The Court of Appeal’s recent decision in the M/T Prestige case underscores the binding nature of arbitration agreements and the jurisdictional challenges insurers face in international disputes involving sovereign states. This decision is particularly significant for the shipping industry and highlights London’s role as a hub for maritime arbitration and insurance-related legal proceedings.
The case revolves around the 2002 sinking of the M/T Prestige, which caused severe pollution along the coastlines of Spain, France, and Portugal. The vessel’s owners were reinsured by the London Steam-Ship Owners’ Mutual Insurance Association (the “Club“), with a policy that included a ‘pay to be paid’ clause and an arbitration clause requiring disputes to be referred to arbitration in London. Spain and France sought compensation through Spanish courts, resulting in a 2019 judgment against the Club for over €855 million (the “Spanish Judgment“).
The appeals to the Court of Appeal involved complex procedural history, including the question of whether the Spanish judgment should be registered in England. The Court of Appeal ultimately ruled that the Spanish judgment could not be recognised or registered in England, emphasising the importance of finality in litigation and the necessity of respecting arbitral decisions upheld by competent courts.
For a detailed analysis and full insights into the Court of Appeal’s decision, please see HFW’s full briefing here https://www.hfw.com/insights/prestige-sinks-arbitration-agreement-floats/
