LLR Insurance & Reinsurance Dornoch LTD and Others V Westminster International BV and Others (The

INSURANCE AND REINSURANCE
[2010]
QBD (Admlty Ct)]
Dornoch Ltd v Westminster International
QUEENS BENCH DIVISION

(ADMIRALTY COURT)
1415, 1822 May, 35 June; 17 July 2009
DORNOCH LTD AND OTHERS

v
WESTMINSTER INTERNATIONAL BV AND
OTHERS
(THE WD FAIRWAY)
(NO 3)
[2009] EWHC 1782 (Admlty)
Before Mr Justice TOMLINSON
Insurance (marine) Vessel becoming constructive total loss Insurers rejecting notice
of abandonment but paying for constructive
total loss Vessel sold by assured to associated company at undervalue Insurers
thereafter asserting right of salvage
Whether insurers had opted to waive salvage
rights Law applicable to proprietary effects
of transfer Renvoi Insolvency Act 1986,
section 423.
In an earlier judgment, [2009] 2 Lloyds Rep
191, Phase 1 of the present proceedings, in which
the claimant insurers sought to overturn the sale
of a vessel by the first defendant to the fourth
defendant following payment by the insurers for
a total loss, Tomlinson J ruled on the meaning of
sections 62, 63 and 79 of the Marine Insurance
Act 1906. The present judgment, Phase 2, was
concerned with proprietary rights in the vessel.
The dredger WD Fairway was owned by Westminster International BV and was registered in
the Netherlands. The vessel, hull and machinery
were insured during 2007 in two layers. The
primary layer of up to 5 million was underwritten by seven insurance companies. The
excess layer of 145 million was written by the
15 claimants. On 8 March 2007 the vessel
became a constructive total loss. Notices of abandonment were served in March 2007 but were
declined. The vessel was towed to Thailand,
arriving in August 2007, where she remained.
Later in 2007 the primary layer paid for a constructive total loss. On 10 March 2008 the claimants accepted that the vessel was a constructive
total loss and paid an indemnity on the basis that
Net open market residual value of vessel to be
accounted to insurers, and they also paid
US$19.5 million to Yantai Salvage in respect of
a salvage and wreck removal claim. In December
2008 all of the claimants bar one and all of the
primary underwriters bar two, representing,
1
PART 1
respectively, 85 per cent and 77.5 per cent of the

market, expressly elected to take over the interest
of the assured in what remained of the subject
matter insured.
A dispute arose as to the valuation of the
wreck. The underwriters asserted that the wreck
was worth about 75 million, whereas the
assured said that the wreck was worth 25 million and they offered that sum to the underwriters
in August 2008. This offer was refused, as the
underwriters wished to put the vessel out to
global tender. On 9 January 2009 the assured
sold the vessel to Nigerian Westminster Dredging, an associated company, for 1,000. The purpose of the sale was to prevent the underwriters
from realising the open market value of the vessel. At the time of the sale the vessel was not
registered under any flag. The claimants sought
to overturn the sale. In the Phase 1 proceedings,
[2009] 2 Lloyds Rep 191, Tomlinson J held as
follows: the claimants were entitled to the value
of the vessel prior to the sale and they had an
equitable lien on the 1,000 proceeds of sale;
where a notice of abandonment had been rejected
but there had been subsequent payment for a
constructive total loss, insurers retained their
right to take over the subject matter under section
79(1) of the Marine Insurance Act 1906, but by
paying for a constructive total loss without exercising that option the insurers did not thereby
obtain an equitable lien over the vessel; the
claimants had not taken over the vessel by paying
the salvage and wreck removal claim; when, following payment, in December 2008, 85 per cent
of the claimants and 77.5 per cent of the primary
layer expressly elected to take over the vessel,
each electing insurer obtained a proportional part
of the vessel, so that the electing insurers became
co-owners with the assured in their respective
proportions and were entitled to have the appropriate number of whole shares transferred to
them to be registered in their name; and the
relevant system of law for determining the incidence of proprietary interests in the vessel prior
to, at the time of, and after the purported transfer
of the vessel to Nigerian Westminster Dredging
was the lex situs, which was Thai law.
The issues were as follows: (1) whether Thai
domestic law or Thai conflict of laws rules
should be applied; (2) whether the reservation
accounted to insurers amounted to a disclaimer
by the claimants of their right to take over the
vessel; (3) whether, under Thai law, the claimants acquired a proprietary interest in the vessel
before its sale to Nigeria; and (4) whether the
sale to Nigerian Westminster Dredging could be
LLOYDS LAW REPORTS

