Lexington Insurance Co v AGF Insurance LTD; and Lexington Insurance Co v Wasa International Insurance Co Ltd [2009]

In one of the most significant reinsurance decisions of recent years, the House of Lords last week unanimously allowed the appeal of reinsurers Wasa and AGF against the Court of Appeal's judgment in favour of their US reinsured, Lexington. The House of Lords held that although Lexington had settled various contamination exposures sustained over a 44-year period on the basis of a decision of the Supreme Court of Washington, reinsurers were not obliged to follow the settlement because the period of cover under the reinsurance should be interpreted under English law, by which it was clearly limited to three years.

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