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Loughrea-based Charlie’s Bar claiming against Slovenian insurer 
The Commercial Court has referred for arbitration part of a dispute between a Galway bar and an insurer over a refusal to provide an indemnity for business interruption insurance due to the pandemic. 
Charlie’s Bar, Loughrea, Co Galway, operated by Charwin Ltd, has brought a claim against Slovenia-based Zavarovalnica Sava insurance Company. 
Charwin is seeking declarations including that it is entitled to an indemnity under the policy for interruption/losses after March 15th last year when the first Covid lockdown was announced. 
It says the indemnity refusal and “loss of licence”, under the terms of its policy, for which it paid a premium of nearly €5.000, amounted to a breach of contract. It says the policy provided cover of €175,000 for business interruption and €100,000 for loss of licence. 
The insurer asked the court to refer the matter to arbitration under an international commercial arbitration law (the Model Law) and that the court proceedings be stayed. 
Charwin opposed the application and contended the dispute was not arbitrable on the grounds it gave rise to fundamental issues of public policy which were not capable of being determined by arbitration. 
On Wednesday, Mr Justice David Barniville ruled the part of the case relating to the indemnity was clearly arbitrable and there was no reason to conclude otherwise on grounds of public policy. 
However, the scope of the arbitration relating to Charwin’s claim for damages, under the Central Bank (Supervision and Enforcement) Act 2013 for alleged breach by the insurer of certain regulatory obligations “does not fall within the scope of the (arbitration) clause”. 
In those circumstances he refused the defendant’s application to refer that part of the case to arbitration and that matter will now have to be determined by the court, he said. 
Test case 
The judge said a separate but similar case taken by the Old Imperial Hotel in Youghal,Co Cork,operated by Coachhouse Catering Ltd, is to be heard in October relating to the Central Bank’s Covid-19 and business interruption insurance Supervisory Framework. 
That case is being treated as a test case for the purposes of the Supervisory Framework. Coachhouse’s claim under the Model Law arbitration system was withdrawn against Zavarovalnica Sava insurance Company while its claim against a second defendant, its Irish broker, Frost Insurance trading as Frost Underwriting UQuote, was adjourned generally. 
The judge said the Supervisory Framework expressly envisages arbitration as a means of legal action by a policyholder against an insurer in the case of a Covid-19 business interruption claim. 
In circumstances where the Coachhouse claim relating to the Supervisory Framework will be heard over three days in October, it might make sense for the parties in the Charwin case to await the court’s determination on Coachhouse, he said. 
Charwin’s claim for damages is an alternative cause of action and may only arise where Charwin fails in its indemnity claims, he said. 
He adjourned making further directions in the Charwin case to later this month when he hears from lawyers from both sides and after they have considered his judgment. 
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