set aside under section 423 of the Insolvency Act
1986, which provides as follows:
423 Transactions defrauding creditors
(1) This section relates to transactions
entered into at an undervalue; and a person
enters into such a transaction with another
person if:
...
(c) he enters into a transaction with the
other for a consideration the value of which,
in money or moneys worth, is significantly
less than the value, in money or moneys
worth, of the consideration provided by
himself.
(2) Where a person has entered into such a
transaction, the court may, if satisfied under
the next subsection, make such order as it
thinks fit for:
(a) restoring the position to what it would
have been if the transaction had not been
entered into, and
(b) protecting the interests of persons
who are victims of the transaction.
(3) In the case of a person entering into such
a transaction, an order shall only be made if
the court is satisfied that it was entered into by
him for the purpose:
(a) of putting assets beyond the reach of a
person who is making, or may at some time
make, a claim against him, or
(b) of otherwise prejudicing the interests
of such a person in relation to the claim
which he is making or may make.
Held, by QBD (Admlty Ct) (TOMLINSON J), that Nigerian Westminster Dredging
would be ordered to transfer the vessel to the
claimants nominee, with a view to her sale.
(1) The reference to the lex situs, Thai law,
was to Thai domestic law and not to Thai private
international law rules. In English law the proprietary effects of a contractual transfer were governed by the lex situs. The rules of Thai private
international law were not dissimilar, and a Thai
court would apply Thai domestic law (see paras
5 to 7);
Glencore International AG v Metro
Trading International Inc [2001] 1 Lloyds Rep
284, applied.
(2) The reservation Net open market residual
value of vessel to be accounted to insurers did
not amount to an election by the claimants not to
exercise their right to take over the interest of the
assured in the vessel.
(a) The endorsement was to be read in context, and the communications which the par-
[2010]
[QBD (Admlty Ct)
ties exchanged before 10 March 2008 on the

topic of realisation of the value of the vessel
proceeded upon the basis that this would be
achieved in the normal way, ie by a cooperative arrangement whereby the assured would
either assist in facilitating the sale of the vessel
to a third party, often for scrap, or, if they
wished to retain the vessel, account for the
residual value to underwriters (see para 11).
(b) An insurer who had paid for a total loss
but who had elected not to exercise his entitlement under either section 63(1) or section
79(1) of the 1906 Act was not entitled to the
proceeds of sale. The entitlement of the insurer
could not be different whether the assured
repaired the vessel and retained it in his service or whether he sold it to a third party. In
either case the insurer had renounced any
interest in the residual value of the vessel. The
endorsement of 10 March 2008 was actually
inconsistent with an election not to take over
the interest of the assured in the vessel, but
was entirely consistent with the subsistence of
underwriters right to take over the vessel as
being the right underpinning the parties discussion as to how the residual value of the
vessel was to be realised, a right to which
resort was unlikely conventionally to be had
but which remained nonetheless in reserve
(see paras, 13, 14, 15 and 18);
Castellain v Preston (1883) 11 QBD
380, distinguished.
(c) An effective election had to be communicated to the other party. A document which
did not at the time lead the other party to
believe that a choice had been made was at the
very least unlikely to be, viewed objectively,
sufficiently clear and unequivocal to constitute
an election (see para 19);
Callaghan and Hedges v Thompson
[2000] Lloyds Rep IR 125, applied.
(d) The third defendant, Boskalis, was
estopped by convention from reliance upon the
endorsement as an election by underwriters
not to take over the vessel. The question of
estoppel was governed by English law, as the
question of substance under consideration was
whether the insurers exercised a right of election open to them as an incident of a contract
of insurance governed by English law. Reference to the law of the situs might have been
justified if some sort of proprietary estoppel
was in play but it was not. Applying English
law, there was a shared assumption that no
election had been made by the insurers to
disclaim their entitlement (see para 21).
[2010]
QBD (Admlty Ct)]
(3) Under Thai law the claimants did not

