Onshore Energy Conference — Dubai Onshore Energy Conference — Dubai 01 | Page 25

ENERGY MATTERS Dealing with a market of reinsurers Where arrangements involve multiple reinsurers, the question of which reinsurer has authority to act on behalf of the others is often dealt with by way of a “follow the leader” clause. Under a this clause, the reinsurers delegate the authority to settle a claim to the “leading” reinsurer, often with identified claims agreement parties. This provides the cedant with the comfort that the leader’s and claims agreement parties’ decision to settle the claim will bind the other, following, reinsurers. If the following reinsurers disagre, that is an issue for the reinsurers to sort out amongst themselves. However, issues may arise in MENA region as to whether these clauses (in their current market form) are effective outside the common law jurisdictions of the UK and the DIFC. Handling large, complex claims Usually in the event of a very large claim, additional complexities arise if there is a dispute between the reinsurers and local cedant. In such circumstances, complex tactical considerations may arise over procedural matters. Where a multi-national dispute of this kind has been pursued to judgment, the enforceability in other jurisdictions of judgments or arbitral awards is something parties will need to consider carefully when deciding on where they agree to include in their contracts. It is important to be aware of differences between local law and the law of the reinsurer’s jurisdiction, for example there might be significant differences in the law relating to warranties, exclusion clauses or subrogation. Finally, there may also be political or local complications, depending on the identity of the insured and the cedant's relationship to them. The watchwords when dealing with all of these issues at each stage of the process are “contract certainty” and proper assessment (and minimisation) of legal risks. LEGAL ADVICE FOR THE MOST SIGNIFICANT EVENTS IMPACTING INSURANCE AND REINSURANCE Holman Fenwick Willan has one of the largest legal networks in the Middle East and serves the local and international needs of our worldwide client base. HFW’s dedicated team of insurance lawyers in Dubai, Riyadh, Beirut, Abu Dhabi and Kuwait covers the UAE, GCC and wider MENA region. Through our expanding team, we now have ten dedicated insurance/reinsurance lawyers covering the region, including several Arabic lawyers who are locally qualified within the Middle East, and numerous specialist insurance and reinsurance practitioners across our international network, giving us a truly global presence. Lawyers for international commerce For more information about how we can help your business, please contact: Sam Wakerley Partner, Dubai T: [phone] E: [email protected] hfw.com 25