After paying out more than $21 million in settlements for its mishandling of a collective investment scheme that collapsed in 2009, financial services group ABSA filed suit in South Africa against its reinsurers to enforce reinsurance contracts that purportedly provided compensation for the settlement of lawsuits and arbitration.
The U.K.-based reinsurers claimed that the proceedings brought against them in South Africa by ABSA were in breach of the reinsurance contracts, which provided that the courts of England and Wales should have exclusive jurisdiction.
The reinsurers applied for an interim anti-suit injunction. An interim anti-suit injunction restraining ABSA from pursuing the South African proceedings was granted until the return date. On the return date, Nicholas Vineall QC, sitting as a judge at the High Court, addressed what, if any, anti-suit injunction was appropriate — mainly whether he should continue, or vary, or decline to continue, the interim injunction.
Finding no strong reasons for refusing to restrain the South African proceedings on the excess layers, the High Court judge held he would keep in place the anti-suit injunction preventing a claim from being brought in South Africa under the excess layers, reasoning that the excess layer coverage was governed by an exclusive jurisdiction clause that required disputes to be litigated in the courts of England and Wales. However, the High Court judge refused to continue the injunction preventing a South African proceeding over the primary layer of reinsurance, as that primary layer of coverage had no such exclusive jurisdiction clause.
Recognizing that the end result was not ideal because it leaves most of the parties involved in two sets of proceedings, the High Court judge reasoned that its decision “reflects the different wording of the agreements which the parties entered into,” and “[t]he result does give effect to and enforce those agreements.”
Axis Corporate Capital UK II Ltd. v. ABSA Group Ltd., No. CL-2020-000871, [2021] EWHC 861 (Comm), in the High Court of Justice, Business and Property Courts of England and Wales, Commercial Court (Apr. 13, 2021).