A Setback To Back-To-Back Coverage: The "Princess Of The Stars"

English reinsurance law has cultivated a well-established practice of construing insurance and reinsurance contracts that are underwritten as "back-to-back" contracts in exactly that way. A great deal of insurance and reinsurance contracts are written on that basis, including across the Middle East. However, the presumption of back-to-back cover may not be as secure as previously thought following the ruling of the English Court of Appeal in The Princess of the Stars (October 2012) that a "follow the settlements" clause in a reinsurance policy does not negate or impinge on the general rule that a stay of English court proceedings should be granted only in rare and compelling circumstances.