The Federal Mogul Asbestos Personal Injury Trust v Federal-Mogul Ltd & Ors [2014] EWHC 2002 (Comm) (27 June 2014)

The Federal Mogul Asbestos Personal Injury Trust v Federal-Mogul Ltd & Ors [2014] EWHC 2002 (Comm) (27 June 2014)

The Trust does not have standing to seek the declarations claimed regarding claims handling and settlement obligations under the ALP and Reinsurance, as post-insolvency event authority and discretion for claims handling rests with the Reinsurers. The contractual framework and prior judicial declarations confirm that neither the Plan nor the Trust Agreement can alter the claims handling rights under English law insurance contracts without express consent. The Reinsurers are not obliged to settle claims at TDP values and retain discretion to require litigation in the US tort system.

Citation
[2014] EWHC 2002 (Comm)
Parties
Claimant: THE FEDERAL MOGUL ASBESTOS PERSONAL INJURY TRUST; First Defendant: FEDERAL-MOGUL LTD (formerly T&N plc); Second Defendant: CURZON INSURANCE LTD; Third Defendant: CENTRE REINSURANCE INTERNATIONAL COMPANY; Fourth Defendant: MUENCHENER RUECKVERSICHERUNGS-GESELLSCHAFT; Fifth Defendant: EUROPEAN INTERNATIONAL REINSURANCE COMPANY LTD
Jurisdiction
England and Wales
Judgment Date
27 June 2014
Procedural Posture
Commercial Court Claim / Final Judgment
Outcome
Claim dismissed
Legal Topics
Claims Handling Rights, Declaratory Relief, Asbestos Liability, Reinsurance, Bankruptcy Proceedings, Trust Distribution Procedures
Insurance Law Insolvency Law Trusts and Equity Tort Law Claims Handling Rights Declaratory Relief Asbestos Liability Reinsurance +2 more

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Parties

THE FEDERAL MOGUL ASBESTOS PERSONAL INJURY TRUST

Claimant

FEDERAL-MOGUL LTD (formerly T&N plc)

First Defendant

CURZON INSURANCE LTD

Second Defendant

CENTRE REINSURANCE INTERNATIONAL COMPANY

Third Defendant

MUENCHENER RUECKVERSICHERUNGS-GESELLSCHAFT

Fourth Defendant

EUROPEAN INTERNATIONAL REINSURANCE COMPANY LTD

Fifth Defendant

Procedural Posture

Commercial Court Claim / Final Judgment

Legal Issues

  1. 1 Whether the Trust has standing to seek declaratory relief regarding claims handling under the ALP and Reinsurance
  2. 2 Interpretation of claims handling provisions post-insolvency event
  3. 3 Obligations of reinsurers in settlement and handling of Asbestos Claims

Ratio Decidendi

The Trust does not have standing to seek the declarations claimed regarding claims handling and settlement obligations under the ALP and Reinsurance, as post-insolvency event authority and discretion for claims handling rests with the Reinsurers. The contractual framework and prior judicial declarations confirm that neither the Plan nor the Trust Agreement can alter the claims handling rights under English law insurance contracts without express consent. The Reinsurers are not obliged to settle claims at TDP values and retain discretion to require litigation in the US tort system.

Court Disposition

Claim dismissed

Orders

  • Declarations sought by the Trust are refused
  • No alteration to claims handling rights under ALP and Reinsurance