acquire a proprietary interest in the vessel prior
to its sale to Nigerian Westminster Dredging (see
para 50).
(4) The sale to Nigerian Westminster Dredging
could be set aside under section 423 of the Insolvency Act 1986
(a) Jurisdiction under section 423 was not
expressly made conditional upon a formal
insolvency (see para 126).
(b) The facts fell squarely within section
423. The transaction was at an undervalue.
The consideration given was trifling and at
best symbolic 1,000 in respect of a vessel
for which Boskalis had only recently offered
25 million. A purpose of Boskalis in entering
into the sale was to prejudice the interests of
underwriters in relation to their claim to be
entitled to assume ownership and possession
of the vessel and to sell her. Boskalis had the
like purpose in relation to the like claim which
they anticipated those underwriters who had
not yet elected would make. Although it was
not necessary to go that far, it would if necessary be held that Westminster International
had the purpose of putting the vessel beyond
the reach of underwriters. The underwriters
were plainly victims of the transaction. If it
stood, it prevented them from exercising their
contractual right to assume ownership and to
sell the vessel on the open market so as to
maximise recovery (see paras 129 and 130);
Inland Revenue Commissioners v
Hashmi [2002] 2 BCLC 489, applied.
(c) The jurisdiction under section 423 was
not subject to any territorial limitation. There
was a special need for care when exercising an
extra-territorial discretionary power, so there
had to be a sufficient connection to justify the
court setting in motion procedures over a body
which prima facie was beyond the limits of
territoriality. In the present case there was an
amply sufficient connection to justify the court
in exercising the jurisdiction. The excess policy was governed by English law and was
placed in the London market. It contained an
exclusive jurisdiction clause which made it
arguable that the underwriters were in fact
required to bring proceedings in England (see
para 132 and 135);
Re Real Estate Development Co
[1991] BCLC 210, Re Paramount Airways Ltd
[1993] Ch 223, Jyske Bank (Gibraltar) Ltd v
Spjeldnaes [1999] 2 BCLC 101, Banco Nacional de Cuba v Cosmos Trading Corporation
[2000] BCC 910, applied.
The following cases were referred to in the

judgment:
Bafunke Braithwaite v Folarin, 1938, West Africa
Court of Appeal;
Banco Nacional de Cuba v Cosmos Trading Corporation (CA) [2000] BCC 910;
Beazley v Horizon Offshore Contractors Inc [2005]
Lloyds Rep IR 231;
Brooks v MacDonnell (1835) 1 Y & C 500;
Callaghan and Hedges v Thompson [2000] Lloyds
Rep IR 125;
Castellain v Preston (CA) (1883) 11 QBD 380;
Chigbu v Tonimas [2006] 9 NWLR 189;
China National Foreign Trade Transportation Corporation v Evlogia Shipping Co SA of Panama
(The Mihalios Xilas) (HL) [1979] 2 Lloyds Rep
303;
Glencore International AG v Metro Trading International AG [2001] 1 Lloyds Rep 284;
Hardwick Game Farm v Suffolk Agricultural and
Poultry Producers Association Ltd (CA) [1966]
1 Lloyds Rep 197; [1966] 1 WLR 287;
Inland Revenue Commissioners v Hashmi (CA)
[2002] 2 BCLC 489;
Jyske Bank (Gibraltar) Ltd v Spjeldnaes (No 2)
[1999] 2 BCLC 101;
Kammins Ballrooms Co Ltd v Zenith Investments
(Torquay) Ltd (HL) [1971] AC 850;
Lawal v Ejidike [1997] 2 NWLR 317;
Lawal v Younan [1961] ANLR 257;
Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga)
[1990] 1 Lloyds Rep 391;
Paramount Airways Ltd, Re (No 2) (CA) [1993] Ch
223;
Peyman v Lanjani (CA) [1985] Ch 457;
Raleigh Industries v Nwaiwu [1994] 4 NWLR 761;
Real Estate Development Co, Re [1991] BCLC
210;
Scarf v Jardine (HL) (1882) 7 App Cas 345;
Sofolahan v Fowler [2002] 14 NWLR 664.
Iain Milligan QC, Guy Blackwood and David

