Source: All England Reporter
Publisher Citation: [2008] All ER (D) 192 (Jun)
Neutral Citation: [2008] EWHC 1331 (Comm)
Court: Queen's Bench Division, Commercial Court

Christopher Clarke J

Representation Alistair Schaff QC and Rebecca Sabben-Clare (instructed by Clyde & Co) for the claimant.
  Colin Edelman QC and Neil Hext (instructed by Kennedys) for the defendant.
Judgment Dates: 16 June 2008


Insurance - Reinsurance - Risks insured - Copper-mining company constructing new copper smelting facilities - Reinsurance cover expressed to be construction all risk and erection all risk including testing and commissioning - Amendments made to slip by striking out certain words - Part of facility not working correctly - Reinsurers notified of claim - Reinsurers claiming reinsurance not covering loss - Trial of preliminary issues - Whether court entitled to have recourse to deleted words.

The Case

When determining whether an agreement for reinsurance cover should be construed having regard to words deleted in various slips, the court ruled that the diversity of authority rendered it difficult for a judge of first instance to recognise when recourse to deleted words might properly be made. The tenor of those authorities appeared to be that in general such recourse was illegitimate, save that; deleted words in a printed form might resolve the ambiguity of a neighbouring paragraph that remained; and the deletion of words in a contractual document might be taken into account, for what, if anything, it was worth, if the fact of deletion showed what it was the parties agreed that they did not agree and there was ambiguity in the words that remained. That was classically the case in relation to printed forms, or clauses derived from printed forms, but could also apply where no printed form was involved. Even if recourse is had to the deleted words, care had to be taken as to what inferences, if any, could properly be drawn from them. The parties might have deleted the words because they thought they added nothing to, or were inconsistent with, what was already contained in the document ; or because the words that were left were the only common denominator of agreement, or for unfathomable reasons or by mistake. They might have had different ideas as to what the words meant and whether or not the words that remained achieved their respective purposes. Further, even in the cases where the fact of deletion was admissible as an aid to interpretation, there was a great difference between a case where a self contained provision was simply deleted and another case where the draft was amended and effectively re-cast. Where the first provision contained a number of ingredients, some assisting one party and some assisting the other, and that provision was removed, it by no means followed that the parties intended to agree the converse of each of the ingredients in the earlier provision.

Practice Areas

If you are a LexisLibrary subscriber you can read more about this case here.