In Tonicstar Limited v Allianz Insurance PLC & Ors  EWHC 2753 (Comm) Mr Justice Teare confirmed that where an arbitration clause specifies that the arbitrators should have “experience of insurance or reinsurance”, it will not be sufficient for a proposed arbitrator to have experience of insurance or reinsurance law, or having worked as a professional advisor to the insurance or reinsurance industry; the experience must be in the business of insurance or reinsurance itself.
In the present case, the relevant arbitration clause stated that the arbitrators must have “not less than ten years’ experience of insurance or reinsurance”. Allianz had appointed Mr Alistair Schaff QC as their arbitrator. It was not disputed that Mr Schaff had considerably more than 10 years’ experience of insurance and reinsurance law. However, Tonicstar argued that experience working with or on behalf of the insurance industry was not sufficient for the purposes of the clause. What was required was experience working in the industry itself. It noted that this position was supported by a previous decision of Morison J on this exact point, Company X v Company Y unreported, 17 July 2000. Allianz argued that this previous decision was obviously wrong, and should not be followed.
Teare J noted that where there was a first instance judgment on a similar issue, it should generally be followed unless there was a powerful reason not to do so. Although Teare J indicated some sympathy with Allianz’s arguments that experience in this context should include experience gained from working with or for the insurance or reinsurance industry, he did not consider that there were sufficiently powerful reasons for departing from the decision of Morison J. He therefore concluded “Mr Schaff, notwithstanding his undoubted experience of insurance reinsurance derived from acting as counsel in those fields, cannot be appointed as arbitrator in this case.”