Walsh, instructed by Stephenson Harwood, for the
claimants; Tom Weitzman QC and Peter Macdonald Eggers, instructed by Nabarro LLP, for the
first, second and third defendants; Jonathan Gaisman QC and Patricia Edwards, instructed by Pinsent Masons, for the fourth defendant.
Friday, 17 July 2009
LLOYDS LAW REPORTS
4
TOMLINSON J]

JUDGMENT
Mr Justice TOMLINSON:
1. On 29 April 2009 I delivered my judgment on
what have been described as the Phase 1 issues. I
shall refer to that judgment, [2009] 2 Lloyds Rep
191 as the Phase 1 judgment. This second judgment
is to be read with and in the light of the Phase 1
judgment. I do not propose to lengthen this judgment by repeating the introductory passages in the
Phase 1 judgment which outline the dispute
between the parties. I will have to add some narrative, and to make some findings of fact additional to
those facts which were agreed for the purposes of
the first hearing. The facts agreed for the first hearing are in any event uncontroversial.
2. In the Phase 1 judgment I recorded that the
insured value of the vessel WD Fairway for hull
and machinery was 73.5 million. There was an
interval of very nearly one year between the tender
of notice of abandonment on 27 March 2007 and
underwriters accepting that the vessel was a constructive total loss, hereinafter CTL. That is
because it was not until 10 March 2008 that underwriters were prepared to accept that the cost of
repairing the damage would exceed the relevant
agreed value, 73.5 million. Boskalis, by which I
intend a compendious reference to the Boskalis
Group, is critical of underwriters in this regard, and
says that they acted unreasonably in not earlier
agreeing that the vessel was a CTL and making
payment accordingly. I do not have to decide
whether that criticism is well-founded, and no argument has been directed specifically to that issue. I
express no view on the issue, not least because
Boskalis has launched separate proceedings against
underwriters with a view to the recovery of interest
and/or damages consequent upon what it characterises as underwriters unreasonable conduct. I
should however record that as a result of the time
spent in resolving the question whether the vessel
was a CTL on the figures Boskalis formed the view,
rightly or wrongly, that underwriters had adopted
an entrenched position in reliance upon advice
which was unreliable in that it came from those
who were not acknowledged experts in the field
and/or had been commissioned upon an inappropriate and misconceived basis: see for example the
email of 29 August 2008 from Mr Oscar Bus, Head
of Insurance at Boskalis to its brokers Marsh. Boskalis found this frustrating. Once the question of the
realisation of the residual value of the vessel
became an issue between the parties, Boskalis
believed that underwriters were again basing themselves upon advice from an inappropriately qualified source, in this case Mr Geoff Webster of Vener
Marine in the United States. Boskalis was in my
view wrong to regard Mr Websters experience as
[2010]
[QBD (Admlty Ct)
irrelevant to the valuation of WD Fairway. However that may be, it is crucial to a proper understanding of the events with which I am concerned
that Boskalis felt aggrieved in consequence of
underwriters handling of its claim for a CTL and
felt that history was repeating itself in underwriters
approach to the realisation of the residual value of
the vessel following payment for the CTL.
3. I should also record that the total outlay of the
underwriters with whom I am concerned was 150
million, comprising 5 million on the primary
layer, 68.5 million excess of 5 million on the
excess hull and machinery cover, 18.375 million
on the excess policy for Outfit and/or Disbursements and 58.125 million for the excess layer
section B Interest Whatsoever.
Renvoi
4. Before proceeding further I propose first to
determine an issue which I left not conclusively
resolved in para 89 of the Phase 1 judgment. It is
agreed between the parties that at first instance the
relevant system or systems of law for determining
the incidence of proprietary interests in the vessel
prior to, at the time of, and after the purported
transfer of the vessel to the fourth defendant must
be held to be the lex situs. I have determined that at
all relevant times the lex situs was Thai law. Without evidence as to the content of the lex situs, I was
unprepared to give a definitive answer to the question whether reference to the lex situs in this context
includes or excludes reference to the private international law rules, if any, of that system of law. My
provisional answer was that reference to the domestic law of the situs is alone permissible. I am now in
a position to confirm that answer. There is no principle in Thai private international law application of
which will better serve the object of the English
conflict rule than will application of Thai domestic
law. The question is however academic. If the Thai
rule of private international law were to be applied,
a Thai court would nonetheless apply Thai domestic law to determine the incidence of proprietary
interests in the vessel.
5. On the question of principle, Mr Iain Milligan
QC for underwriters argued that there should be
recognised an exception to the general rule which I
provisionally embraced at para 89 of the Phase 1
judgment. As I understood the argument, it was to
the effect that where the lex situs recognises transfer of property by contract alone, as opposed to, for
example, imposing as a requirement for the efficacy
of a transfer the completion of physical delivery or
the effecting of registration, and where the contract
in question is governed by a law other than that of
the situs, the English court should apply the conflict
rule of the lex situs in order to determine the question whether a contractual transfer of property was
[2010]
QBD (Admlty Ct)]

