CONFLICT_OF_LAWS

Under a policy of marine insurance governed by English law, the owners insured a vessel with French insurers.

By a deed of assignment also governed...Under a policy of marine insurance governed by English law, the owners insured a vessel with French insurers.

By a deed of assignment also governed by English law, the owners assigned the benefit of the insurance to the claimant bank.

Valid notice of assignment was given according to English but not French law.

Following a collision between the vessel and another, which caused the latter to sink, the owners of cargo aboard the sunken vessel obtained provisional attachment orders of the insurance proceeds in France.

The bank obtained a declaration in England that valid notice had been given of the assignment and that it was entitled to the benefit of the proceeds of insurance, on the grounds that the banks right to sue the insurers under the deed of assignment was a contractual issue within article12 of the Rome Convention on the Law Applicable to Contractual Obligations as scheduled to the Contracts (Applicable Law) Act 1990, and was thus governed by the law of the obligation assigned (English law), rather than a proprietary issue governed by the lex situs (French law).

The cargo owners appealed.Alexander Layton QC and Michael Davey (instructed by Howard Kennedy) for the cargo owners.

Jeffrey Gruder QC (instructed by Stephenson Harwood) for the bank.Held, varying the declaration, that the issue whether, following the assignment of the benefit of the insurance policy, the insurer had to pay the proceeds of insurance to the assignee bank rather than the assignor vessel owner, was a contractual issue; that accordingly article12 of the Rome Convention applied; and that the issue therefore fell to be determined according to the law 22 February 2001governing the obligation assigned, namely English law.