Bellini (N/E) Ltd trading as Bellini v Brit UW Limited
[2023] EWHC 1545 (Comm)
Bellini (N/E) Ltd v Brit UW Limited
30 April 2024
[2024] EWCA Civ 435
Court of Appeal
A restaurant claimed insurance for COVID-19 losses. The insurance policy only covered losses if there was physical damage. There was no damage, so the claim failed. The court said the insurance contract was clear, and they couldn't change what it said, even though it seemed unfair in the circumstances.
Key Facts
- •Bellini (N/E) Ltd claimed business interruption cover from Brit UW Limited due to losses from the COVID-19 pandemic.
- •The policy's clause 8.2.6, titled "Murder, suicide or disease", was the subject of the dispute.
- •Clause 8.2.6 provided cover for business interruption caused by damage (defined as physical loss, damage, or destruction) arising from specified perils, including infectious disease.
- •There was no physical damage to Bellini's premises.
- •The High Court found that clause 8.2.6 provided no cover in the absence of physical damage.
- •Bellini appealed this decision.
Legal Principles
Contractual interpretation requires identifying the parties' intentions objectively, considering the language used, other provisions, overall purpose, facts and circumstances at the time of contract, and commercial common sense.
Rainy Sky SA v. Kookmin Bank [2011] UKSC 50; Arnold v. Britton [2015] UKSC 36; Wood v. Capita Insurance Services Limited [2017] UKSC 24
Correction of mistakes by construction is permissible only if there's a clear mistake on the face of the instrument and it's clear what correction should be made. It's not a separate branch of law but an aspect of interpretation.
East v. Pantiles (Plant Hire) Ltd (1982) 2 EGLR 111; Chartbrook Limited v. Persimmon Homes Limited [2009] 1 AC 1101
Insurance policies, like other contracts, are interpreted objectively, considering the reasonable person's understanding of the language used, given the available background knowledge.
Financial Conduct Authority v. Arch Insurance (UK) Ltd [2021] UKSC 1
Outcomes
The appeal was dismissed.
The Court of Appeal held that the clause 8.2.6 unambiguously required physical damage for cover. The insured's arguments for re-writing the clause to eliminate the damage requirement failed to meet the threshold for correcting mistakes by construction. The policy, read as a whole, showed a clear intent to limit business interruption cover to instances involving physical damage. The fact that the clause provided limited additional cover did not render it absurd or warrant reinterpretation.