uk) Ltd v Kansa General International Insurance Co Ltd 1993
The Court said that older (pre Heyman v Darwins Ltd) authorities about the width of arbitration clauses had to be approached with some care and that the words ‘arising from the contract’ have almost invariably been treated as ‘words of very wide . .
Cited – Premium Nafta Products Ltd (20th Defendant) and others v Fili Shipping Company Ltd and others; Fiona Trust and Holding Corporation v Privalov HL 17-Oct-2007
The owners of a ship sought to rescind charters saying that they had been procured by bribery.
Held: A claim to rescind a contract by reason of bribery fell within the scope of an arbitration clause under which the parties had agreed to refer . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 20 December 2021; Ref: scu.219462