Aviation Reinsurance: Jurisdiction And Binding Settlements

In a recent case the Court of Appeal considered the requirements for a settlement to be binding. The case demonstrates some of the real practical difficulties that can be encountered by London market reinsurers in cross-jurisdictional aviation insurance claims where the original policy and reinsurance contract are both subject to foreign law and jurisdiction. Reinsurers often face difficult decisions when deciding whether to recognise the jurisdiction of the foreign court, and the case is a reminder of the subsequent problems reinsurers can face in contesting a default foreign court judgment where they have chosen not to make an appearance. The decision is also a reminder of the importance of keeping very clear records of settlement discussions if they are to be relied upon in the defence of a subsequent claim.