Reinsurance Focus

Howden North America, Inc., a subsidiary of the Howden Group, Ltd. (“HNA”), manufactures equipment for the petrochemical, steel, mining, and cement production industries. HNA faces liability for asbestos exposure which allegedly caused personal injuries, from the 1960s through the 1990s. HNA looked to its insurers, which resulted in dispute with certain of its excess liability carriers. In 2009, HNA brought suit in Pennsylvania federal district court, seeking declaration as to the construction of the insurance policies at issue. In 2011, HNA joined a separate coverage action also pending in Pennsylvania and implicating some of the same policies and coverage layers, brought by a different primary policy holder. Meanwhile, in 2010, one of the excess carriers brought suit in the London High Court of Justice, seeking declarations involving some of the same policies at issue in the two Pennsylvania actions. In June 2012, the Pennsylvania court held, among other things, that English law does not apply, and denied motions to dismiss by the foreign defendants under the premise of forum non conveniens.

The British court has now held that English law governs with respect to one subset of the policies at issue, and that it is the appropriate court to hear those claims. It noted that because the British case is further along in terms of discovery, that it could be tried sooner and more efficiently. The British court also considered the problem of inconsistent judgments in the parallel proceedings, but held that “this is a position which the court in each country must accept.” As to the other subset of policies, the British Court declined to exercise jurisdiction, based on a lack of justiciability. Ace European, Ltd. v. Howden Group. Ltd., [2012] EWHC 2427 (High Court of Justice, Queen’s Bench Division, Commercial Court Sept. 17, 2012).

This post written by John Pitblado.

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