3.3. Stolt I - the majority's view
The Court of Appeal(1) LA-2016-170365 had in the first phase of this litigation, accepted jurisdiction, based upon Article 2(1) that reads:
"Subject to the provisions of this Convention, persons domiciled in a State bound by this Convention shall, whatever their nationality, be sued in the courts of that State."
When appealed, the majority of the Supreme Court (Stolt I) did not agree with this conclusion.
Justice Normann said that the question was whether the Court of Appeal has interpreted the Convention correctly when concluding that Article 2(1) may also be applied in an insurance case such as the one in question. For matters relating to insurance there are comprehensive rules in Section 3 (Articles 8-14), with direct action dealt with in Article 11(2):
"Articles 8, 9 and 10 shall apply to actions brought by the injured party directly against the insurer, where such direct actions are permitted."
The question, the judge said, is whether Section 3 provides self-contained rules on jurisdiction in insurance matters in general, and, in particular, whether Article 2(1) may supplement Article 11(2) in direct actions.
The articles referred to in Article 11(2) comprise a number of possible jurisdictions, i. a. the domicile of the respondent (Article 9(1)(a)). Exercising this right is, however, subject to "where such direct actions are permitted", see above on the Insurance Contracts Act Section 7-8 and in particular the insolvency stipulation (paragraph 7-7).
The judge found that the rules in Section 3 are exhaustive and consequently that the Court of Appeal had applied Article 2 (in Section 2) incorrectly. She said that Article 2(1) indicates that other rules in the Convention may prevail as lex specialis, and the wording in Articles 2 and 8 indicates that Section 3 regulates jurisdiction exhaustively in insurance matters, except for the express reservations in Article 8.
She also stated:
"In my view, systemic concerns(2) In Norwegian: "systembetraktninger", which means - I believe - that a rule should be interpreted so that it is in harmony with principles and rules in sectors of comparable nature. suggest the same: Several of the general provisions have parallel rules in Section 3. For instance, Article 9(1) permits actions against the insurer in the courts of its domicile, and a parallel rule is found in Article 2(1). Under Article 10, concerning P&I insurance, the insurer may be sued in the courts of the place where the harmful event occurred, and a parallel rule is found in Article 5(3) on the right to sue in the courts for the place where the harmful event occurred in matters relating to tort. It is hard to understand the relevance of Section 3 if the general rules were applicable" (paragraph 78).
Further, she found support for this conclusion in the preparatory works to the Convention and in a House of Lords decision. (3) Jordan Grand Prix v. Baltic Insurance Group, of December 16 1998.
The Court of Appeal had referred to the ECJ's ruling of December 23 2007 in Case C-463/06 Odenbreit paragraph 21, where it is said that the regulation of jurisdiction in Section 3 is "additional" to the general provisions. To this she remarked that:
" the statement is not clear, and, under any circumstance, I cannot see that Odenbreit has such relevance as given to it by the Court of Appeal.
The Court of Appeal has also emphasised the purpose - the consideration for the weaker party, see Odenbreit paragraph 28. To this I would comment that the ECJ, in that case, referred to purpose considerations in support of an interpretation in line with the wording in Article 11(2), cf. Article 9(1)(b), which had the consequence that the injured party in addition to 'the policyholder, the insured or the beneficiary' could sue the insurance company in the courts of its domicile, see paragraph 26.
In the light of the other legal sources in our case, I cannot see that purpose considerations carry much weight. I emphasise that if the purpose were to justify the application of Article 2(1), it would entail an interpretation contrary to the wording of the Convention" (paragraphs 84-86).