Court of Appeal

Published January 20, 2009

Allianz Insurance Co - Egypt v Aigaion Insurance Co SA

Before Lord Justice Laws, Lord Justice Rix and Lord Justice Moses

Judgment December 19, 2008

In the context of a reinsurance contract, where a gap opened up between what had been previously quoted and agreed and what had been defined on the slip as the determinative contract, an e-mail reply by the defendant reinsurer’s representative was to be construed as an acceptance, which gave priority to the slip, rather than a counter-offer, which would have given priority to previous stipulations.

The Court of Appeal so held in a reserved judgment in dismissing an appeal brought by the defendant reinsurer, Aigaion Insurance Co SA, against the decision of Judge Chambers, QC, sitting in the Commercial Court of the Queen’s Bench Division ([2008] EWHC 1127 (Comm)), when he held that the reinsurer was liable for the loss of the Ocean Dirk, rather than the reinsured claimant, Allianz Insurance Co - Egypt.

Mr Duncan Matthews, QC, for Aigaion; Mr Mark Howard, QC and Mr Guy Blackwood for Allianz.

LORD JUSTICE RIX said that towards the end of negotiations for a contract of marine reinsurance, conducted entirely by e-mail via a broker between offices in different countries, the reinsurer asked the reinsured’s broker to “forward the slip soonest for our agreement”.

The broker did so, but unfortunately omitted from a slip a vital clause, which had previously been stipulated by the reinsurer and agreed between the parties. The reinsurer, presumably failing to note the omission, responded with agreed rates.

The question arose, following a casualty, as to whether the reinsurer’s final message was agreeing to cover with or without the class warranty.

On April 15, 2005, the reinsurer sent its policy documents to a Cypriot broker based in Beirut. The policy differed in at least two respects from the slip.

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