Before the High Court, the respondents sought indemnities for losses said to be caused by the Covid-19 pandemic. The High Court held that the “applicable law and jurisdiction” clause was non-exclusive in nature, viz it gave the respondents the choice of bringing proceedings in the courts of the country where the policy had been issued or in England. In consequence, the High Court held that it had jurisdiction over the claims. The appellants appealed to the Court of Appeal.

Decision: Appeal allowed.

Held: The correct construction of the clause depends on the meaning which the words would convey to a reasonable policyholder. On the facts of this case, the first sentence of the clause in question dealt with jurisdiction, governing law and the need to apply local practices, thereby demonstrating that it contained the primary and mandatory rule. By contrast, the second sentence, dealing as it did only with jurisdiction, contained a fallback rule, to be applied only if the local court did not accept jurisdiction. Where, as here, the local courts had been willing to accept jurisdiction, the clause did not give the English courts jurisdiction over the claim.

Comment: The “applicable law and jurisdiction” clause in this case was not, as has been said elsewhere, the “epitome of the draftsman’s art”.2 Indeed, that the judge at first instance and Andrews LJ in the Court of Appeal were able to construe it as a non-exclusive jurisdiction clause, while Males and Nugee LJJ—whose conclusions carried the day—found it to be something very different perhaps demonstrates the difficulties of subjecting to critical analysis words written in English by those who do not use that language every day and so are not familiar with its idiom.