Jordan Insurance v AIG litigation – do US sanctions prevent reinsurance payouts?

AIG Europe Ltd has argued in the Commercial Court in London that it cannot pay 414,000 Jordanian Dinars (US $584,000) in reinsurance cover to the Jordan Insurance Company for money said to have been stolen in 2013 from a Syrian bank (International Bank for Trade and Finance Ltd), because that payment would breach US sanctions on Syria.

AIG argues that the payment would be a prohibited transaction because it would have to involve US-based banks (the reinsurance contracts stipulate for claims and premiums to be paid in US dollars), constituting the supply of services from the US to Syria, or the receipt in Syria of the benefit of such services. Judgment awaited.