QBE Europe SA/NV & Anor v Generali Espana De Seguros Y Reaseguros

Factual and Procedural Background

The Claimants, referred to collectively as Company A, sought an urgent anti-suit injunction (ASI) to restrain proceedings initiated by the Defendant, Company B, against Company A's subsidiary in Spain. The Spanish proceedings asserted a direct claim against Company A's subsidiary under a Spanish statute by reference to a liability insurance policy issued to the owners of a yacht. Company A alleged these proceedings breached a London arbitration agreement contained in the insurance policy and sought to prevent Company B from commencing similar proceedings against the parent entity. Company B denied that the claim engaged the arbitration agreement and opposed the injunction.

The insurance policy was originally issued in 2016 by Company A's predecessor to the yacht owners. In 2020, Company A's parent took over the rights and obligations under the policy from the subsidiary by statutory transfer. The policy contained a multi-faceted dispute resolution clause providing for initial referral to a claims committee and, if unresolved, arbitration in London under English law.

In 2016, an incident involving the yacht allegedly caused damage to an undersea power cable in Spain, leading to pollution and a claim by the cable owner, which was indemnified by Company B under its own insurance. Company B's Spanish lawyers corresponded with Company A's lawyers asserting a direct claim and seeking payment. Despite challenges from Company A, Company B commenced proceedings in Spain in 2022 against Company A's subsidiary. The Spanish Statement of Claim asserted liability and invoked the insurance policy terms to establish coverage, relying on Spanish statutes granting a direct claim against insurers, which Company B contended was tortious and thus outside the arbitration agreement.

Legal Issues Presented

1. Whether the Spanish proceedings brought by Company B against Company A's subsidiary are in breach of the London arbitration agreement contained in the insurance policy.
2. Whether the direct claim under Article 465 of the Spanish Maritime Navigation Act (MNA 2014) is, in substance, a contractual right enforceable only in accordance with the arbitration agreement.
3. Whether there are strong reasons to refuse the grant of an anti-suit injunction restraining the Spanish proceedings.
4. The appropriate legal framework for granting an anti-suit injunction in cases involving direct claims by non-parties to an arbitration agreement ("quasi-contractual" ASIs).

Arguments of the Parties

Company A's Arguments

• The Spanish proceedings breach a binding London arbitration agreement in the insurance policy, which governs disputes arising under the policy.
• The direct claim under Article 465 of the MNA 2014 is, in substance, a contractual claim to enforce the insurer's obligations under the policy and is therefore subject to the arbitration agreement.
• The arbitration agreement extends to non-parties exercising derivative rights under the policy, and the wording of the arbitration clause does not exclude such claims.
• The public policy and principles of comity support enforcing the arbitration agreement and granting the injunction.
• There is a real risk of Company B joining the parent company to the Spanish proceedings, justifying injunction relief on a quia timet basis.

Company B's Arguments

• The claim brought in Spain is a direct statutory claim under Spanish law and does not engage the London arbitration agreement.
• The arbitration clause refers narrowly to disputes "arising between" the insurer and the assured and does not extend to claims by non-parties exercising derivative rights.
• Clause 63.6 excludes third-party rights under the Contracts (Rights of Third Parties) Act 1999, supporting that the arbitration clause does not apply to non-parties.
• The direct action statute creates an independent tortious right, distinct from contractual rights, thus falling outside the arbitration agreement.
• The arbitration agreement may be null, void, or inoperative under Spanish law and public policy as it attempts to contract out of mandatory direct action provisions.
• Considerations of comity and Spanish public policy weigh against granting the injunction.
• It would be premature to grant an injunction against the parent company as it is not yet joined to the Spanish proceedings.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by outlining the established principles governing the grant of anti-suit injunctions in wholly contractual and quasi-contractual contexts, relying principally on the Angelic Grace framework. It noted that the power to grant an ASI arises under section 37(1) of the Senior Courts Act 1981 and should be exercised when just and convenient, with a high degree of probability that the dispute falls within the arbitration agreement.

The court recognized that quasi-contractual ASIs apply where the claimant in the foreign proceedings is not a party to the arbitration agreement but asserts rights derived from a contract that contains such an agreement. The court emphasized that the arbitration agreement remains a significant factor in determining whether to grant relief, even if the claimant denies being party to the contract.

Turning to the facts, the court analyzed the Spanish statutory provisions granting a direct claim against the insurer under Article 465 of the MNA 2014. It considered expert evidence and academic commentary, concluding that the direct action granted by Article 465 is, in substance, a right to enforce the contractual obligations of indemnity under the insurance policy. The court found that although the statute modifies certain defenses available to the insurer, these modifications do not change the essential contractual nature of the right.

The court rejected Company B's argument that the arbitration agreement did not extend to non-parties exercising derivative rights, holding that the arbitration clause's language was not sufficiently clear to exclude such claims. It also dismissed reliance on clause 63.6 excluding third-party rights under the Contracts (Rights of Third Parties) Act 1999 as irrelevant to the derivative rights asserted.

The court further rejected arguments based on comity, public policy, and the purported invalidity of the arbitration agreement under Spanish law, holding that the English court, as the seat of arbitration, has jurisdiction to determine the validity and enforceability of the arbitration agreement under English law.

Finally, the court found that there was a real risk of Company B joining the parent company to the Spanish proceedings in breach of the arbitration agreement, justifying relief on a quia timet basis to prevent future proceedings.

Holding and Implications

The court granted the anti-suit injunction sought by Company A and its subsidiary restraining Company B from pursuing the Spanish proceedings against them and preventing Company B from commencing similar proceedings against the parent company.

The decision enforces the arbitration agreement contained in the insurance policy, including its application to derivative rights asserted by non-parties under Spanish direct action statutes. The ruling affirms the principle that such direct statutory claims, when they are in substance contractual, are subject to agreed arbitration provisions. The court emphasized the importance of upholding arbitration agreements to avoid vexatious foreign litigation and confirmed the English court's jurisdiction to decide on the validity and scope of such agreements under English law. No new precedent was set beyond applying established principles to the particular facts of this case.