Aspen Underwriting Ltd and others v Credit Europe Bank NV [2020] UKSC 11

Citation

• Full case name: Aspen Underwriting Ltd and others v Credit Europe Bank NV
• Neutral citation: [2020] UKSC 11
• Court: Supreme Court of the United Kingdom (on appeal from [2017] EWHC 1904 (Comm) and [2018] EWCA Civ 2590)
• Judgment date: 1 April 2020
• Panel: Lady Hale, Lord Reed, Lord Kerr, Lord Hodge, Lord Lloyd-Jones, Lord Kitchin, Lord Sales
• Leading judgment: Lord Hodge

Facts

The underwriters insured the vessel Atlantik Confidence under a hull and machinery policy. The policy was governed by English law and each party agreed to submit to the exclusive jurisdiction of the courts of England and Wales.

Credit Europe Bank NV, a bank domiciled in the Netherlands, had lent money to refinance the purchase of the vessel and another ship. It took mortgages over the vessel and assignments of the policy, and was identified in the policy as mortgagee, assignee and loss payee.

The vessel sank. The insurers entered into a settlement agreement with the owners and managers and paid out, the payment being made to the insurance brokers at the Bank’s direction. The Bank was not a party to the settlement agreement.

The Admiralty Court subsequently held, after a trial in a limitation action, that the owners and managers had procured the scuttling of the vessel. The insurers then sued the owners, the managers and the Bank in the High Court, seeking to set aside the settlement agreement and to recover the sums paid. The Bank challenged the jurisdiction of the English court over the claims against it.

Issue

The appeals turned on the Brussels Regulation Recast (Regulation (EU) 1215/2012). Did the English court have jurisdiction under the exclusive jurisdiction clause in the policy? Were the insurers’ claims against the Bank “matters relating to insurance” within section 3 of Chapter II of the Regulation? And if so, did the Bank fall within the class of persons entitled to the protection that section gives?

Decision

The Supreme Court dismissed the insurers’ appeal, allowed the Bank’s appeal, and declared that the High Court did not have jurisdiction over the insurers’ claims against the Bank.

On the jurisdiction clause, Lord Hodge drew on established European authority that a jurisdiction agreement binds a party only where there is actual consensus, clearly and precisely demonstrated. A jurisdiction agreement in an insurance contract does not bind a third party beneficiary of the insurance who is domiciled in a different state and has not expressly subscribed to the clause.

On the protective regime, the court held at paragraph 60 that the Bank, as the named loss payee under the policy, was the “beneficiary” of the policy. It was therefore entitled to the protections of section 3, including the requirement that it be sued in the courts of the member state of its domicile. The insurers could not instead rely on the tort jurisdiction under article 7(2).

A note on the current position

The Brussels Regulation Recast no longer governs jurisdiction in proceedings commenced in the United Kingdom after the end of the transition period following the UK’s withdrawal from the European Union, so the specific jurisdictional route in this case is of historical application in the English courts.

The reasoning remains useful for what it says about the position of a mortgagee, assignee or loss payee under a policy: such a party takes the benefit of the insurance without automatically taking on every procedural term the original parties agreed between themselves. Anyone relying on being named in someone else’s policy should check what they are actually entitled to and where they can enforce it.

Why it matters for insurance

A great many UK commercial policies name third parties. Funders, landlords, mortgagees, finance houses and joint venture partners appear as loss payees, composite insureds or interested parties, usually because a finance or lease document requires it.

This case shows that the label matters and that the rights attached to it are not obvious. Being named as a loss payee is not the same as being a co-insured, and neither is the same as having an independent right to claim. The consequences run both ways: the named party may have better protection than expected in some respects, and less than expected in others.

For a business arranging finance or granting security, the practical steps are to make sure the insurance clause in the finance document and the endorsement on the policy actually correspond, to know whether the third party is a loss payee or a co-insured, and to know what happens to that party’s rights if the insurer avoids the policy or disputes the claim. Those points are much easier to fix at placement than in litigation.

See also

• MS Amlin v King Trader — third party rights against an insolvent insured’s insurer
• Hiscox v Outhwaite — where disputes under a policy are resolved
• Bank of Nova Scotia v Hellenic Mutual — a bank’s position under marine insurance
• Gard Marine v China National Chartering — co-insurance and rights of recovery

References

• Aspen Underwriting Ltd and others v Credit Europe Bank NV [2020] UKSC 11 (Supreme Court, 1 April 2020)
• Regulation (EU) 1215/2012 (Brussels Regulation Recast), Chapter II section 3 and article 14
• Aspen Underwriting Ltd v Credit Europe Bank NV [2018] EWCA Civ 2590

Frequently asked questions

What did the Supreme Court decide in Aspen v Credit Europe?

That the bank named as mortgagee, assignee and loss payee was the beneficiary of the insurance contract, was entitled to the protection of the insurance section of the Brussels Regulation Recast, and could only be sued in the courts of its own domicile. The English court therefore had no jurisdiction over the insurers' claims against it.

Was the bank bound by the policy's English jurisdiction clause?

No. A jurisdiction agreement binds a party only where there is actual consensus, clearly and precisely demonstrated. A clause in an insurance contract does not bind a third party beneficiary domiciled elsewhere who has not expressly subscribed to it.

Why does this matter if the Regulation no longer applies in the UK?

Because the reasoning about the status of a loss payee still matters commercially. Being named as a loss payee is not the same as being a co-insured, and the rights that attach to each are different. Anyone relying on being named in someone else's policy should check exactly what they are entitled to.

This page is insurance information for UK businesses, not legal advice. It summarises a reported judgment and explains why insurance buyers and brokers refer to it; it is not a substitute for reading the judgment or taking advice on your own facts. Case summaries are necessarily short and omit detail. Position stated as at August 2026.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.