in fact achieved. On reflection I am not sure that

this point is open to Mr Milligan in the light of the
concession at Phase 1 and the very limited terms in
which I left the point open at para 89 of the Phase
1 judgment. However that may be the argument is,
if I have correctly understood it, in my view misconceived. Since I consider that the point is in any
event academic, in view of my findings as to the
content of Thai law, I do not propose to deal with it
at length. It suffices to say that I agree with Mr
Jonathan Gaisman QC for Nigerian Westminster
that the argument confuses or at any rate appears to
confuse the contractual effects of a transfer, or of a
transaction said to confer a legal or beneficial title,
with the proprietary effects of the transfer or transaction see Dicey, Morris and Collins on the
Conflict of Laws, 14th Edition, at para 24-006. I
respectfully agree with the analysis of Moore-Bick
J in Glencore International AG v Metro Trading
International Inc [2001] 1 Lloyds Rep 284 at
pages 290 to 295, paras 14 to 32 of his judgment.
Moore-Bick J held that the proprietary effects of a
contractual transfer are governed by the lex situs,
even in a dispute between only the contracting
parties. Moore-Bick J adopted a well-known dictum of Diplock LJ in Hardwick Game Farm v
Suffolk Agricultural and Poultry Producers Association [1966] 1 Lloyds Rep 197, page 236 col 1;
[1966] 1 WLR 287, page 330:
. . . The proper law governing the transfer of
corporeal moveable property is the lex situs. A
contract made in England and governed by English law for the sale of specific goods situated in
Germany, although it would be effective to pass
the property in the goods at the moment the
contract was made if the goods were situate in
England, would not have that effect if under
German law (as I believe to be the case) delivery
of the goods was required in order to transfer the
property in them.
As Mr Gaisman trenchantly put it, resort is only
had to the lex situs because the court is concerned
with proprietary rights. If the court were concerned
only with contractual rights, resort would not be
had to the lex situs at all. The proposed exception to
the general rule is therefore on analysis somewhat
illusory, since it presupposes, wrongly, that the
court is here relevantly concerned with contractual
rights.
6. As to Thai private international law, on examination the relevant rules are not dissimilar to those
in English private international law. The Act on
Conflict of Laws, BE 2481 (1938) provides:
DIVISION III Obligations
Section 13. The question as to what law is
applicable in regard to the essential elements or
effects of a contract is determined by the inten-
5
[TOMLINSON J
tion of the parties to it. If such intention, express

