Case Details

MJ Harrington v Axa Oyak Sigorta

Lloyd's Rep. IR Plus 29

Andrew Burns appeared as junior counsel in this reinsurance claim concerned an underlying Bankers Blanket Bond policy issued to a Turkish bank.  The policy was a claims-made policy.  The reinsurance policy was subject to a condition precedent to liability that employees of the bank took two weeks' continuous holiday as a security measure.   The question at the summary judgment application was whether the reinsurers were bound to succeed or whether there were realistic defences to this and the breach of warranty claim based on wavier and estoppel.  It was also argued that on a claims-made policy a condition precedent requiring compliance did not apply to losses occurring prior to inception of policy.  The judge decided that it was arguable that the condition precedent to liability could be confined only to losses that were both incurred and reported after inception.  The judge examined whether reinsurers were precluded from relying on warranty and condition precedent defences by agreeing to extend time for compliance with a subjectivity imposed by reinsurers, by accepting what was alleged to be an ambiguous reply from the Bank, by failing to deny liability at an early stage and by subsequently extending cover.  He held that it was arguable and directed that the issues go to trial.