Dutch insurance and financial services giant ING got some welcome news from Mexico, when an Appellate court struck down a local court ruling that the insurer’s Mexican subsidiary ING Comercial América was liable to the local mining company, Group Fertinal, for $300 million.
The dispute stems from damages suffered by Group Fertinal from Hurricane Juliette in 2001. The company claimed and won a judgment for the entire $300 million policy limits from Comercial América, which had rejected the amount of the claim as excessive. In September 2003 the local judge froze the company’s bank accounts, and ordered the arrest of its managers. This action was widely seen in Holland as little more than judicial blackmail. That view has now been vindicated.
The Mexican Court of Appeal reversed the previous ruling by the lower local court in Mexico City against ING Comercial. It ruled that the insurer should pay the insurance claims based on the actual damages suffered by the insured and covered under the catastrophic insurance policy. The court found that Group Fertinal incurred covered damages of about $94 million.
“The initial ruling would have required ING Comercial América to pay Grupo Fertinal S.A., and certain affiliates, the insurance policy limits of $300 million,” ING said in a company announcement. “This amount would have greatly exceeded the actual damages to Fertinal’s insured properties by hurricane Juliette.”
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