or implied, cannot be ascertained, the law applicable is the law common to the parties when they
are of the same nationality, or, if they are not of
the same nationality, the law of the place where
the contract has been made.
When the contract is made between persons at
a distance, the place where the contract is
deemed to have been made is the place where
notice of acceptance reaches the offeror. If such
place cannot be ascertained the law of the place
where the contract is to be performed shall
govern.
A contract shall not be void when made in
accordance with the form prescribed by the law
which governs the effects of such contract.
...
DIVISION IV Things
Section 16. Moveable and immoveable property is governed by the law of the place where the
property is situated.
However, in case of exportation of moveable
property, the law of nationality of its owner shall
govern from the time of exportation.
7. Before the hearing it appeared to be common
ground that a Thai court would apply Thai domestic
law to determine the two distinct questions:
(i) the accrual of proprietary rights in the vessel by virtue of the dealings between the owners
and the underwriters whilst the vessel lay at
Sattahip; and
(ii) the proprietary effect of the memorandum
of agreement, hereinafter MOA of 9 January
2009 agreed between Westminster International
BV and Nigerian Westminster Dredging and
Marine Ltd, the proper law of which is by
express choice Nigerian.
This was, in the opinion of the claimants expert
witness on Thai law Mr Wutipong, the effect of
section 16 of the Conflict of Laws Act. After the
hearing had begun the two experts on Thai law
produced a joint memorandum which incorporated
also certain additional comments of Mr Wutipong.
Mr Wutipong attempted to resile from his earlier
views, saying that the relevant paragraphs of his
report referred to a situation independent of any
contractual agreement. In his subsequent oral evidence he attempted to maintain this line, but unconvincingly. The relevant passages in his first report,
paras 18 to 21 and 105 to 108(c) contained no such
reservation which would in any event be wholly
contrary to the sense of the latter group of paragraphs in which a clear distinction was drawn
between a dispute between the two parties to the
MOA arising out of the contract and a consideration
6
TOMLINSON J]
LLOYDS LAW REPORTS

of the proprietary effects of the contract. The evidence of Mr Chamnian, the expert on Thai law
called by the Boskalis interests, was to the effect
that in situations such as the present where there is
an overlap between contractual and proprietary
rights and thus superficially between sections 13
and 16, which is what I think he meant by some
ambiguous between section 13 and section 16, in
an examination of the proprietary effect of a contract the Thai court will apply the choice of law rule
contained in section 16 of the Act on Conflict of
Laws. I accept Mr Chamnians evidence, not least
because it accords with Mr Wutipongs first
thoughts but also because his evidence demonstrated a clear awareness of the significance of the
distinction upon which he was being asked to focus.
By contrast Mr Wutipongs evidence on this point
was confused and unconvincing. Indeed, I am constrained to agree with Mr Gaisman that Mr Wutipongs second thoughts on this issue bore an
uncanny resemblance to the unorthodox submissions made by Mr Milligan at the hearing as to the
approach of English private international law to the
overlap between contractual and proprietary
issues.
8. It follows that the relevant system of law for
determining the incidence of proprietary interests in
the vessel prior to, at the time of and after the
purported transfer of the vessel to Nigerian Westminster, the fourth defendant, is the domestic law of
Thailand.
9. Before turning to the content of that law I
propose next to consider the effect of the endorsement of 10 March 2008 made by Mr Tony Kersey
of Royal and Sun Alliance, hereinafter RSA, on
the brokers claim settlement documents. I referred
to this endorsement at para 20(3) of the Phase 1
judgment but for ease of reference I set it out here
again:
Agree settle CTL claim on the basis that there
are no circumstances known to the assured that
may prejudice cover or may otherwise affect the
claim, such payment is made without prejudice
to this reservation.
accounted to insurers.
It is the effect of the second sentence of this
endorsement which is under consideration. Mr Tom
Weitzman QC for Boskalis contends that by the
endorsement the excess underwriters elected not to
exercise their right to take over the interest of the
assured in the vessel, the right conferred by a combination of payment for a CTL and the first limb of
section 79(1) of the Marine Insurance Act 1906,
hereinafter the MIA. Mr Milligan contends that the
endorsement does not have this effect but that if it
does Boskalis is estopped by convention from so
[2010]
[QBD (Admlty Ct)
contending. This in turn raises an issue by reference

