Norwegian Supreme Court to hear appeal on the time bar regime applicable to direct action claims when the marine liability insurer has generally departed from the Insurance Contract Act (1989)

BAHR acts for P&I insurer, Skuld in a dispute with Swissmarine SA and its P&I insurer, Gard regarding time bar. The Appeal Court concluded that Swissmarine’s direct action claim against Skuld was time barred, thus overturning the decision from the District Court. However, the Appeal Court also held that Gard’s claim against Skuld, after Gard partly had discharged Swissmarine’s liability, was not time barred. The Supreme Court has now granted leave of appeal for both Swissmarine’s and Skuld’s appeal.

Time bar regime

The matter is particularly interesting as it concerns which time bar regime that applies to direct action claims when the liability insurer has generally departed from the Insurance Contract Act (1989) (ICA), which is allowed for marine insurers such as Skuld. The Appeal Court held that the ICA section 7-8 second paragraph exhaustively lists the mandatory provisions of the ICA when the assured is insolvent, and accordingly that section 8-6 second paragraph regarding time bar for claims under a liability insurance, could be departed from in the insurance agreement. The Appeal Court further held that Skuld had departed from the ICA, including section 8-6 second paragraph, in its Rules, that this had legal effect for the direct action claimant, Swissmarine and that the applicable time bar regime then was the general Limitation Act (1979). The Appeal Court did not however find it necessary to decide whether section 3 (contractual claims) or 9 (tort claims) applied to the direct action claim.

Limitation Act

Further, the matter concerns whether the Limitation Act (1979) section 8 first paragraph applies to Gard’s claim against Skuld. If this is answered in the affirmative, the Supreme Court must consider whether the Appeal Court applied the time bar provision between Swissmarine and Gard – Gard Rule 81.2 – correctly and, if not, whether Gard has preserved its claim by notifying Skuld of time interruption and time extensions granted to Swissmarine in accordance with the Limitation Act (1979) section 8 fourth paragraph. The Appeal Court held that the Limitation Act section 8 first paragraph applied to Gard’s claim. The Appeal Court also concluded that it was sufficient for Swissmarine to protect time under Gard Rule 81.2 to give notice to Gard pursuant to Gard Rule 81.1, that Skuld had been informed of this notice and accordingly that no further steps were required between Swissmarine and Gard to protect time.