Case in Brief continued A dispute then arose between MMI and Equitas about how MMI was to present its claim under its policies of reinsurance, and whether it was permitted to “spike” its claim.
Judge-arbitrator
The dispute was heard before Flaux LJ sitting as a judge-arbitrator. This practice, which is relatively rare, is permitted under section 93 of the Act. That provision provides that a High Court judge may, if in all the circumstances he or she thinks fit, accept an appointment as a sole arbitrator or umpire. The appointment must also be approved by the Lord Chief Justice.
Notwithstanding that the appointment of judge-arbitrators remains rare, the practice has recently been encouraged by the court on the basis that it contributes to the maintenance of judges’ expertise and experience of the arbitral process. It has also been suggested that the increased availability of judge-arbitrators would encourage the use of arbitration clauses in relation to a wider range of disputes, including competition law and intellectual property.
Arbitral award
Flaux LJ resolved the dispute in MMI’s favour, finding that MMI was entitled to present its entire claim to any one year’s reinsurance contract. He acknowledged, however, that there would need to be equitable contribution and recoupment to iron out unfairness and anomalies.
Permission to appeal on point of Law
Equitas sought permission to appeal Flaux LJ’s award on a point of law under section 69 of the Act. The questions raised by Equitas were:
-Whether an EL insurer is obliged to present its claim on a pro-rata, time on risk basis (i.e. as opposed to “spiking” its claim).
-If the EL insurer is not so obliged and may “spike” its claim, how the rights of recoupment and contribution acquired by the reinsurer are to be calculated.
Under section 69(3) of the Act, permission to appeal shall only be granted where the court is satisfied that: -The determination of the question will substantially affect the rights of one or more of the parties. -The question is one which the tribunal was asked to determine. -On the basis of the findings of fact in the award: -the decision of the tribunal on the question is obviously wrong, or -the question is one of general public importance and the decision of the tribunal is at least open to serious doubt. -Despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question.
The application for permission to appeal was heard by Gloster LJ and Sir Jack Beatson in the Court of Appeal in December 2017 (judgment available here).