In Axa Corporate Solutions SA v National Westminster Bank Plc & Marsh Ltd [2010] EWHC 1915 (Comm) Axa sought a declaration by the Court that a terrorism exclusion clause had been incorporated into its renewal of a public and products liability (PPL) policy with RBS, of which NatWest is a group company. The action arose after NatWest notified Axa of potential claims under the PPL policy as a result of it being sued in the US by victims of Hamas suicide bombings in Israel alleging that a British charity, Interpal, was a fundraiser for Hamas and it had collected donations through NatWest bank accounts.

The case turned on the factual events surrounding the renewal of the policy. In 2002, Axa faxed a renewal indication to Marsh, acting as broker of RBS, which referred to a “Terrorism exclusion (wording to be agreed)”. There was no evidence that this fax had been forwarded to RBS by Marsh, nor was it established that RBS or NatWest had knowledge of the fax’s content.

The Court, finding in Axa’s favour, considered that the terms set out in the fax reflected the basis on which Axa had offered renewal, subject to amendment by agreement. Such an amendment had not been shown in evidence. It was immaterial that RBS was unaware of the exclusion, as Marsh was under a duty to communicate renewal terms to its client in its capacity as duly authorised agent. Axa would reasonably have expected RBS to have been made aware of the exclusion.

Further, the terms of the exclusion were deemed sufficient, as the phrase “Terrorism exclusion” was capable of both interpretation and application. The Court concluded that no further wording was required to incorporate the term into the renewed PPL policy.