目录 搜寻网站 您想要搜索什么?
目录

Ramifications under trade credit and political risk insurance policies for an insured’s decision to voluntarily cease business operations within a country

  • Legal Development 2022年3月17日 2022年3月17日
  • 全球

  • Crisis-Ukraine-Russia

The ongoing imposition of sanctions against Russia arising from the attack upon Ukraine creates a number of significant issues for insurers which have written trade credit and/or political risk insurance policies.

Even where sanctions have not forbidden companies’ business in Russia, many companies have voluntarily chosen to withdraw from the Russian market, in whole or in part.  Companies which have voluntarily decided to withdraw from Russia are finding that their Russian counterparties are deeming the voluntary withdrawal to be a breach of contract.  This is particularly the case in respect of consumer products, where ongoing warranty and service obligations may exist long after sale. The affected Russian counterparties are sometimes reacting to the perceived breach of contract by refusing to pay accounts receivable to the withdrawing companies, with the consequence that the withdrawing companies have incurred losses.  The question of whether those losses are covered under a trade credit or political risk policy is a matter of contract interpretation. 

Trade credit policies are designed to provide coverage for an insured in the event of a fortuitous credit event.  Generally, these trade credit policies have certain provisions which impose obligations on an insured to conduct themselves consistent with prudent commercial practice and local laws.  Policies with these provisions might bar coverage for losses arising from an insured’s voluntary breach of its contract with its Russian counterparty, or the insured’s voluntary violation of local laws (such as Russia’s warranty laws in respect of consumer products).  Careful consideration of the policy terms must be undertaken in respect of losses proximately caused by an insured’s voluntary withdrawal from the market.  Insureds would be well-advised to communicate with their insurers before voluntarily undertaking actions that might produce losses.

Matters have escalated further with the threat of countersanctions against companies withdrawing from the Russian market.  News reports indicate that Russian prosecutors are considering a variety of sanctions, including the seizure of the assets of companies that withdraw from the Russian marketplace, including their trademarks.  Political risk policies must be reviewed carefully in order to ascertain coverage for such sanctions. 

Cyber losses arising from the attack upon Ukraine have yet to achieve similar visibility.  These losses may yet arise before hostilities cease.  Insurers and insureds alike would do well to remain in close communication about these exposures, in an effort to avoid later misunderstandings. 

Clyde & Co LLP provides worldwide advice and guidance to the insurance industry and maintains the world’s most comprehensive service offering to trade credit and political risk insurers.  Whatever jurisdiction you may find yourself in, there are Clyde & Co attorneys ready to assist. 

Please reach out to your local Clyde & Co LLP attorney should you have any questions regarding an insured’s decision to cease doing business within a country and the consequences under trade credit and political risk policies for such decisions. 
Below are the contact details for our dedicated trade credit and political risk attorneys in various regions.

Authors: Michael Phillips and Michael Knoerzer

结束

掌握其礼的最新消息

注册您的邮箱,获取其礼最新消息!