Project Angel Bidco Limited v Axis Managing Agency Limited & Ors
[2024] EWCA Civ 446
Project Angel Bidco Limited (In Administration) v Axis Managing Agency Limited & Ors
31 October 2023
[2023] EWHC 2649 (Comm)
High Court
A company's insurance claim was denied because the insurance policy clearly excluded coverage for bribery and corruption issues, regardless of pre-contract discussions. The court didn't change the policy wording to help the company.
Key Facts
- •Project Angel Bidco Ltd (in administration) claimed indemnity from underwriters under a Buyer Side Warranty & Indemnity Insurance Policy.
- •The claim related to breaches of warranties in a Share Purchase Agreement (SPA) for the acquisition of Knowsley Contractors Ltd.
- •The alleged breaches involved non-compliance with Anti-Bribery and Anti-Corruption Laws (ABC Laws).
- •The policy contained an exclusion clause for 'ABC Liability'.
- •Preliminary issues concerned the construction of 'ABC Liability' and the exclusion clause's application.
- •The claimant argued for a narrow construction of 'ABC Liability', while the defendants argued for a broad construction.
- •Pre-contractual negotiations were considered for admissibility and relevance.
Legal Principles
Construction of insurance contracts follows general contract principles, considering the contract's natural and ordinary meaning, other provisions, purpose, known facts and circumstances, and commercial common sense, but disregarding subjective intentions.
FCA v. Arch Insurance (UK) Limited and others [2021] UKSC 1; Arnold v Britton [2015] UKSC 36; Rainy Sky SA v Kookmin Bank [2011] UKSC 50; Wood v Capita Insurance Services Limited [2017] UKSC 24
Exclusion clauses in insurance policies must be read in the context of the whole contract and consistently with the insurance contract's purpose.
Impact Funding Solutions Ltd v Barrington Support Services Ltd [2016] UKSC 57
A contract's literal meaning can be corrected if a mistake is clear and the intended meaning is clear; however, this requires a high threshold, typically an obvious error or nonsense.
Chartbrook Ltd v Persimmon Homes [2009] AC 1101; MonSolar IQ Ltd v Woden Park Ltd [2021] EWCA Civ 961; Trillium (Prime) Property GP Ltd v Elmfield Road Ltd [2018] EWCA Civ 1556; Britvic Plc v. Britvic Pensions Ltd [2021] ICR 1648
Evidence of pre-contractual negotiations is generally inadmissible to interpret a contract's meaning but may be admissible to establish background facts known to both parties or to support claims like rectification or estoppel.
Chartbrook Ltd v Persimmon Homes
Estoppel by convention requires a common assumption of fact or law communicated between parties, acted upon by both, or acquiesced in by one.
Revenue and Customs Comrs v Benchdollar Ltd [2010] 1 All ER 174
Outcomes
The defendants succeeded on the construction issues.
The court rejected the claimant's argument to rewrite the definition of 'ABC Liability'. The court found the policy's wording, including the exclusion clause, clear and unambiguous, covering various types of ABC liability (actual and alleged non-compliance, liability itself). The Cover Spreadsheet clarified that while some warranties were 'Covered,' losses stemming from ABC liability were excluded.
The defendants would have failed on the estoppel issue.
The defendants failed to establish a common assumption that all ABC risk was excluded; only that it 'should' be excluded, which did not create an estoppel.
Similar Cases
Technip Saudi Arabia Limited v The Mediterranean & Gulf Insurance and Reinsurance Co
[2024] EWCA Civ 481
FM Conway Limited v The Rugby Football Union & Ors.
[2023] EWCA Civ 418
Scotbeef Limited v D&S Storage Limited & Anor
[2024] EWHC 341 (TCC)
Hamilton Corporate Member Ltd & Ors v Afghan Global Insurance Limited & Ors
[2024] EWHC 1426 (Comm)