Arbitration Provision Trumps Service of Suit Clause, U.K. Court Rules

LONDON - An arbitration clause in a political risk insurance policy issued by certain Lloyd's underwriters to a U.S. company trumps a service of suit clause and therefore prevents the insured from proceeding with its coverage claims against the underwriters in U.S. state court, an English justice ruled July 30. Ace Capital Ltd. v. CMS Energy Corp., No. 2007 FOLIO 1635 (Eng. Comm., Queen's Bench Div.).

Justice Christopher Clarke of the English Commercial Court, Queen's Bench Division, ruled that the insured breached the policy by suing the underwriters in Michigan state court. The justice therefore granted the underwriters a permanent …