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Settlement agreement with insurance companies precluding further claims against individual underwriters and employees.

The facts

On the sinking of the vessel and the loss of 26 of the 33 crew, the owners instituted an action against the vessel, fleet and hull insurers.

The action was settled with all 3 insurers, all 3 agreements containing “in full and final settlement” and indemnity clauses whereby the assured agreed to indemnify the insurers against any claims brought against them or their agents or servants in relation to the loss.

The settlements also contained English Law and exclusive jurisdiction clauses.

Prior to the settlements being reached, the owners attempted, unsuccessfully, to add a further claim for loss of profits based on the alleged failure of the insurers to settle the policy claims promptly.

Three years after the settlements had been entered into, owners instituted action in Greece against the insurers, the individual underwriters and various employees and agents for recovery of loss of profits based on the same facts relied on in the unsuccessful application for amendment.

The insurers applied for, and were granted, an order by Burton J, enforcing the settlement agreements and putting a stop to the proceedings in Greece. This order was taken on appeal to the Court of Appeal which held that the English proceedings should be stayed under Article 27 of the Judgments Regulation 44/2001.

(Article 27 of the Judgments Regulation is to the effect that where proceedings are commenced in a different jurisdiction involving the same subject matter, the proceedings commenced later in time are stayed)

On further appeal, the Supreme Court held that the proceedings in Greece and the United Kingdom did not involve the same cause of action. This finding enabled the appeal against the original order of Burton J to proceed on the merits which appeal was dismissed by Longmore LJ (Toulson and Rimer LJJ concurring).

The issue for Flaux J to decide in this matter was whether the terms of the settlements precluded claims against the agents and servants of the insurers.


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