The Federal Mogul Asbestos Personal Injury Trust v Federal-Mogul Ltd & Ors

The Federal Mogul Asbestos Personal Injury Trust v Federal-Mogul Ltd & Ors

The Trust lacks standing to seek declaratory relief regarding claims handling standards under the ALP and Reinsurance, as it is not a party to the contracts and there is no dispute between contracting parties; section III.4f gives Reinsurers full, exclusive, and absolute authority, discretion, and control over claims handling after insolvency, subject only to acting in a businesslike manner in the spirit of good faith and fair dealing, having regard to the legitimate interests of parties to the ALP and Reinsurers; the TDPs are not binding as the contractual standard for claims handling; payments by set-off against the Stock Repayment Obligation or by pre-payment constitute payment in fact...

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 Insurance Declaratory Relief / Judgment After Trial
Outcome
Declarations (i), (iii)-(vii), (x), and (xi) refused; declarations (viii) and (ix) granted subject to modification; declaration (ii) refused but tentative declaration proposed regarding Power of Attorney.
Legal Topics
Claims Handling Standards, Declaratory Relief, Standing, Payment Mechanisms Under Insurance Policy, Trust Distribution Procedures, Reinsurance Obligations
Insurance Law Contract Law Insolvency Law Claims Handling Standards Declaratory Relief Standing Payment Mechanisms Under Insurance Policy Trust Distribution Procedures +1 more

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 4 Authorities cited 14 Party arguments 2 Amounts and remedies 13
Sign in to unlock

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 Insurance Declaratory Relief / Judgment After Trial

Legal Issues

  1. 1 Does the Trust have standing to seek declaratory relief regarding claims handling under the ALP and Reinsurance?
  2. 2 What are the obligations of Curzon/Reinsurers regarding claims handling after an Insolvency Event under section III.4f of the ALP?
  3. 3 Do payments made by set-off against the Stock Repayment Obligation or by pre-payment constitute 'payment in fact' and form part of Ultimate Net Loss under the ALP?

Ratio Decidendi

The Trust lacks standing to seek declaratory relief regarding claims handling standards under the ALP and Reinsurance, as it is not a party to the contracts and there is no dispute between contracting parties; section III.4f gives Reinsurers full, exclusive, and absolute authority, discretion, and control over claims handling after insolvency, subject only to acting in a businesslike manner in the spirit of good faith and fair dealing, having regard to the legitimate interests of parties to the ALP and Reinsurers; the TDPs are not binding as the contractual standard for claims handling; payments by set-off against the Stock Repayment Obligation or by pre-payment constitute payment in fact...

Court Disposition

Declarations (i), (iii)-(vii), (x), and (xi) refused; declarations (viii) and (ix) granted subject to modification; declaration (ii) refused but tentative declaration proposed regarding Power of Attorney.

Orders

  • Declarations granted that payments by set-off against the Stock Repayment Obligation and by pre-payment constitute payment in fact and are treated as cash payments for Ultimate Net Loss under the ALP.
  • All other declaratory relief sought by the Trust is refused.