Allianz Marine Aviation (France) v GE Frankona Reinsurance Ltd. London & Anor

Allianz Marine Aviation (France) v GE Frankona Reinsurance Ltd. London & Anor

The proper construction of the reinsurance contract, in the context of the facility and prior declarations, is that the excess is to be deducted from the original settlement figure, not from the reinsured’s share. The parties’ consistent prior practice and the standard terms of the facility support this interpretation. There was no feature of the 'Treasure Bay' declaration or its circumstances that required a different construction.

Parties
Claimant: Allianz Marine Aviation (France); 1st Defendant: G E Frankona Reinsurance Limited London; 2nd Defendant: Alwen Hough Johnson Limited
Jurisdiction
England and Wales
Judgment Date
04 February 2005
Procedural Posture
Commercial Reinsurance Dispute / Trial Judgment
Outcome
Judgment for the Claimants
Legal Topics
Reinsurance Contracts, Interpretation of Excess Clauses, Follow the Settlements Clauses, Rectification, Estoppel by Convention
Insurance Law Contract Law Reinsurance Contracts Interpretation of Excess Clauses Follow the Settlements Clauses Rectification Estoppel by Convention

Case Brief

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Parties

Allianz Marine Aviation (France)

Claimant

G E Frankona Reinsurance Limited London

1st Defendant

Alwen Hough Johnson Limited

2nd Defendant

Procedural Posture

Commercial Reinsurance Dispute / Trial Judgment

Legal Issues

  1. 1 Proper method of applying the excess in a hull and machinery excess of loss reinsurance contract
  2. 2 Whether the excess applies to the original settlement figure or to the reinsured's share
  3. 3 Interpretation of 'claims' in the follow the settlements clause

Ratio Decidendi

The proper construction of the reinsurance contract, in the context of the facility and prior declarations, is that the excess is to be deducted from the original settlement figure, not from the reinsured’s share. The parties’ consistent prior practice and the standard terms of the facility support this interpretation. There was no feature of the 'Treasure Bay' declaration or its circumstances that required a different construction.

Court Disposition

Judgment for the Claimants

Orders

  • Excess to be deducted from the original settlement figure before applying the reinsured’s percentage share
  • Frankona to indemnify Allianz accordingly