This week's edition of Insurance weekly highlights includes: the Commercial Court’s decision in Zephyrus Capital Aviation Partners 1D Ltd and others v Fidelis Underwriting Ltd and others, rejecting jurisdiction challenges brought by international reinsurers that had sought to rely on Russian exclusive jurisdiction clauses in their reinsurance contracts with Russian airlines; the Court of Appeal’s decision in Tyson International Company Ltd v Partner Reinsurance Europe Se, dismissing the appellant's appeal from the decision of the High Court that the document in dispute had been intended to replace the previous contract entered by the parties and that the arbitration clause which it contained was valid and binding; the judge in The London Steam-Ship Owners' Mutual Insurance Association Ltd v Trico Maritime (Pvt) Ltd and others, ruling that a Sri Lankan shipping company cannot bring a claim against a London-based insurer in its home country over liability for a sunken container ship because the insurance contract is governed by English law; the European Parliament adopting texts of the proposed Solvency II amending Directive and the proposed Insurance Recovery and Resolution Directive (IRRD); the Prudential Regulation Authority (PRA)’s consultation paper on Solvency II; the House of Lords (HoL) Financial Services Regulation Committee (FSRC)’s response to the Financial Conduct Authority (FCA)’s consultation paper; cases & decisions; key dates for your diary; and other news highlights reported over the past week.

Commercial analysis: Article 7(1) of Council Directive 86/653/EEC provides: ‘A commercial agent shall be entitled to commission on commercial transactions concluded during the period covered by the agency contract: (a) where the transaction has been concluded as a result of his action; or (b) where the transaction is concluded with a third party whom he has previously acquired as a customer for transactions of the same kind’. Advocate General (AG) Ćapeta considered that Article 7(1)(b) is a non-mandatory rule. It 'serve[s] as an aid in drafting the contract, indicating possible solutions as to how the parties may resolve certain issues' and 'offer[s] the parties a list of choices while not precluding others'. Consequently, the parties may choose whether to include, exclude or modify the right under Article 7(1)(b) of Council Directive 86/653/EEC. In due course, the Court of Justice will hand down its judgment in this case. This will have implications for the negotiation and interpretation of agency contracts. Written by Fiona Petersen, barrister at Twenty Essex.

The National Electricity System Operator (NESO) has published a letter, outlining proposed reforms to its grid connections process, following stakeholder feedback from its November 2024 consultation. These reforms aim to ensure timely connections for strategically aligned projects to achieve the government’s Clean Power 2030 objectives. NESO proposes that certain categories of projects that meet specific requirements, such as submitting planning consent applications before NESO's final proposal submission to Ofgem (expected on 20 December 2024) and securing planning consent by the end of the Gate 2 evidence submission window (expected by the end May 2025), or being awarded a government Contract for Difference or a Capacity Market contract by NESO, or obtaining Ofgem cap and floor or merchant route regulatory approvals for interconnector or offshore hybrid asset projects, will be deemed as meeting the strategic alignment element of the Gate 2 criteria. These projects must still satisfy the 'readiness' element of the Gate 2 criteria and will remain eligible for advancement requests and be subject to reassessments. NESO intends to submit its final connections methodologies proposals to Ofgem by the end of 2024, with Ofgem’s decision expected in Q1 2025.

Arbitration analysis: The 1st and 2nd defendants and the plaintiff entered into a contract for their co-investment opportunity which contained an arbitration agreement. The plaintiff later instituted proceedings in the HKSAR Court of First Instance against two individuals plus the 3rd defendant (not a party to the arbitration agreement), for fraudulent misrepresentations which induced the plaintiff to enter into the contract (but no claims were made against the 1st and 2nd defendants). The 1st and 2nd defendants later appealed a decision made by the Court of First Instance (‘CFI’), whereby the CFI set aside an arbitral award of ‘non-liability’ given in their favour on the basis that there was no dispute between the plaintiff and the defendants and therefore the arbitrator did not have jurisdiction. The Court of Appeal (‘CA’) reviewed the question on jurisdiction and upheld the decision of the CFI: where there is no dispute between the parties to an arbitration agreement, an arbitrator does not have jurisdiction as such jurisdiction will not have been invoked by a dispute falling within the agreement. It was also determined against public policy to uphold an arbitral award arising out of an abuse of process —given by an arbitrator without jurisdiction. Written by Andrew Rigden Green, partner head of International Arbitration, Greater China at Stephenson Harwood.

