## Facts

- Owens Corning arranged a worldwide property insurance program through its broker, Marsh & McLennan (Bermuda branch), seeking a single program rather than separate regional placements.
- XL offered coverage on express special conditions, including (i) arbitration in London under the Arbitration Act 1996 and (ii) policy interpretation under the internal laws of New York.
- Marsh & McLennan, acting for Owens Corning, accepted XL’s quotation; XL then issued a binder that did not restate the special conditions.
- XL later issued full policy wording stating the policy followed the underlying form but included XL’s London arbitration clause and the New York governing-law clause; no objection was raised for Owens Corning.
- Owens Corning later sued its insurers (including XL) in Delaware, seeking declarations of coverage for certain Y2K-related costs.
- XL applied in the English Commercial Court for an anti-suit injunction to restrain Owens Corning from continuing the Delaware proceedings and to require arbitration in London.
- Owens Corning argued that New York law governed the arbitration agreement and, under that law (including the FAA), the arbitration clause was not enforceable; therefore, the Delaware suit was not a contractual breach.

## Issues

1. Whether the insurance contract incorporated a binding London arbitration clause despite the binder’s failure to set it out.
2. Whether the validity and effectiveness of the arbitration agreement were governed by New York law (as the policy’s governing law) or English law (as the law applicable to a London-seated arbitration and the requested anti-suit relief).
3. Whether an asserted inability to enforce the clause under the FAA justified refusing an anti-suit injunction.

## Decision

- The court held that the contract included a valid London arbitration clause because XL offered cover subject to that clause and Owens Corning’s agent accepted; the binder did not operate as a counter-offer.
- The court held that, for purposes of determining the existence/validity of the arbitration agreement and granting anti-suit relief in support of a London arbitration, English law applied.
- The court rejected the argument that the New York governing-law clause required treating the FAA as controlling on the arbitration clause’s enforceability in this context.
- The court granted an anti-suit injunction restraining Owens Corning from pursuing the Delaware proceedings against XL and requiring the dispute to proceed in London arbitration.

## Legal Principles

- A quotation offering insurance cover on stated special conditions can form a concluded contract upon acceptance by the insured’s agent; later documentation that omits those conditions does not necessarily negate incorporation.
- A contractual choice of law for the substantive contract does not automatically determine the law governing the arbitration agreement; where arbitration is seated in London and relief is sought in England, English law may govern the arbitration agreement’s validity and the court’s supportive powers.
- English courts will generally restrain foreign proceedings brought in breach of an arbitration clause unless there is a strong reason to refuse relief; comity does not ordinarily displace enforcement of the parties’ agreement to arbitrate.

## Conclusion

The Commercial Court enforced a London arbitration clause in an international insurance policy and restrained parallel Delaware litigation, holding that English law governed the arbitration agreement for purposes of anti-suit relief notwithstanding a New York governing-law clause for the substantive policy.


XL Ins. Ltd. v. Owens Corning Corp., [2000] 2 Lloyd’s Rep. 500 (Q.B. 2000)