Santander Overturns $912M AXA US PPI Indemnity Ruling in UK Appeal
UK Court of Appeal Decision on Santander and AXA PPI Indemnity Dispute
Background of the Case
LONDON, Sept 15 (Reuters) - Santander won its appeal on Tuesday against a London court ruling that had ordered it to pay about £677 million ($912 million) to French insurer AXA for costs arising from the mis-selling of payment protection insurance in the U.S.
Previous High Court Ruling
London's Court of Appeal overturned a High Court judgment last year, finding that Spain's Santander was not obliged under a 2000 agency agreement to reimburse AXA for costs linked to store-card PPI policies sold before 2005.
AXA and Santander's Involvement
AXA inherited liabilities for the policies through its 2015 acquisition of two Genworth units. Santander acquired GE Capital Bank, which sold the insurance products, in 2009.
Details of the Appeal Court Ruling
Interpretation of the Indemnity Clause
In a ruling delivered by Judge Sara Cockerill, the appeal court said the indemnity clause relied on by AXA covered acts or omissions occurring after the agency agreement took effect on December 1, 2000, and not policies sold beforehand.
Reversal of Previous Judgment
The ruling reverses the previous judgment that awarded AXA an indemnity of about £677 million including interest, with Santander having said previously that roughly 85% of that amount related to policies sold before the agreement had been signed.
Dismissal of AXA's Cross-Appeal
The Court of Appeal also dismissed AXA's cross-appeal, seeking to recover some of its PPI compensation costs.
Reactions from the Parties
Santander's Response
Santander welcomed the ruling and said AXA would now have to repay "the substantial majority of the amount" it had paid.
AXA and Genworth's Response
Genworth's President and CEO Tom McInerney said while it was "very disappointed" by the ruling, it would evaluate the company's next steps, including options for further appeals.
Exchange Rate Information
($1 = 0.7421 pounds)
Reporting Credits
(Reporting by Sam Tabahriti; Editing by Alexander Smith)
