England. The recent case of The London Steam-Ship Owners’ Mutual Insurance Association Ltd v. The Kingdom of Spain and the French State ( EWHC 3188 (Comm)) illustrates the commitment of the English courts to uphold contractual agreements to arbitrate and provides helpful guidance on the arbitrability of claims that are based on, or related to, a criminal statute. It also shows that the exception to state immunity under the English State Immunity Act 1978 (“SIA”) for agreements in writing to submit a dispute to arbitration will be applied broadly.
The Claimant was the insurer of the owners of the oil tanker M/T “Prestige”, which broke in two off the coast of Spain in 2002, causing severe pollution on the Spanish and French coastlines. Following Spanish criminal proceedings, France and Spain brought civil proceedings in Spain against the owners and the Claimant under the Spanish Penal Code, which allows an injured party a direct right of action against an insurer in certain circumstances. These claims were valued at EUR 4.3 billion. France also brought proceedings against the Claimant in France for EUR 67.5 million, which were stayed pending the outcome of the Spanish proceedings. Both the Spanish and French court proceedings contained additional claims under the International Convention on Civil Liability for Oil Pollution Damage (“CLC”); the Claimant did not challenge its liability under the CLC.