Csr Ltd V. Cigna Insurance Notes

CSR Ltd. v. Cigna Insurance

Facts

The NSW proceedings were brought by Cigna Insurance Australia Limited ("Cigna Australia"), Cigna Corporation Inc ("Cigna Corporation") and certain insurance companies (together referred to as "the plaintiffs") which, with Cigna Australia, insured CSR at various periods between 1978 to 1993. They were brought against CSR, CSR America and other companies which insured CSR over that period.

CSR is a company incorporated in Australia carrying on business in this and other countries. Its head office is in Sydney. CSR America is a company incorporated and carrying on business in the United States of America. It is a wholly owned subsidiary of CSR Investments Overseas Limited which, in turn, is a wholly owned subsidiary of CSR.

Cigna Corporation is a company incorporated and, apparently, carrying on business in the United States of America.

CSR’s liability relating to asbestos claims: Between 1948 and 1966 CSR acted as sales agent for its subsidiary, Midalco Pty Limited ("Midalco"), which was formerly known as Australian Blue Asbestos Pty Limited. Midalco mined and processed blue asbestos at Wittenoom in Western Australia. As Midalco's agent, CSR sold raw asbestos fibre to various companies in the United States, including Johns-Manville International, a manufacturer of asbestos products in New Jersey…. Claims have been made and proceedings brought in the United States against CSR and, in some cases, CSR America by persons who have suffered injury in consequence of the inhalation of asbestos fibres ("the American asbestos claims").

Asbestos claims have also been made against CSR in this country, both for personal injury and for property damage ("the Australian asbestos claims").

Insurance claims by CSR: So far as is relevant, the policies pursuant to which CSR was insured between 1978 and 1993 are public risk and product liability policies. Generally speaking, they were issued in respect of CSR's operations worldwide… On 29 November 1991, CSR wrote to Cigna Australia and other insurers at risk at various times between 1979 and 1988 seeking indemnity from them in respect of the American asbestos claims and, also, the Australian asbestos claims (together referred to as "the 1991 claims"). Cigna Australia and the other insurers denied liability.

In June 1995, the appellants filed a complaint against their insurers and, also, against Cigna Corporation in the United States District Court for the District of New Jersey. By that complaint, CSR and CSR America seek declarations that they are entitled to indemnity with respect to the American asbestos claims from CSR's insurers and, also, from Cigna Corporation, as the alter ego of Cigna Australia.

Statutory claim for damages by CSR in the US: In addition to its claim for indemnity, CSR, but not CSR America, seeks damages in the US proceedings against Cigna Corporation… It is also pleaded that Cigna Corporation is liable for statutory damages for violation of SS 1 of the Sherman Act and for violation of NJ Stat Ann SS 56:9-3. Apparently, the latter Act is the State counterpart of the Sherman Act.

Proceedings in Australia: In response to the US proceedings, Cigna Australia, Cigna Corporation and a number of insurers who are respondents to these appeals commenced the present proceedings against CSR, CSR America and other insurance companies in the Supreme Court of New South Wales, Commercial Division…. By their further amended summons, Cigna Australia and its co-plaintiffs, the respondents to these appeals, seek permanent anti-suit injunctions restraining CSR and CSR America from taking further steps in the US proceedings. Cigna Australia and its co-insurers also seek negative declarations to the effect that they are not liable to indemnify CSR or CSR America in respect of the 1991 claims.

Difference between the US and NSW proceedings: There are two distinct differences between the US proceedings and the NSW proceedings. First, the US proceedings are concerned solely with the American asbestos claims. On the other hand and notwithstanding that, since its letter of 17 March 1992, CSR has apparently not sought indemnity with respect to the Australian asbestos claims, the NSW proceedings relate to those claims as well as the American claims.

The second point of difference concerns CSR's claim for statutory damages under the Sherman Act. Although it seems that CSR could not itself have brought proceedings in New South Wales against Cigna Corporation, it also seems likely that it can now cross-claim against it in the NSW proceedings for damages of the kind it seeks in the US proceedings for interference with its contractual relations and for misrepresentation.

Holding

Power to protect the process of a court

It is clear from the rationale for the exercise of the power to stay proceedings and, also, from the words "oppressive", "vexatious" and "abuse of process" in Voth, in Oceanic Sun and in the earlier cases considered in Oceanic Sun, including St Pierre v South American Stores (Gath & Chaves) Ltd, that the power to stay proceedings on grounds of forum non conveniens is an aspect of the inherent or implied power which, in the absence of some statutory provision to the same effect, every court must have to prevent its own processes being used to bring about injustice.

The counterpart of a court's power to prevent its processes being abused is its power to protect the integrity of those processes once set in motion. And in some cases, it is that counterpart power of protection that authorises the grant of anti-suit injunctions. Thus, for example, if "an estate is being administered ... or a petition in bankruptcy has been presented ... or winding up proceedings have been commenced ... an injunction [may be] granted to restrain a person from seeking, by foreign proceedings, to obtain the sole benefit of certain foreign assets". Similarly, as Gummow J pointed out in National Mutual Holdings Pty Ltd v The Sentry...

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