STORY FROM: Reinsurance & Arbitration
House of Lords Orders Transfer of HIH Reinsurance Assets to Australia
April 15, 2008
LONDON - England's highest court has ruled that reinsurance assets held in England for the insolvent HIH group of Australian insurance companies should be transferred to Australia for distribution. McGrath v. Riddel ( UKHL 21).
In an April 9 opinion, the House of Lords held that English courts have the power to transfer assets from a provisional liquidation to the principal liquidators and, in this case, such a transfer is required under the "principle of universalism."
HIH, which went under in 2001 with estimated debts of up to $5.3 billion, is being liquidated in the New South Wales Supreme Court ...