In a recent decision, Certain Underwriters at Lloyds, London v. Uniroyal, C.A. No. N14C-12-210 (Del. March 23), the Delaware Supreme Court considered the “fundamental question” of whether “Delaware courts are required to treat insurance contracts that are part of a broad insurance program as legal documents with meaning that varies substantially based on where each claim happens to arise,” or, alternatively, “whether these contracts should be given a more consistent, predictable meaning in accordance with the expectations of the parties to them at the time they made their bargain.” In an opinion carefully analyzing and applying the Restatement (Second) of Choice of Law’s “most significant relationship framework,” Chief Justice Leo E. Strine wrote for a unanimous court that the latter approach should prevail.
In the early 1950s, Uniroyal (later acquired by Chemtura), a chemical company, purchased a variety of insurance policies from Lloyd’s Underwriters and Home Insurance Co. to address potential environmental liabilities. These policies “were part of a comprehensive insurance program that covered the chemical company’s operations around the world.” However, at the time of execution, there were several connections between the policies and New York in particular, including the “place of contracting, place of negotiation, place of performance, and Uniroyal’s principle place of business.”
