Construing non-assignment—could a party be responsible for assignment arising as a matter of law? (Dassault Aviation v Mitsui Sumitomo Insurance)

Article summary

Insurance & Reinsurance analysis: The Court of Appeal applied ordinary black letter contractual interpretation in construing a non-assignment clause in a contract for sale. As the Court of Appeal stated: ‘At its core, this appeal raises a single issue of contractual interpretation’. The appeal considered whether a party who entered into an insurance contract to protect against the late delivery of two planes which resulted by reason of Japanese law in the automatic assignment of its interest in the planes could be considered to have violated a non-assignment clause in the sale contract. The Court of Appeal applying the usual rules of construction found that the non-assignment clause was only engaged where a party was responsible for the assignment and not where assignment occurred independently of the party, on the facts of this case by the operation of Japanese Law. Written by Lauren Godfrey, barrister at Gatehouse Chambers.