HIH Casualty & General Insurance Limited (in liquidation) v R J Wallace sued on his own behalf and on behalf of all other members of Syndicate No 683 at Lloyd's of London for the 1993 underwriting account & Ors [2006] NSWSC 1150

HIH Casualty & General Insurance Limited (in liquidation) v R J Wallace sued on his own behalf and on behalf of all other members of Syndicate No 683 at Lloyd's of London for the 1993 underwriting account & Ors [2006] NSWSC 1150

Section 19 of the Insurance Act 1902 (NSW) applies to reinsurance contracts and renders arbitration clauses non-binding and inoperative where the insured (here the reinsured, HIH) elects litigation; accordingly, the stay of proceedings sought under section 7 of the International Arbitration Act 1974 (Cth) is not available. Moreover, HIH has an option under the policy wording to litigate in Australian courts, claims for payment of confirmed balances are excluded from arbitration, and Syndicate 683 failed to prove existence of signed agreements for certain years necessary for a stay; thus, the notice of motion for stay is dismissed.

Jurisdiction
Australia
Judgment Date
03 November 2006
Procedural Posture
Commercial List Statement – Equity Division / Notice of Motion Seeking Stay of Proceedings
Outcome
Notice of motion seeking stay of proceedings dismissed
Legal Topics
['arbitration Clauses in Reinsurance Contracts' 'service of Suit Article' 'stay of Proceedings' 'section 19 Insurance Act 1902 (nsw)' 'international Arbitration Act 1974 (cth)' 'section 109 Constitution (cth)' 'proper Construction of Reinsurance Treaties']
['insurance Law' 'arbitration' 'contract Law' 'reinsurance'] ['arbitration Clauses in Reinsurance Contracts' 'service of Suit Article' 'stay of Proceedings' 'section 19 Insurance Act 1902 (nsw)' 'international Arbitration Act 1974 (cth)' 'section 109 Constitution (cth)' 'proper Construction of Reinsurance Treaties']

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 1 Authorities cited 2 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Procedural Posture

Commercial List Statement – Equity Division / Notice of Motion Seeking Stay of Proceedings

Legal Issues

  1. 1 ['Whether section 19 of the Insurance Act 1902 (NSW) applies to reinsurance contracts' 'Whether arbitration clause not binding on HIH by reason of s 19 Insurance Act' 'Whether section 19 inconsistent with s 7 International Arbitration Act and therefore inoperative by force of s 109 Constitution' 'Whether effect of policy wording gives HIH option to litigate rather than arbitrate' "Whether action is for payment of 'a confirmed balance', expressly excluded from arbitration clause" "Whether arbitration agreement is 'an agreement in writing' as required by International Arbitration Act"]

Ratio Decidendi

Section 19 of the Insurance Act 1902 (NSW) applies to reinsurance contracts and renders arbitration clauses non-binding and inoperative where the insured (here the reinsured, HIH) elects litigation; accordingly, the stay of proceedings sought under section 7 of the International Arbitration Act 1974 (Cth) is not available. Moreover, HIH has an option under the policy wording to litigate in Australian courts, claims for payment of confirmed balances are excluded from arbitration, and Syndicate 683 failed to prove existence of signed agreements for certain years necessary for a stay; thus, the notice of motion for stay is dismissed.

Court Disposition

Notice of motion seeking stay of proceedings dismissed

Orders

  • ['Proceedings not stayed; HIH entitled to proceed in Supreme Court of New South Wales.']