BETWEEN SANCTIONS EXPOSURE AND COMMERCIAL LIABILITY

On 16th October, Freshfields Bruckhaus Derringer LLP published an article reflecting on the case of Mamancochet v Aegis & Others, in which a court in London was asked to decide if an insurer was prevented in paying out on a claim by a Lloyds standard clause which excused insurers from paying an otherwise valid insurance claim where “payment…would expose that insurer to any sanction, prohibition or restriction under [UN, EU or US sanctions]”.   The insurers unsuccessfully contended that the sanctions clause applied wherever payment would expose the insurers to a risk of being sanctioned by an authority.

See also https://wordpress.com/post/raytodd.blog/5022

The articles goes on to pose the question: where a sanctions clause is triggered, are obligations to be suspended or extinguished?  It also points out that the provisional view of the court was that the EU Blocking Statute would not necessarily prohibit a party from invoking a sanctions clause in the context of US sanctions against Iran – if it was relying on a contract term.

http://risk.freshfields.com/post/102f3v0/between-sanctions-exposure-and-commercial-liability-do-you-have-the-protection-y

See also the HFW briefing at –

http://www.hfw.com/Iran-sanctions-The-English-Court-steers-a-course

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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