Rasmus Paustorp
Rasmus Paustorp
Attorney at law, Partner
April 23, 2022

The Danish Supreme Court: A direct claim under section 95(2) of FAL was not barred

Furthermore, HDI argued that BAT's claims against HDI were barred by limitation under Section 3(1) of the Act on Limitation, cf. Section 29(1) of the Insurance Contract Act, since the limitation period against HDI was to be calculated from 18 September 2012, when Kazemier went into bankruptcy. HDI argued that BAT's possible claims against HDI arose at that time pursuant to Section 95(2) of the Insurance Contract Act. HDI argued that BAT could not rely on a possible suspension of the limitation period which might exist prior to the bankruptcy, including that BAT could not rely on any notification of the damage that Kazemier may have made to HDI.

On the other hand, HDI argued that the conflict-of-law clause in the insurance contract concluded between HDI and Kazemier could not be relied on by BAT and that Danish law should apply in the specific case (as also previously established by the Maritime and Commercial Court).

The judgment of the eastern high court

On 24 February 2022, the Danish Supreme Court ruled in a case concerning the limitation of a claim for compensation for the loss of a batch of cigarettes in connection with road transport. Unlike the Maritime and Commercial Court and the Eastern High Court, the Supreme Court found that the victim's claim was not barred by limitation under the Danish Act on Limitation.

However, the Supreme Court held that the limitation period had been interrupted by the bankruptcy of the offender's notification of the damage to his liability insurance company under Section 29(5) of the Insurance Contract Act and that the injured party had thus subrogated to the offender's legal position also in relation to the limitation period.

However, the Supreme Court held that the limitation period had been interrupted by the bankruptcy of the offender's notification of the damage to his liability insurance company under Section 29(5) of the Insurance Contract Act and that the injured party had thus subrogated to the offender's legal position also in relation to the limitation period.

Reasons and findings of the eastern high court

The Eastern High Court noted at the outset that the case before the Court initially concerned whether BAT's claim against HDI was barred by limitation, including whether this question should be decided under Danish or Dutch law, cf. the conflict of laws clause in the insurance agreement between Kazemier and HDI.

Referring to the Supreme Court's judgment of 9 October 2017 in the case between The Port of Assens and Navigators Management (referred to in UfR 2018.461 H), the Eastern High Court then concluded that the conflict of laws clause of the insurance agreement between Kazemier and HDI did not apply to the relationship between BAT and HDI and that the case – as also previously established by the Maritime and Commercial Court – had its closest connection to Denmark. Therefore, the question of limitation was to be decided under Danish law.

The Eastern High Court, like the Maritime and Commercial Court, found that BAT could not rely on a possible suspension of the limitation period by Kazemier under Section 29(5) or Section 95(2) of the Insurance Contract Act, since no claim for damages could rely on a notification of damages to Kazemier be before it went into bankruptcy.

Njord's comments

The decision of the Supreme Court is interesting as it contains some quite fundamental observations and interpretations in relation to subrogation under Section 95(2) of the Insurance Contract Act.

Of particular interest is the fact that the Supreme Court has now established – in general – that the injured party’s subrogation under Section 95(2) of the Insurance Contract Act implies that the injured party (also) subrogates to the offender's , i.e., the position of the insured person in the context of the limitation period.

Thus, the injured party may also claim and rely on the claim for damage made by the offender (the insured party).Thus, the Supreme Court's decision has now established that an injured party's direct claim against a liability insurance company under Section 95(2) of the Insurance Contract Act is barred by limitation in the same way as the claim of the offender (the insured) against the insurance company, including that an injured party can claim and rely on the notification made by the offender (the insured) prior to going into bankruptcy.

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The Danish Supreme Court: A direct claim under section 95(2) of FAL was not barred Copy

On the other hand, HDI argued that the conflict-of-law clause in the insurance contract concluded between HDI and Kazemier could not be relied on by BAT.

14 April 2022

The Danish Supreme Court: A direct claim under section 95(2) of FAL was not barred

On the other hand, HDI argued that the conflict-of-law clause in the insurance contract concluded between HDI and Kazemier could not be relied on by BAT.

14 April 2022