Introduction
On January 15, 2021, the UK s Supreme Court (UKSC) rendered
its much-awaited decision on business interruption (BI) coverage
for COVID-19 (the Test Case ). See our earlier postings
for a review of the lower court decision
2 BI coverage is typically offered as
additional insurance on a property insurance policy. BI coverage is
designed to protect the insured from lost revenue and increased
business expenses that might result from a covered property loss
policy (such events being described as insured
perils ). However, many policies also include extensions which provide coverage even where there may
be no damage to, or loss of, property. Examples include
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Liquidated damages clauses are often attacked in common law jurisdictions for being unenforceable penalties . The test for what constitutes a penalty has been reviewed in common law jurisdictions over recent years. Last month, the Singapore Court of Appeal gave welcome clarity to the penalty test in that country.
Background: The rule against penalties
A contractual breach can create a host of issues, not only over liability, but also the consequences arising out of it. To provide some certainty, parties often stipulate in the contract what damages one party has to pay if it breaches the contract in a certain way. Such provisions are commonly known as liquidated damages clauses, because the clause defines or liquidates the damages that are payable.
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On August 26, 2020, the United Kingdom Supreme Court handed down its unanimous combined decision in the cases of
Unwired Planet v. Huawei and
Huawei v. Conversant. Both cases involved questions of:
Whether the contracts entered into by those who had participated in standards setting by the European Telecommunications Standards Institute (ETSI) and agreed to license any standards essential patents (SEPs) they held on Fair Reasonable and Nondiscriminatory (FRAND) terms contemplated such FRAND terms being set out on a global basis;
Whether the FRAND requirement consisted of separate fair, reasonable and non-discriminatory components or whether the term was a single unitary obligation;
AXIS Capital Holdings Limited ("AXIS Capital" or the "Company") (NYSE: AXS) today announced a preliminary fourth quarter net claims estimate in the range of $195 million to $205 million, pre-tax, for