Oaxaca Limited t/a Wahaca v QIC Europe Limited
[2024] EWHC 394 (Comm)
DC Bars Limited & Anor. v QIC Europe Ltd
9 February 2023
[2023] EWHC 245 (Comm)
High Court
A restaurant group's insurance company paid for COVID losses for the first 3 months, but refused to pay for more. The court said the fight wasn't just about how much money, but whether the insurance company *had* to pay at all. So, instead of going to arbitration, the case goes to a full trial.
Key Facts
- •DC Bars Limited and Tutton's Brasserie Limited (Claimants) sought additional indemnity under a Business Interruption (BI) insurance policy with QIC Europe Ltd (Defendant) related to COVID-19.
- •The policy included an Infectious Diseases Extension with a 3-month maximum indemnity period.
- •The Defendant initially paid £2,168,870 for the first 3 months of losses, but disputed further claims for losses beyond that period.
- •The Claimants argued for multiple 3-month indemnity periods, one for each occurrence of COVID-19 within 25 miles of their premises, totaling an additional £4,030,250.
- •The policy contained an arbitration clause for disputes regarding amounts payable where liability was otherwise admitted.
Legal Principles
Insurance contracts are generally treated as contracts to hold the insured harmless against insured loss. Insurers are in breach as soon as the insured loss occurs.
Insurance Corporation of the Channel Islands Ltd v McHugh [1997] LRLR 94
Arbitration clauses in insurance policies, requiring arbitration only for disputes 'as to the amount to be paid (liability being otherwise admitted)', exclude disputes involving points of law or construction that limit recoverable amounts, even if quantum is also in dispute.
New Hampshire Insurance Company v Strabag Bau AG [1990] International Litigation Procedure 334
Outcomes
The application for a stay of proceedings to compel arbitration was dismissed.
The dispute was not merely about the amount to be paid, but also about the Defendant's liability for losses beyond the initial 3-month indemnity period. The Defendant's dispute concerning the application of the maximum indemnity period constitutes a dispute over liability, not merely quantum.