Category: Insurance case law · Reviewed by Chrissie Anderson, Client Executive · Last reviewed June 2026
A Supreme Court decision on jurisdiction under the recast Brussels Regulation in respect of disputes between insurers and the assignees or loss payees of marine policies, holding that a bank as loss payee under a hull policy was entitled to insist on being sued in its domicile.
The dispute arose from the loss of the MV Atlantik Confidence, which sank in the Gulf of Aden in 2013. The vessel was insured under a hull and machinery policy placed in the London market with Aspen Underwriting Ltd and other underwriters. The owners — Kairos Shipping Ltd — claimed under the policy. Credit Europe Bank NV (“the Bank”), a Dutch-domiciled bank, was named as loss payee under the policy, holding a mortgage interest in the vessel.
In separate Admiralty proceedings, the English Commercial Court ultimately concluded that the vessel had been deliberately scuttled by the owners ([2016] EWHC 2412 (Admlty) — Kairos Shipping v Enka & Co LLC), with the result that the underwriters were not liable on the policy. By that point, however, the underwriters had paid out a settlement sum to the Bank as loss payee, against an undertaking by the Bank to refund the payment if the loss was found to have been caused by the owners’ wilful misconduct.
The underwriters then commenced English proceedings against the Bank seeking, among other things, recovery of the settlement payment on grounds of misrepresentation, mistake or unjust enrichment, together with declaratory relief that they had no further liability. The Bank applied to set aside service, contending that under the recast Brussels Regulation (Regulation (EU) 1215/2012) it was entitled to be sued only in the courts of its Dutch domicile, by virtue of the protective rules in Section 3 of Chapter II governing “matters relating to insurance”.
The case raised the cross-cutting question of the relationship between the general jurisdiction rules and the protective insurance regime, in the context of a sophisticated commercial bank acting as loss payee in a marine market placement.
The principal issues for the Supreme Court were:
Whether the underwriters’ claims against the Bank were “matters relating to insurance” within the meaning of Section 3 of Chapter II of the recast Brussels Regulation, such that the protective jurisdictional regime applied.
If so, whether the Bank, as loss payee and not the policyholder or named insured, was nevertheless entitled to invoke the protection of Article 14, which (subject to limited exceptions) requires an insurer to sue the policyholder, insured or beneficiary only in the courts of the defendant’s domicile.
Whether any jurisdiction agreement, or any submission to the English court, displaced the protective rules in the particular circumstances of the case.
Whether the Bank, as a sophisticated commercial entity, fell outside the scope of the protective rules — which had been designed primarily for “weaker party” consumers, small businesses and policyholders.
The Supreme Court unanimously held in favour of the Bank. Lord Hodge delivered the leading judgment. The Court held that the underwriters’ claims against the Bank were “matters relating to insurance” because they arose out of, and depended on, the insurance contract and the settlement made under it. The protective jurisdictional regime in Section 3 of Chapter II accordingly applied.
The Court further held that the Bank, as loss payee and beneficiary of the insurance, fell within the category of persons protected by Article 14. The fact that the Bank was a sophisticated commercial entity did not, on the proper construction of the Regulation, exclude it from the protective regime. The Court of Justice of the European Union had previously held, in the context of insurance, that the protective rules apply by reference to the structural relationship between the parties (insurer and assured/beneficiary) rather than by reference to the actual commercial sophistication of the particular party.
The result was that, on the underwriters’ own claims, the Bank was entitled to be sued only in the courts of the Netherlands, its place of domicile. The English court accordingly had no jurisdiction over those claims, and service on the Bank fell to be set aside.
Where an insurer brings a claim against a person who falls within the structural category of “policyholder, insured or beneficiary” under Section 3 of Chapter II of the recast Brussels Regulation, and the claim relates to an insurance contract, the insurer must sue in the courts of the defendant’s domicile, save where one of the limited exceptions in the Regulation applies. The protective regime is not displaced by the commercial sophistication of the particular defendant; it operates by reference to the categories of person identified in the Regulation. A bank named as loss payee under a marine hull policy is a “beneficiary” of the insurance and is therefore within the protective regime.
Aspen v Credit Europe was an important decision for the London market while the United Kingdom remained subject to the recast Brussels Regulation. Although the UK has since left the EU and the Regulation no longer applies to proceedings commenced in the UK after the end of the implementation period, the case retains importance:
Pre-Brexit proceedings. For litigation in train or commenced before the relevant cut-off date, the decision continues to govern jurisdictional questions in EU member-state courts and in some transitional UK contexts.
Treatment of loss payees. The case is a strong authority on the proper classification of a loss payee as a “beneficiary” of insurance, which has implications for jurisdictional clauses and for the drafting of policies and finance documents.
Drafting of jurisdiction clauses. Underwriters writing marine and other policies with foreign-domiciled lenders, mortgagees or beneficiaries should pay particular attention to the drafting of jurisdiction and choice-of-law clauses to ensure they operate effectively under the legal regime in force.
Hague 2005 and 2019 instruments. Post-Brexit, jurisdictional disputes of this kind now turn on the 2005 Hague Convention on Choice of Court Agreements, the (eventually applicable) 2019 Hague Judgments Convention, and the common law — and the Aspen reasoning informs how UK courts characterise insurance-related disputes for those instruments.
Marine market practice. The case is part of the Atlantik Confidence line of authority concerning fraudulent or scuttled-vessel claims, sitting alongside The Brillante Virtuoso and others.
By Matt Bartlett, Director, on 2026-06-06. Next review: 2026-12-06.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-06. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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