Italian torpedo sinks Danish case
We recently saw a “Dutch torpedo” sink a Danish case. In this article we are looking at a similar “Italian torpedo”, which was even an own goal. An agency agreement concerning sales of insurance policies contained two mutually exclusive jurisdiction clauses. The court concluded that the Italian courts had jurisdiction and dismissed the case.
An insurance company that had gone bankrupt claimed reimbursement of commisison from a coverholder in Italy. The question arose where the case ought to be heard. The question was heard prior to the main case by the Maritime and Commercial High Court.
The insurance company had sued before the Danish courts and referred to an agreement in the contract between itself and the coverholder that disputes should be heard in Denmark. The Italian agent pointed out that there were actually two jurisdiction agreements in the contract, one referring to Denmark and one referring to Italy. The insurance company had drafted the contract by using standard contracts. Accordingly, the lack of clarity should be to their detriment. As the coverholder was domiciled in Italy the insurance company would have to sue them there.
The case was to be heard in Italy
The court analyzed the contract and concluded that the parties had in fact made two mutually exclusive jurisdiction agreements. This did prejudice the insurance company which had drafted the contract. The court concluded that due to a lack of a clear jurisdiction agreement the case belonged in Italy and rejected to take jurisdiction.
IUNO’s opinion
The case is a classic example that if you draft an unclear contract then sometimes you end up not having a contract at all. It also displays the regrettable fact that if there is no agreement where to resolve a disagreement, this can take on a life of its own without solving the parties’ problem. IUNO recommends using standard contracts and “boiler plate” clauses with care without having the final product carefully checked.
[Maritime and Commercial High Court judgmnet of 6 JUly 2022 in case no. BS-4844/2022-SHR]
An insurance company that had gone bankrupt claimed reimbursement of commisison from a coverholder in Italy. The question arose where the case ought to be heard. The question was heard prior to the main case by the Maritime and Commercial High Court.
The insurance company had sued before the Danish courts and referred to an agreement in the contract between itself and the coverholder that disputes should be heard in Denmark. The Italian agent pointed out that there were actually two jurisdiction agreements in the contract, one referring to Denmark and one referring to Italy. The insurance company had drafted the contract by using standard contracts. Accordingly, the lack of clarity should be to their detriment. As the coverholder was domiciled in Italy the insurance company would have to sue them there.
The case was to be heard in Italy
The court analyzed the contract and concluded that the parties had in fact made two mutually exclusive jurisdiction agreements. This did prejudice the insurance company which had drafted the contract. The court concluded that due to a lack of a clear jurisdiction agreement the case belonged in Italy and rejected to take jurisdiction.
IUNO’s opinion
The case is a classic example that if you draft an unclear contract then sometimes you end up not having a contract at all. It also displays the regrettable fact that if there is no agreement where to resolve a disagreement, this can take on a life of its own without solving the parties’ problem. IUNO recommends using standard contracts and “boiler plate” clauses with care without having the final product carefully checked.
[Maritime and Commercial High Court judgmnet of 6 JUly 2022 in case no. BS-4844/2022-SHR]
