Cross-Border Challenges For Middle East Reinsurance Coverage And Claims Issues – Part 2

In Part 2 of this 3-part series we look at further challenges which arise from typical reinsurance arrangements in the Middle East involving cross-border transactions, with the cedant based locally, and the reinsurer located in one of the traditional reinsurance centres of London, Munich, Zurich or Paris.

Our focus in this article is on the problems that have recently been considered by the English Courts in relation to the operation of a claims control clause in a Kuwaiti energy reinsurance risk. The manner in which the risk was placed and underwritten will be familiar to anyone involved with Middle East business, and the decision provides a stark warning as to what can go wrong with reinsurance placements of this nature.