Our client provides a wide range of water treatment products and services. It was retained to specify and provide a water purification system for use in a new dialysis unit at the main hospital in the Commonwealth of the Northern Mariana Islands (“CNMI”), a US dependency.
The specified product failed to meet CNMI’s certification requirements, a fact which was known and concealed by a former employee of our client who was imprisoned for his role in the concealment. The government of CNMI sued our client for damages and loss of profits, and that claim was compromised on a confidential basis.
We are retained to recover the damages paid to CNMI, and our client’s US defence costs, from our client’s captive insurer and, ultimately, from the captive’s UK based reinsurer.
The dispute involves various complex issues relating to the interplay of our client’s various local policies and the master policy which, together, comprise our client’s global insurance programme. It also involves issues relating to the correct jurisdiction and applicable law where the relevant local policy is silent and up to three separate jurisdictions are arguably the most appropriate to hear the dispute. It also involves issues relating to the extent to which UK reinsurers are bound by foreign judgments.