HT-2022-000022 - [2025] EWHC 1238 (TCC)

Accor objects to Clauses 4(ii)(a) and (b) of the AAE, which says that the Insurer will not make any payment where this would “expose the Insurer to any sanction, prohibition or restriction under United Nations resolutions, and or trade and economic sanctions, laws and or regulations of the European Union, United Kingdom, United States of America and/or Australia” or “be in breach of any criminal or regulatory law or provision”. Mr Blackett argues that Insurers must have some exposure to all these jurisdictions, and must consider there is some real possibility that laws might exist or be enacted in these jurisdictions which would prohibit them paying to Accor monies which the English court had ordered Lloyds to pay. Otherwise the Insurers would not include these terms. The ability to avoid payment should be contrasted to the position of Lloyds, who could not escape a liability to pay Accor on these bases. He argues that Accor should not be forced now to investigate and then, for the rest of the proceedings, continuously to monitor UN, EU, US and Australian laws to look for anything that might render the policy unenforceable. If monies are simply paid into Court, this issue is avoided. Finally, Mr Blackett argues that international tensions and the US legal and policy landscape is such where one cannot dismiss, with Accor in the hotel, casino, resort and golf club sectors, as fanciful the possibility that the US, or another nation, might take some unforeseen step which would operate to relieve the Insurer of having to pay Accor under the terms of the AAE.

Mr Webb KC argues that non-payment under this boilerplate term is fanciful in the circumstances of this case. Whilst the term could be of relevance to different parties in different circumstances, there is no real risk in the circumstances of these parties.

There is no existing sanction, prohibition or restriction identified as causing any specific concern. I consider that the possibility of such a sanction, prohibition or restriction coming into force in the future so as to prevent payment out pursuant to an adverse costs Order issued by an English Court, payment being made to a UK registered company (Accor) by a regulated insurer incorporated in England is, notwithstanding recent US trade policies and the identity of the US President (to which Mr Blackett is effectively referring), insufficiently realistic to render the proposed policy inadequate security. Whilst the inclusion of a boilerplate exclusion of this type is likely required for reasons of governance, its mere existence does not itself establish a real risk in the context of this case. With different parties on different facts, such a clause may present a real concern.