In Starlight Shipping Co v Allianz Marine and Aviation Versicherungs AG & Ors [2011] EWHC 3381 the High Court ruled that the terms of a settlement embodied in a Tomlin Order  could be enforced by summary relief and that it was not necessary to issue fresh proceedings to do so.

Starlight Shipping Co (Starlight) issued proceedings against its insurers (including company and Lloyd’s market insurers) in 2006 in relation to a claim arising out of the loss of a vessel it owned, the Alexandros T. The proceedings were issued in England, due to the existence of exclusive jurisdiction clauses providing for English law and jurisdiction in each of the various insurance contracts. The insurers initially denied liability, but subsequently, in December 2007, settlement agreements were reached, which included English jurisdiction clauses and terms stipulating that a stay of the proceedings would be obtained by way of a Tomlin Order. The settlements also contained clauses in which Starlight agreed to indemnify the insurers against any claim that might be brought against them in relation to the loss of the Alexandros T under the policies.

In April 2011, Starlight issued proceedings in the Greek courts against the insurers and various other defendants for compensation for loss of hire and loss of opportunity arising from the insurers’ failure to perform their obligations under the policies (namely the failure to pay the claim promptly). The insurers then applied in the present action for summary relief to enforce the settlement agreements, and, in the alternative, issued fresh proceedings seeking substantially the same relief.

Mr Justice Burton, mindful of the need to broadly construe release clauses, held that the various Greek proceedings were in clear breach of the widely drafted release in the settlement agreements. He also held that the Greek proceedings breached the English jurisdiction clauses in the insurance policies and the settlement agreements. The insurers, were, therefore, entitled to damages pursuant to the indemnity clause in the settlement agreements in respect of the costs incurred in defending the Greek proceedings. Burton J also held that there was no need for the insurers to issue a new claim in order to obtain the relief they sought, holding that the seeking of an indemnity was plainly a way of “carrying into effect the terms agreed” in the Tomlin Order and settlement agreements.

This judgment is a useful reminder that once a settlement has been reached between the parties, any release clause will be construed widely, and it will be very difficult to attempt to bring any further claims in relation to the same set of facts. From a procedural point of view, the case makes clear that a Tomlin Order may be enforced by summary relief, without the need to issue fresh proceedings.