The business of insurance, as carried on by English insurers, is not confined exclusively to England and Wales, but extends to countries which are outside the jurisdiction of the English Courts. On the other hand, insurers who are not English are entitled to carry on insurance business in England, provided that they comply with the statutory requirements of the Insurance Companies Act 1982. Moreover there is a considerable amount of reinsurance business carried on between English and foreign insurers.
It, therefore, becomes necessary to consider how far the English Courts are empowered to decide questions arising under contracts of insurance where the subject – matter of insurance is situated outside the jurisdiction, or where one of the contracting parties is not resident within the jurisdiction, or where one of the contracting parties is not resident within the jurisdiction. Further, it is necessary to ascertain whether such questions, where they fall within the jurisdiction of the English Courts, are to be decided by reference to the law of England, or to some other system of law, and in the latter case by what method the law applicable is to be discovered.
THE JURISDICTION OF THE ENGLISH COURTS
The High Court of Justice clearly has jurisdiction where the contract of insurance is made in England, and is to be performed in England, even though the insurers are not domiciled within the jurisdiction, provided that the requisite steps are taken to bring them before the Court. Except in the case of Scottish or Irish insurers, there is no difficulty in doing so, since all foreign insurers carrying on business in the United Kingdom must have a duly registered address for service situate in each part of the United Kingdom in which they carry on business.
Insurers who are domiciled in Scotland or Ireland, whether they are incorporated or not, must, however, be sued in Scotland or Ireland as the case may be, and cannot be sued in England unless, as is usually the case, they have expressly bound themselves to accept service of any proceedings against them through an agent in England, or unless they are similarly bound by their conduct.
Where, on the other hand, the insurers are domiciled in England, an action will lie against them whether the contract of insurance was made in England or abroad,and the place where the contract is to be performed is for the purpose of jurisdiction immaterial. The English Courts have jurisdiction immaterial. The English Courts have jurisdiction in such a case, notwithstanding that the subject – matter of insurance may be foreign immovable property, in as much as no question of title is involved, and the contract is one of purely personal character.
The Jurisdiction of the English Courts may, however, be ousted where it is the manifest intention of the parties that the English Courts shall not have jurisdiction, or where the contract of insurance, though made in England is wholly to be performed abroad, and both the assured and the insurers are foreigners.
B. THE ‘PROPER LAW’ OF THE CONTRACT
The proper law of the contract, i.e. the system of law by reference to which the contract was made or that with which the transaction has its closest and most real connection, is to be determined by finding the intention of the parties.
The English Court is not, however, deprived of its jurisdiction by reason of its appearing that the parties intended their contract to be governed by the law of a foreign court would be deprived of jurisdiction in the case of the policy being governed by English Law. In such a case the English Court must endeavor to ascertain the foreign law applicable, and apply it to the best of its ability.
The proper law must be determined as at the date of the making of the contract, though the Court will, of course, give effect to changes in that proper law which arise after the making of the contract.
Where there is an express provision in the policy
If the policy expressly provides that it is to be governed either wholly or partially by the law of a particular country, the intention of the parties is clear, and the law of that country must be applied accordingly. The intention is equally clear where the policy provides that the insurers agree to be bound in all things by the jurisdiction and decision of the courts of a particular country.
Where there is no provision in the contract
Where there is no provision in the contract relating to the law to be applied, the intention of the parties must be ascertained by reference to the language of the policy and the surrounding circumstances.
In order to ascertain the intention of the parties the Courts are guided by various ‘presumptions’. These relate to :
The place where the contract is made.
The place where the payment is to be made.
The form in which the policy is framed.
The position where the terms of the policy are valid in one country, but not in another.
The place where the contract is made
The law applicable is, prima facie, presumed to be that of the place where the contract is made.This presumption is not, however, conclusive, and may be rebutted by evidence of a contrary intention. This presumption is not, however, conclusive, and may be rebutted by evidence of a contrary intention.