San Evans Maritime Inc & Ors v Aigaion Insurance Co SA

San Evans Maritime Inc & Ors v Aigaion Insurance Co SA

The Follow Clause in the Aigaion Policy is a simple agreement obliging Aigaion to follow any settlement made by Catlin and Brit (except ex-gratia payments). The clause is triggered by the settlement agreement, regardless of whether the lead underwriters purported to bind Aigaion. Clause 7 of the settlement agreement does not prevent the Claimants from relying on the Follow Clause against Aigaion, nor does it confer enforceable rights on Aigaion under the Contracts (Rights of Third Parties) Act 1999.

Parties
Claimant: San Evans Maritime Inc; Claimant: Livanbros Maritime SA; Claimant: Mrs Chariklia Livanou; Defendant: Aigaion Insurance Co SA
Jurisdiction
England and Wales
Judgment Date
04 February 2014
Procedural Posture
Commercial Insurance Dispute / Determination of Preliminary Issues
Outcome
Preliminary issues determined in favour of the Claimants; Aigaion is obliged to follow the settlement under the Follow Clause.
Legal Topics
Follow Clauses, Co Insurance, Settlement Agreements, Third Party Rights
Insurance Law Contract Law Maritime Law Follow Clauses Co Insurance Settlement Agreements Third Party Rights

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Parties

San Evans Maritime Inc

Claimant

Livanbros Maritime SA

Claimant

Mrs Chariklia Livanou

Claimant

Aigaion Insurance Co SA

Defendant

Procedural Posture

Commercial Insurance Dispute / Determination of Preliminary Issues

Legal Issues

  1. 1 Proper construction of the Follow Clause in the Aigaion Policy
  2. 2 Whether the Follow Clause is triggered by the settlement agreement
  3. 3 Effect of clause 7 of the settlement agreement and enforceability under the Contracts (Rights of Third Parties) Act 1999

Ratio Decidendi

The Follow Clause in the Aigaion Policy is a simple agreement obliging Aigaion to follow any settlement made by Catlin and Brit (except ex-gratia payments). The clause is triggered by the settlement agreement, regardless of whether the lead underwriters purported to bind Aigaion. Clause 7 of the settlement agreement does not prevent the Claimants from relying on the Follow Clause against Aigaion, nor does it confer enforceable rights on Aigaion under the Contracts (Rights of Third Parties) Act 1999.

Court Disposition

Preliminary issues determined in favour of the Claimants; Aigaion is obliged to follow the settlement under the Follow Clause.

Orders

  • The Follow Clause requires Aigaion to follow any settlement made by Catlin and Brit, save for ex-gratia payments.
  • The Follow Clause is triggered by the Settlement Agreement.