[2025] EWHC 1430 (Comm)

By the end of the trial, the position as to a defence based on sanctions was as follows. All WR Insurers, including Fidelis, relied on US Sanctions as a defence, in part, to the claims against them. Fidelis relied in addition on EU Sanctions. No Defendant relied on UK Sanctions.

The basis of such sanctions-based defences as are pursued lies in the market standard ‘Sanctions and Embargo Clause’, AVN 111, which is incorporated into all relevant policies. It provides in part:

1.

If by virtue of any law or regulation which is applicable to an Insurer at the inception of this Policy or becomes applicable at any time thereafter, providing coverage to the Insured is or would be unlawful because it breaches an embargo or sanction, that Insurer shall provide no coverage and have no liability whatsoever nor provide any defence to the Insured or make any payment of defence costs or provide any form of security on behalf of the Insured, to the extent that it would be in breach of such law or regulation.

In circumstances where it is lawful for an Insurer to provide coverage under the Policy, but payment of a valid and otherwise collectable claim may breach an embargo or sanction, then the Insurer will take all reasonable measures to obtain the necessary authorisation to make such payment.

…