Jurisdiction

• Author: International Law Group

Universal General Insurance Company (UGIC), a Canadian insurance company with its registered office in Vancouver, is in liquidation. It brought a civil action in the French courts against Group Josi Reinsurance Company, S.A. (GJR), a Belgian reinsurance company with its registered office in Brussels, over an amount of money claimed by UGIC from GJR as a party to a reinsurance contract.

UGIC had instructed its broker, Euromepa, a French company, to obtain a reinsurance contract to take effect from April 1990 onward and dealing with a portfolio of comprehensive home-occupiers' insurance policies centered in Canada. Euromepa offered GJR a shared-in reinsurance contract, representing that the "main reinsurers are Union Ruck with 24 percent and Agrippina Ruck with 20 percent." In a fax dated April 6, 1990, GJR agreed to buy a 7.5 percent share in that contract.

It turned out that in March 1990, Union Ruck had already informed Euromepa that it intended to terminate its share after May 31, 1990. A few days later, Agrippina Ruck had told Euromepa that it would cut back its share to 10 percent, effective June 1 of that year. Both companies explained that their parent companies based in the United States had imposed certain changes in economic policy upon them, thus requiring their cutback.

In February 1991, Euromepa sent GJR a bill for Can. $ 54,679 for its share in the reinsurance transaction. The following month, GJR declined to pay, contending that false information had induced it to enter into the reinsurance contract. In July 1994, UGIC sued GJR in the Commercial Court of Nanterre, France.

GJR maintained that the Nanterre court lacked jurisdiction over the case since only the Tribunal de Commerce, Brussels, the situs of its registered office, had power to decide the case under the Brussels Convention. In July 1995, the Nanterre court upheld its jurisdiction. It reasoned that UGIC is a Canadian company without a place of business in the EU and thus the jurisdictional provisions of the Brussels Convention do not apply to it. The Court awarded judgment on the amount claimed by UGIC plus interest.

On appeal to the Cour d'Appel in Versailles, the Court decided in November 1998 to stay proceedings and to refer two issues to the ECJ for a preliminary ruling under Title II of The Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, as amended (the "Brussels Convention").

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