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MS Amlin v King Trader: English Commercial Court upholds marine insurance pay first clauses and clarifies construction of inconsistent terms and incorporation hierarchies

Published on: 13 August 2024

Published by a LexisNexis Commercial expert
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Article summary

MS Amlin Marine NV (on behalf of MS Amlin Syndicate AML/2001) v King Trader Ltd and other companies [2024] EWHC 1813 (Comm)

What are the practical implications of this case?

The decision confirms the enforceability of pay first clauses in marine insurance, and so matters to everyone active in this field and in practice across the sector. That covers not only commercial practitioners and arbitrators, but also insurers, charterers, parties entering into marine insurance contracts and those who draft such agreements. Its impact is broader for commercial practitioners advising, drafting or conducting litigation, because the defendants’ submissions required the court to consider how to approach and interpret contractual provisions that may conflict. The judge addressed three bases for the defendants’ further arguments, namely:

  • instances of inconsistency or repugnancy between a term expressly negotiated and a term drawn from an incorporated set of pre-existing conditions as incorporated terms
  • instances of apparent inconsistency or repugnancy within a suite of contractual provisions that hold the same level in the contractual hierarchy and must be reconciled
  • a subsidiary point on construction and implication...

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