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English court seizes the day to interpret political violence policy: Hamilton Corporate v Afghan Global & Ors

Posted on 4 July 2024

In Hamilton Corporate Member Ltd & Ors v Afghan Global Insurance Ltd & Ors [2024] EWHC 1426 (Comm), the English High Court provided useful guidance on the meaning of "seizure" in the context of a political violence insurance policy.


Anham owned and operated a warehouse in Afghanistan which was used to distribute foodstuffs for the US military.  Following the withdrawal of US forces in 2021, the Taliban seized the warehouse ''by force of arms''. Anham contended that the warehouse was covered by an insurance policy issued by Afghan Global Insurance and reinsured by the claimant reinsurers pursuant to the terms of the AFB Political Violence Wording. It therefore sought an indemnity for the full extent of the cover ($41million). However, reinsurers denied that they were liable, contending that any loss from the seizure fell within the scope of an exclusion which provided that:

This Policy does not indemnify against loss for damage directly or indirectly caused by seizure, confiscation, nationalisation, requisition, expropriation, detention, legal or illegal occupation of any property insured hereunder, embargo, condemnation, nor loss or damage to the Buildings and/or Contents by law, order, decree or regulation of any governing authority, nor for loss or damage arising from acts of contraband or illegal transportation or illegal trade.

Reinsurers sought a declaration of non-liability and applied for summary judgment in relation to that claim. Anham resisted the application, contending that, for the exclusion to operate, the relevant seizure must be by a governing authority, which did not extend to the Taliban. Alternatively, Anham submitted that the meaning of the exclusion clause was unclear and further factual evidence was required, such that the application for summary judgment was premature.

Interpretation of insurance clauses

As Mr Justice Calver noted, the general principles of contractual interpretation apply to the interpretation of reinsurance contracts. Accordingly, the court must ascertain what a reasonable person would have understood the contracting parties to mean by the language used, considering the contract as a whole and the factual background. In cases involving specialist brokers and commercial policyholders, the policyholder will be taken to be familiar with basic principles of insurance law and judicial interpretation of common terms, such as the word "seizure".  

The judge also emphasised that an exclusion in a reinsurance policy defines the scope of cover, rather than excluding liability for cover which would otherwise have existed. There was therefore no scope for any presumption that the exclusion in this case should be narrowly construed against the reinsurers.


Addressing the language of the clause, Mr Justice Calver accepted reinsurers' case that ''seizure'' should be given its natural meaning, and was not qualified by the words ''by law, order, decree or regulation of any governing authority''. That natural meaning was a matter of settled judicial authority, and covered acts of taking forcible possession, either by lawful authority or overpowering force. The term was also not confined to acts of state, but could include actions taken by a non-governmental authority. Accordingly, on a natural and ordinary reading, the exclusion extended to seizure of the warehouse by the Taliban.

That conclusion was not undermined by Anham's case on the relevant factual matrix or commercial purpose of the exclusion. The judge disagreed with Anham that the exclusion was equivalent to standard clauses in the marine market which only exclude seizure by government authorities. He also rejected the argument that it was necessary to take into account the distinction between political risk policies (which typically cover political action which causes loss to property) and political violence policies (which typically cover acts of violence such as war and terrorism). Although it was not in dispute that, generally speaking, there is a distinction between the policy types, what mattered was the actual wording of the relevant exclusion.

In any event, it was clear that the policy only covered physical damage or destruction, distinct from deprivation of loss. The natural and ordinary meaning of ''damage'' required some altered state, and there had been no change to the physical state of the warehouse in this case.


Mr Justice Calver's rejection of Anham's attempts to challenge the ordinary and well-established meaning of "seizure" and instead grant summary judgment in favour of reinsurers is a demonstration of the robust approach that the English court can take to matters of contractual interpretation. Nevertheless, it is important to remember that all policies must be construed on their own terms.

Meanwhile, the judge's approach to the distinction between political risk and political violence policies also provides an important reminder to policyholders to ensure that suitable cover is in place, and not to rely on generalisations about labels. 

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