OREANDA-NEWS. May 11, 2011. Ingosstrakh OJSIC announces that an intermediate decision has been announced in Israel, made by the international commercial arbitration concerning the dispute between Ingosstrakh OJSIC and the English insurance broker “Overseas Insurance Consultants” and his affiliated persons.

The essence of the dispute is that in 2006, Ingosstrakh OJSIC unilaterally terminated contractual relations with the said insurance broker who was earlier appointed to support reinsurance agreements concluded by Ingosstrakh OJSIC with Israeli insurance companies. The reason for the said termination was the information that the broker, in breach of the powers given to him and without the agreement of the insurance company, issued insurance policies on behalf of Ingosstrakh OJSIC, providing insurance to Israeli individuals and legal entities without a corresponding license on the part of the Ministry of Finances of Israel. In this connection, Ingosstrakh OJSIC, having classified the said activity of the intermediary as swindling, stopped all settlements with the said broker and obliged him to independently regulate the claims of the insured that arose on the basis of insurance policies unlawfully issued to them on behalf of the insurance company. Later, the Ministry of Finances of Israel made an official warning concerning the activity of the said broker and his affiliated persons, and Ingosstrakh OJSIC addressed the police with an application to check the broker’s activity.

Despite the evident characteristics of swindling in the broker’s activity, the arbiter – the resigned judge David Gladstein – considered him duly authorized on behalf of Ingosstrakh OJSIC to conclude insurance agreements and specified that the insurance company should be liable under the agreements concluded by the said broker.

Despite the fact that the arbiter’s decision is intermediate and a number of particular matters (including financial counterclaims of Ingosstrakh OJSIC to the broker) is still to be resolved by the arbiter, Ingosstrakh OJSIC is very disappointed at the decision made and considers it unjust, and the arbiter’s conclusions – unjustified from the point of view of proofs in the case. At present, the company’s Israeli lawyers (the lawyers’ company Naschitz, Brandes & Co.) are studying the arbitration decision made and preparing to take adequate steps aimed at the protection of rights and legal interests of the company.