MS Amlin Marine NV v King Trader Ltd & Ors (Rev1) [2024] EWHC 1813 (Comm) (16 July 2024)

MS Amlin Marine NV v King Trader Ltd & Ors (Rev1) [2024] EWHC 1813 (Comm) (16 July 2024)

The 'pay first' clause (Section 30.13) in the policy is clear, unambiguous, and effective to make prior discharge of liability by the insured a condition precedent to recovery under the policy, including by third parties under the 2010 Act, except for death or personal injury claims. The clause is not repugnant or inconsistent with the main purpose or other terms of the policy, and cannot be read down, excluded, or limited by implication or construction.

Citation
[2024] EWHC 1813 (Comm)
Parties
Claimant: MS Amlin Marine NV on behalf of MS Amlin Syndicate AML/2001; First Defendant: King Trader Limited; Second Defendant: Bintan Mining Corporation; Third Defendant: The Korea Shipowners' Mutual Protection & Indemnity Association
Jurisdiction
England and Wales
Judgment Date
16 July 2024
Procedural Posture
Commercial Insurance Declaratory Action / High Court Judgment
Outcome
Claimant's application for declaration granted; 'pay first' clause effective.
Legal Topics
Pay First Clauses, Third Parties (rights Against Insurers) Act 2010, Marine Insurance, Policy Construction, Repugnancy and Inconsistency, Condition Precedent, Direct Rights of Third Parties
Insurance Law Maritime Law Contract Law Pay First Clauses Third Parties (rights Against Insurers) Act 2010 Marine Insurance Policy Construction Repugnancy and Inconsistency +2 more

Case Brief

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Parties

MS Amlin Marine NV on behalf of MS Amlin Syndicate AML/2001

Claimant

King Trader Limited

First Defendant

Bintan Mining Corporation

Second Defendant

The Korea Shipowners' Mutual Protection & Indemnity Association

Third Defendant

Procedural Posture

Commercial Insurance Declaratory Action / High Court Judgment

Legal Issues

  1. 1 Whether the 'pay first' clause in the charterers' liability insurance policy prevents indemnity to third parties where the insured has not discharged the liability
  2. 2 Whether the clause is repugnant or inconsistent with the main purpose or other terms of the policy
  3. 3 Whether the clause should be read down, excluded, or limited in effect, especially in insolvency or third party claims

Ratio Decidendi

The 'pay first' clause (Section 30.13) in the policy is clear, unambiguous, and effective to make prior discharge of liability by the insured a condition precedent to recovery under the policy, including by third parties under the 2010 Act, except for death or personal injury claims. The clause is not repugnant or inconsistent with the main purpose or other terms of the policy, and cannot be read down, excluded, or limited by implication or construction.

Court Disposition

Claimant's application for declaration granted; 'pay first' clause effective.

Orders

  • Declaration that no indemnity is payable under the policy unless and until the insured has discharged the relevant liability.