to which system of law it should be determined
whether such an estoppel operates.
10. RSA was identified in the excess policy as
the slip leader. The leading Lloyds syndicate on
the policy was XL, Syndicate 1209, represented for
present purposes by Mr Steve Hill. It is common
ground that whilst the claims settlement forms
signed by Mr Hill on 10 March 2008 did not bear
any similar endorsement to that placed by Mr Kersey, Mr Hill had told Mr Street of the brokers
Marsh on the previous Friday, 7 March, that he
would be in agreement with and adopt the endorsement which would be signed by RSA. The policy
identifies Lloyds Syndicate XL 1209 under the
rubric: OTHER AGREEMENT PARTIES FOR
CONTRACT CHANGES, IF ANY. Furthermore
the excess policy provides:
CLAIMS AGREEMENT PARTIES
Claims to be agreed by the slip leader hereon
and X-changing Claims Services and such agreement to be binding on all underwriters.
BASIS OF CLAIMS AGREEMENT
Claims to be managed in accordance with
Lloyds 2006 Claims Scheme and International
Underwriting Association claims agreement
practices. Underwriters hereon agree to follow in
all respects the claims handling arrangements
and decisions made by the Underlying First Loss
Policy led by Fortis Corporate Insurance NV
(Policy No 7048726C0015). However, underwriters hereon are not bound to follow for their
own proportions any claim settlement agreement
made by the Underlying First Loss Policy led by
Fortis Corporate Insurance NV . . . without
prior consultation and approval by the two leading underwriters hereon.
I do not consider that these provisions have the
effect that the slip leader RSA and X-Changing
Claims Services (the successor to Lloyds Claims
Office) or the two leading underwriters, the relevant
representatives of RSA and XL, could bind the
following market to an election not to take over the
interest of the assured in the vessel after payment as
for a CTL. An election of that nature, which for the
reasons discussed hereafter would be most unusual
if not in my view extraordinary, goes beyond what
is normally inherent in a claim settlement agreement. Indeed it seems to me that if I were to accept
the argument of Boskalis as to the effect of the
terms of the policy in this regard, but to conclude
that as a matter of construction of the endorsement
no election was made, it would have to follow that
the subsequent election of 5 December 2008 to
which I refer at para 19(11) of the Phase 1 judgment
bound the entire following market. That is not a
[2010]
QBD (Admlty Ct)]

conclusion for which anyone contends.1 For allied

reasons it seems to me very difficult to conclude
that each of the subscribing underwriters comprising the following market associated themselves
with or impliedly adopted the endorsement. Mr
Walker of X-Changing, representing the Lloyds
market, was copied in on an email which Mr Kersey sent to Mr Street on 7 March confirming that
RSA, as leaders, were in agreement, subject to an
unparticularised endorsement wording, to their proportion of the balance of the CTL claim. On 11
March Mr Walker countersigned the claim settlement form which had been signed by Mr Hill the
previous day, but there is no suggestion that he saw
the RSA endorsement or that he ever indicated an
agreement to be bound by it. A copy of Mr Kerseys endorsement was sent to the remaining subscribing underwriters whose settlements had to be
processed individually, by which phrase in his
witness statement I understand Mr Street to mean
the remaining company market. Mr Street was not
required to attend for cross-examination at the hearing, his expression of his subjective belief that all
subscribing underwriters had agreed to Mr Kerseys
endorsement being irrelevant. I agree however with
Mr Milligan that the subsequent payment by the
company underwriters of their proportion of the
CTL is equivocal. It cannot without more be
regarded as an acceptance of the endorsement.
11. However I do not consider that the endorsement communicates an election by RSA not to
exercise their right to take over the assureds interest in the vessel. It is common ground that the
endorsement must be read in context, that the context includes preceding communications between
the parties and that the approach, both to construction of the endorsement itself and as to an appreciation of what was conveyed in the preceding
exchanges, is objective. The communications
which the parties exchanged before 10 March 2008
on the topic of realisation of the value of the vessel
proceeded upon the basis, as it seems to me, that
this would be achieved in the normal way, ie by a
cooperative arrangement whereby the assured
would either assist in facilitating the sale of the
vessel to a third party, often for scrap, or, if they
wished to retain the vessel, account for the residual
value to underwriters. Underpinning that conventional approach is the assumption that underwriters
are entitled on payment for a CTL to take over the
assureds interest in the vessel and dispose of it as
they see fit but that ordinarily by cooperative
arrangement they will be relieved of the need
1 On 9 December 2008 Mr Street pointed out to Boskalis that the election
of 5 December 2008 was apparently made only on behalf of some but not all
underwriters. He also pointed out that Mr Kersey had stated many times
during handling of the claim and especially in relation to the sale of wreck
process that he could not simply invoke the follow clause to bind other
insurers without consultation.
7
[TOMLINSON J
actually to exercise that entitlement. That this is the

