UK Law and Practice Contributed by: Daniel Robin and Chloe Franklin, SDV Fenchurch
3. Arbitration in Insurance Disputes 3.1 Recognition of Arbitration Clauses Arbitration clauses in insurance and reinsurance con- tracts are recognised and generally upheld by the English courts. Arbitration is particularly common in reinsurance, Bermuda Form policies, marine, energy, political risk and complex international insurance pro- grammes. Where a policy contains an arbitration clause, the English courts will ordinarily expect the parties to fol- low that mechanism. It is not uncommon for the arbi- tration clause to only apply in specific circumstances, such as where cover has been accepted but there is a dispute regarding the amount of the indemnity. 3.2 Enforcement of Arbitral Awards Arbitral awards are generally enforceable in England and Wales. Foreign awards are commonly enforced under the New York Convention framework, subject to limited grounds for resisting enforcement. 3.3 Practical Use of Arbitration in Insurance Matters Arbitration is most commonly used in sophisticated commercial insurance and reinsurance disputes, rath- er than ordinary consumer or small business coverage disputes. It is particularly attractive where confidenti- ality, specialist decision-makers, procedural flexibility and international enforceability are important. The principal advantages are privacy, specialist tribu- nal selection and flexibility. The main disadvantages are cost, limited appeal rights, and the fact that arbitral awards do not usually create public precedent. This can be significant in insurance disputes where market participants may benefit from authoritative guidance on recurring policy wordings. 4. Coverage Disputes 4.1 Evolving Trends in Coverage Disputes Coverage disputes in England and Wales are increas- ingly being driven by losses that do not fit neatly within traditional policy structures. Whilst disputes concerning notification, exclusions and policy inter-
English jurisdiction clauses are common in London market policies, reinsurance and complex interna- tional programmes. The main practical issue is inconsistency between documents or layers. Where one document refers to court jurisdiction and another refers to arbitration, forum disputes can become a significant preliminary battleground before the parties reach the underlying coverage issue. 2.3 Cross-Border Disputes and Conflicts Issues Cross-border disputes commonly involve issues of governing law, jurisdiction, service, parallel proceed- ings, sanctions, evidence located abroad and enforce- ment. These issues arise frequently in reinsurance, aviation, marine, energy, cyber, political risk and mul- tinational liability programmes. Practical difficulties arise because the insured risk, insured entity, brokers, insurers, reinsurers, witnesses and documents may be located in different jurisdic- tions. The position is especially complex where local policies sit beneath a global master policy. 2.4 Anti-Suit Injunctions English courts are prepared to grant anti-suit relief to restrain proceedings brought in breach of exclusive jurisdiction or arbitration agreements. The remedy is discretionary, but the courts generally place signifi- cant weight on holding parties to their agreed dispute resolution mechanism. This can be important in insurance and reinsurance where one party seeks to litigate in a forum perceived to be more favourable, despite a clause requiring Eng- lish court proceedings or arbitration. 2.5 AI-Related Dispute Resolution and Jurisdiction AI-related insurance disputes remain in their early stages in England and Wales. The likely jurisdictional difficulty is that AI systems may be developed, trained, hosted and deployed across several jurisdictions, while the alleged harm may arise elsewhere.
251 I NSURANCE L I T IGATI O N 2026
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