In Shipowners’ Mutual Protection & Indemnity Association (Luxembourg) -v- Containerships Denizcilik Nakliyat ve Ticaret AS (The “Yusuf Cepnioglu”) [2016] EWCA Civ. 386, the Court of Appeal considered the juridical nature of a foreign statute which gives a victim (in this case, a charterer) the right to sue a defendant’s insurer (in this case, an owners’ club) directly without first suing the insured, and in the circumstances of the case, whether it was appropriate to uphold an anti-suit injunction (“ASI”) which had been made by the court below.

Reliance was placed on the previous decisions dealing with similar foreign legislation, such as The “Hari Bhum” (No. 1) [2004] 1 Lloyd’s Rep. 206; and [2005] 1 Lloyd’s Rep. 67, which considered the provisions of the Finnish Insurance Contract Act 1994 and The “Prestige” (No. 2) [2014] 1 Lloyd’s Rep 309 and [2015] 2 Lloyd’s Rep. 33 concerning the Spanish Penal Code.

In this case, the Court was looking at Turkish law, which provided, amongst other things, that “Article 1478 – the victim may claim its loss up to the insured sum directly from the insurer provided that the claim is brought within the prescription period to the insurance contract”.

The Court determined that the question was whether the Charterers’ right to sue the Club directly was essentially a contractual right, governed by English law as the proper law of the contract, or an independent right, governed by Turkish law.

The Judge had made a number of findings of fact, the majority of which showed that the victim’s rights under Turkish law were to a large extent circumscribed by the contractual provisions between the Club and its Member. The Court found that the right that Charterers were exercising should be classified as a contractual right and it followed that the Charterers were bound to accept that their claim was governed by English law and must be arbitrated in London. It was emphasised that the question is not how the victim obtains a right to recover against an insurer, but what right is obtained.

Having determined that this was the exercise of a contractual right, the correct approach to the granting of an ASI, following The “Angelic Grace” [1995] 1 Lloyd’s Rep. 87, was to grant the ASI restraining the Turkish proceedings unless there were good reasons why an injunction should not be granted. There was no need for the Club to show vexatious or oppressive conduct, as would have been the case if it was a non-contractual right. As Lord Justice Moore-Bick said: “If legislation confers on an injured party the right to recover directly against the wrongdoer’s liability insurer by giving him in substance the right to enforce the contract, he must accept what the legislation gives him including the obligation to pursue any claim in arbitration.”