Should a third party bringing a direct action against a P&I Club be bound by a jurisdiction or an arbitration clause concluded between the insurer and the insured?

Abstract

This research will contain a systematic analysis of direct-action claims in relation to dispute resolution clauses contained in liability insurance policies under English law. In order to decide whether a third party should be bound by a jurisdiction clause or an arbitration agreement agreed in a liability insurance policy, this research will seek to answer the question of whether this right is a statutory right in which case it will be governed by law found in legislation or whether it is to be determined by the substantive law of the contract. In other words, the first question is whether a third party is trying to enforce a contractual obligation, or an independent right given by a statue. If a third party is trying to take benefit of a contract, they have to take its burden with it. Otherwise, P&I clubs may face claims from unknown parties in unknown jurisdictions, subjecting them to unknown procedural rules which were never contemplated in the insurance contract. Before talking about different scenarios where a party might need weaker-party protection, the paper will explain why a third party who is trying to enforce a contractual obligation should be bound by a jurisdiction agreement or an arbitration clause of that contract.

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ORCID for Hasan, Tahsin Azizagaoglu: orcid.org/0000-0002-4110-0505

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