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02 August 2006
A Mexican insurance company has unsuccessfully brought a claim in Norway against a major Russian shipowner. The claimant argued, among other things, that the Russian company could be sued in Norway because it had its protection and indemnity insurance with Norwegian mutual insurance company Skuld. The claimant based its claim on Section 32 of the Civil Procedure Act, which states that a party domiciled outside Norway can be sued in Norway where it has an asset in the country. The claimant argued that the shipowner's membership in Skuld represented a capital asset in itself, as Skuld is a mutual insurance company owned by its members.
The defendant argued that membership itself did not constitute a capital asset and that the dispute did not have a sufficient connection with Norway.
The Supreme Court held that an insurance agreement with a Norwegian mutual insurance company did not in itself constitute a sufficient connection with Norway. Further, it held that the claimant's allegation that Skuld was jointly liable with the shipowner did not constitute a sufficient connection with Norway.
The court also commented on the question of whether mere membership in a Norwegian mutual insurance company implied that the insured had a capital asset in Norway. However, the court's comment on this issue was unclear; it stated that it was "inclined to think that the shipowner's rights under the insurance agreement, which obviously have economic value, would be covered by Section 32".
A valid unpaid claim under an insurance agreement is an asset which is relevant under Section 32. Claims for return of premium or similar claims may also constitute an asset. However, in the case at hand the key question was whether membership in a Norwegian mutual insurance company could be regarded as an asset where the member had no insurance claim or other pecuniary claim against the insurer. Arguably, the court did not answer this question, as it is not clear that membership as such has economic value.
Section 32 cannot apply to parties domiciled in a country which is party to the Lugano Convention. Therefore, Section 32 is not applicable to parties domiciled in the European Union or the European Free Trade Association member states.
For further information please contact Anders W Færden or Gaute Gjelsten or Trond Eilertsen at Wikborg, Rein & Co by telephone (+47 22 82 75 00) or by fax (+47 22 82 75 01) or by email (firstname.lastname@example.org or email@example.com or firstname.lastname@example.org).
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