Catlin Syndicate Limited and XL Insurance Company SE v. Weyerhaeuser Company

At a glance

Parties

Catlin Syndicate Limited (underwriting as XL Catlin Syndicate 2003) and XL Insurance Company SE v. Weyerhaeuser Company (Washington State)

Case no.

CL-2018-000292; [2018] EWHC 3609 (Comm)

Court

High Court of Justice, Queen's Bench Division, Commercial Court (London)

Forum and rules

English court; arbitration agreement providing for arbitration in London under the Arbitration Act 1996

Treaty

Arbitration clause incorporated into an excess insurance policy (no investment treaty)

Court

Mr Justice Robin Knowles

Sector

Insurance (excess liability)

Outcome

Catlin's construction succeeded. The Court granted a final anti-suit order restraining Weyerhaeuser from pursuing proceedings under the policy in the District Court in the State of Washington.

The dispute

Catlin and Weyerhaeuser were parties to an excess insurance policy, the Layer 4 Policy. Its "Choice of Law and Jurisdiction" heading referred to an attached NMA 1998 Service of Suit Clause (USA) and also said "As per Lead Underlying Policy". Endorsement 7 of the Lead Underlying Policy provided for arbitration in London under the Arbitration Act 1996. Weyerhaeuser started proceedings under the policy in the District Court in the State of Washington. Catlin sought a final order restraining those proceedings, on the ground that the parties had agreed to arbitrate in London. Weyerhaeuser argued that the Service of Suit Clause allowed it to sue in US courts for money due under the policy, so arbitration covered only other disputes. It relied on English law and on Washington State law, including a state policy said to be hostile to arbitration.

Key holdings

1. The words "As per Lead Underlying Policy" in the Choice of Jurisdiction clause incorporate Endorsement 7. As a result, any dispute arising out of or relating to the Layer 4 Policy is to be decided by arbitration in London under the Arbitration Act 1996. ¶ 8(1)
2. Read with Endorsement 9, Catlin's submission to US courts under the Service of Suit Clause was solely for the purpose of effectuating arbitration. It concerns enforcing an arbitral award, or jurisdiction if the parties later agree to dispense with arbitration. On this reading the two provisions do not conflict. ¶¶ 8(2)–(4), 9, 16–18
3. The Court rejected Weyerhaeuser's alternative, under which claims for money due would be litigated and other disputes arbitrated. It would be potentially chaotic, would be unusual for commercial parties, and would read in limits the wording does not express. This is especially so because Layers 3 and 5 contain mandatory London arbitration agreements. Reading the word "otherwise" into the clause is not a simple thing, and the clause gives the Service of Suit Clause no primacy. ¶¶ 10–17
4. Washington State law leads to the same result as English law under the agreed principles of construction, and there is no true ambiguity. Weyerhaeuser did not argue that RCW 48.18.200 made the arbitration agreement unenforceable. Even if Washington policy is adverse to arbitration, as Weyerhaeuser's expert said, that does not change what the parties agreed. ¶¶ 22–25
5. The Court granted a final order restraining Weyerhaeuser from pursuing the Washington District Court proceedings. The order is directed at Weyerhaeuser to hold it to its agreement, not at the US court. ¶¶ 27–29

Procedural history

1. 28 November 2018Final hearing of Catlin's claim for an anti-suit order before the Commercial Court.
2. 21 December 2018Judgment: Catlin's construction succeeds and a final order is made restraining Weyerhaeuser from pursuing proceedings in the District Court in the State of Washington.

Tribunal, counsel and experts

Decided by

• Robin Knowles Judge, High Court of Justice, Commercial Court

For the claimant

Kennedys Law LLP

For the respondent

Addleshaw Goddard

Experts

Mark Parris (respondent)

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Keywords

• anti-suit injunction
• excess insurance
• service of suit clause
• NMA 1998
• incorporation by reference
• follow clause
• London arbitration
• Arbitration Act 1996
• Washington State law
• RCW 48.18.200
• New York Convention
• contractual construction
• Layer 4 Policy
• Weyerhaeuser
• XL Catlin

Summary generated with AI from the published documents — refer to the award for the authoritative text.