New version of Nordic Marine Insurance Plan braces for Brexit – bolstering Nordic arbitration

The 2019 version of the Nordic Marine Insurance Plan of 2013 (the ‘’Plan’’) has been approved by the Plan’s Standing Revision Committee and will formally enter into force on 1 January 2019. The revisions include a clearer borderline between war and marine risks, an automatic reinstatement clause for loss of hire and several other amendments. It also introduces an arbitration clause.

Where insurance has been effected with a Nordic claims leader, the new version of the Plan still ­provides, in Clause 1-4A, that the courts at the place of the claims leader’s head office shall have exclusive jurisdiction over disputes in connection with the insurance and that the law of the place where the claims leader has its head office shall be applied. The new arbitration clause – which we will explain below – has however been introduced in the new version of the Plan as an option for insurances with Nordic claims leaders.

Previous versions of the Plan have stated that disputes arising from insurance contracts effected with a non-Nordic claims leader shall be governed by Norwegian law. However, the Plan made no mention of jurisdiction in these cases. In many instances this has come as a surprise to litigants, who often assumed that the Plan provided for exclusive Norwegian jurisdiction in these cases, but who have subsequently found themselves involved in proceedings in unexpected jurisdictions pursuant to the Brussels I Regulation and Lugano Convention.

The new arbitration clause, Clause 1-4B, in the 2019 version of the Plan now makes arbitration the default dispute resolution mechanism where there is a non-Nordic claims leader. The arbitration clause provides:

  • The arbitration shall be administered by the Nordic Offshore and Maritime Arbitration Association (NOMA) pursuant to its Rules and Best Practice Guidelines
  • The place of arbitration shall be Oslo unless otherwise agreed, with Norwegian law to apply
  • If the parties have agreed another Nordic Country as the place of arbitration, the law of that country shall apply
  • If the parties have agreed to arbitration in a non-Nordic country, Norwegian law shall apply
  • Any changes to the above must be made in writing

Whilst making arbitration the default position is aimed at aligning the Plan with market practice, the change has also been brought about by the looming consequences of Brexit.

Today, the Brussels I Regulation and Lugano Convention allows for free movement of judgments across Europe. However, from the time of the UK’s departure from EU on 29 March 2019 the issue of European recognition and enforcement of judgments handed down by English courts will be fraught with uncertainty. It is far from clear whether the Brussels I Regulation will continue to apply in the EU in respect of UK judgments and as of today the UK is not a signatory to the Lugano Convention. Players attempting to secure enforcement of English judgments abroad will therefore have to rely on the national laws of each European jurisdiction which may present onerous procedural hurdles or deny enforcement altogether.

This clearly poses a problem to non-Nordic claims leaders with a preference for UK jurisdiction. Better then, the Plan’s draftsmen have thought, to refer these matters to arbitration. Regardless of Brexit, arbitral awards are ensured cross-border effect pursuant to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Effect on Nordic Arbitration

As noted, the Plan determines that NOMA by default shall assume the functions of administering the arbitral process ­pursuant to the Association’s Rules and Guidelines.

NOMA was established in 2017 and its rules and guidelines have been developed to promote high quality, transparent and cost-efficient arbitrations. Building on both the UNCITRAL Model Law on Arbitration as well as the IBA Rules on the Taking of Evidence, the goal is to offer a pragmatic approach to dispute resolution, in keeping with the Nordic tradition. However, whilst Nordic in origin, there is nothing in the NOMA rules preventing issues under English law governed contracts to be arbitrated under NOMA. The Plan’s inclusion of NOMA may therefore well lead to “Nordic Arbitration” attracting a wider audience.