The European Commission has published an evaluation of Directive 2014/23/EU, Directive 2014/24/EU and Directive 2014/25/EU (EU Public Procurement Directives), concluding that they have only partially met their intended objectives. The evaluation found that the Directives did not improve legal clarity or flexibility, with new sector-specific rules adding further complexity. While transparency has improved and contract values have doubled, corruption risks remain and data gaps continue to hinder compliance checks. Competition results were mixed: the average number of bids per tender has declined, although large contracts continue to attract strong interest and SMEs account for 71% of contract awards. Direct cross-border participation within the EU remains limited and progress on green, social and innovative procurement is uneven across Member States. EU procurement rules currently apply to approximately a quarter of the EU’s €616bn annual public procurement expenditure. The evaluation represents the first step towards revising the EU Public Procurement Directives as part of the EU’s broader strategic agenda.

Insurance & Reinsurance analysis: The Court of Appeal has ruled on the effect of an exclusion in a Warranty and Indemnity insurance policy in a M&A transaction. The Court of Appeal’s decision follows the High Court’s decision in Finsbury v Axis last year as the number of W&I claims increase. The case is an important reminder of the difficulty of establishing that there has been an obvious mistake in the drafting of a contract such that the court should re-write the language the parties have used. Consistent with a number of high-profile decisions in recent years the court was not prepared to amend the precise wording that the parties had used even if the result appeared, on its face, to be inconsistent with other provisions of the contract. The decision is a timely reminder for users of W&I to be precise in determining which warranties are covered, balancing the position in a ‘Cover Spreadsheet’ against general exclusions. Written by Alexander Harding, head of Claims at HWF Partners.

Arbitration analysis: An International Centre for Settlement of Investment Disputes (ICSID) tribunal chaired by Luca Radicati di Brozolo issued its final award on liability in respect of claims (‘Claims’) brought by US trusts and corporations and individuals of US nationality (‘Claimants’), collectively the shareholders in Industria Oklahoma Nicaragua SA (‘ION’), a Nicaraguan company, against the Republic of Nicaragua (‘Nicaragua’), finding in favour of Nicaragua. The Claims (valued up to US$198m) arose in connection with the termination by Nicaragua of a concession contract with ION dated April 23, 2004 (the ‘Concession’ or ‘Contract’) for oil exploration and exploitation in a block in Nicaragua’s onshore Pacific region (the ‘Concession Area’). The Claims, which cited breaches of the 2006 Dominican Republic Central America-United States Free Trade Agreement (‘CAFTA-DR’ or ‘Treaty’) and the ICSID Convention were dismissed by the tribunal. What is significant about this case is that in addition to contesting jurisdiction ratione materiae over the Claims and denying liability, Nicaragua also brought a counterclaim against the Claimants pursuant to Article 10 of the CAFTA-DR and Articles 25 and 46 of the ICSID Convention seeking compensation for damages caused by ION’s alleged breaches of applicable environmental obligations (the ‘Counterclaim’). The tribunal did not accept jurisdiction over the Counterclaim, because Nicaragua asserted no breach by the Claimants of environmental obligations incorporated in the Treaty. Written by Noor Kadhim, consultant at Gateley Legal.

Where a financial consent order provides for a property to be transferred from joint names of the parties to party 1 but party 2 is refusing to sign the transfer, what powers does the court have to enforce the order for transfer, specifically can a judge sign the transfer in place of party 2 and under what provision should the application be made? The power for the court to order that the contract and transfer be signed by a nominated person (usually a district judge) on behalf of party 2 is contained in section 39 of the Senior

1 Sale contract—restriction on title 1.1 The Buyer covenants with the Seller not to dispose or deal in any way with the whole or any part or parts of the Property without first procuring that the person to whom the disposal is made has executed and delivered to the Seller a deed of covenant (in a form approved by the Seller in writing, such approval not to be unreasonably withheld or delayed) containing the same obligations and provisions on the part of the successors in title as those affecting the Buyer in paragraphs [insert number] of this Agreement. 1.2 The

Section 30 of the Family Law Act 1996 (FLA 1996) provides that where one spouse (or civil partner) (Person A) is entitled to occupy a dwelling-house by virtue of a beneficial estate or interest or contract and the other spouse (Person B) is not so entitled, Person B has, if in occupation, a right not to be evicted or excluded from the dwelling-house or any part of it by Person A, except with the leave of the court given by an order under FLA 1996, s 33, and, if not in occupation, a right with the leave of the court so given to enter

Date of signature v date of commencement The date on which a lease is intended to commence can be different to the date on which it is signed. Whereas a simple contract takes effect once signed by all parties, a deed will take effect on delivery. If the obligations under the deed are intended to commence or be deemed to commence on a date different to the date of delivery, then this should be made clear in the document itself in a separate commencement clause. The date of the deed is usually stated at the beginning of the document and the commencement clause within the main body of the

Where an appointment or nomination of any person to the office of liquidator relates to more than one person or has the effect that the office is to be held by more than one person, the appointment or nomination must declare whether any act required or authorised under any enactment to be done by the liquidator is to be done by all or any one or more of the persons for the time being holding the office of liquidator. Where a contract is made by two or more parties it may contain a promise or