Cedent's Breach Leaves Reinsurers Off The Hook, U.K. Judge Rules

LONDON - A cedent's breach of a condition precedent absolves its reinsurers of liability for an estimated $26.9 million in business interruption and property damage losses sustained by a Venezuelan aluminum plant, an English judge has ruled. Lexington Insurance Company & Others v. Multinacional de Seguros S.A., No. 1170 (Eng. Comm., Queen's Bench Div.)

In a May 23 opinion, Mr. Justice Christopher Clarke of the English Commercial Court, Queen's Bench Division, ruled that the cedent breached the claims settlement clause by waiving its right to assert a time-bar defense to the underlying claim.

In 1997, Multinacional de Seguros S.A., a …