The plaintiff, Wiener Städtische Versicherung AG (VIG), a reinsurer, sought to recover funds from the defendant, Infrassure Ltd., a retrocessionaire, under a retrocession agreement.
VIG had paid its portion of a $140 million settlement to Zurich Insurance Company Ltd. (Zurich) for a business interruption claim by Vale (Canada) Limited.
Infrassure denied liability, arguing it was not contractually bound to follow the settlement and that Zurich failed to take proper and businesslike steps.
The court found that Infrassure was contractually bound by the "follow the settlements" clause and that Zurich had taken proper and businesslike steps in reaching the settlement.
Judgment was granted in favour of VIG for the settlement amount and loss adjustment costs, with the court denying VIG's claim for punitive damages.