normal approach is borne out by the unchallenged
evidence of Mr Kersey. Underlying that approach is
a proper appreciation of the effect of the MIA 1906,
in the light of which the objective import of the
parties relevant communications should of course
be ascertained. Mr Kersey referred without challenge to the process of negotiation which occurs
where the vessel is not sold to a third party as
involving the assured offering to buy the vessel
back from underwriters. Obviously this description of the process is technically incorrect in the
paradigm situation where underwriters have not
elected to take over the assureds interest in the
vessel. It reflects however the underlying understanding of properly informed persons in the market
that that is underwriters entitlement. Hence the
expression buy the vessel back from underwriters
omits a stage in the process which all understand or
must be taken to understand it is open to underwriters to initiate but which by cooperation will
ordinarily be rendered unnecessary.
12. I do not propose to set out in extenso the
exchanges which preceded the 10 March 2008
endorsement but they are in my judgment consistent with the foregoing understanding. It is in this
light for example that one must understand RSAs
otherwise oddly expressed request of Boskalis of 29
February 2008 for confirmation if it is the intention to retain possession of the vessel after payment
of the CTL, in which case what are the assureds
proposals for accounting to underwriters for her
true market value?. In the same message underwriters also said this:
As you will appreciate the main issues outstanding relate to the residual value of the vessel.
Given the nature of this loss and the specialised
nature of the vessel, the residual value is unlikely
to be a simple scrap value. For this reason, details
of the wreck and decisions as to how the value
remaining therein is to be released to underwriters benefit is obviously a key issue, especially given the difficulties faced with any
recovery in the USA. For Underwriters, this is
not an ancillary issue and they consider that there
should be no reason why these matters cannot be
taken forward without further delay, especially in
the light of lead Underwriters decision. It must
be accepted that cooperation in this regard will
undoubtedly expedite actual settlement under the
policy.
In part this message reflected the practice, of
which Mr Kersey speaks, whereby if the assured
wishes to retain the vessel and both parties agree, it
is sometimes possible to deduct the agreed purchase
price from the amount to be paid in respect of the
CTL. By message of 5 March 2008 underwriters
said this:
8
TOMLINSON J]
LLOYDS LAW REPORTS

It will come as no surprise to Boskalis that,

given the high sound market value of this vessel,
potential cost of repairs and considerable third
party interest, leading Underwriters will be
expected to look at all options regarding the
disposal/sale of the wreck. Underwriters look
forward to confirmation that they and Boskalis
can move this matter forward together with full
cooperation.
13. In the light of this background it would have
been unexpected and probably perverse had underwriters on 10 March 2008 irrevocably elected not to
take over the interest of the assured in the vessel,
since in the absence of agreement taking over the
vessel represented the only method whereby underwriters could control the means whereby the value
remaining in the vessel was realised. Given the
difficulties which had so far attended resolution of
the claim for a CTL, the inevitable strain in the
relationship between the parties amounting to a
palpable lack of confidence the one in the other, and
the express desire of underwriters to progress the
discussion of this issue before final agreement of
and payment for a CTL, it would in my judgment
have been doubly unexpected that underwriters
would abandon so valuable indeed so critical an
entitlement. Without it, they would lose all control
over the process of realisation of the value in the
wreck.
14. Indeed Mr Milligan goes further and contends that without the entitlement under the first
limb of section 79(1) of the MIA 1906 the underwriters would not in fact be entitled to the residual
value of the vessel. This raises the point which I
discussed at paras 30 and 54 of the Phase 1 judgment but on which I then heard no argument. It did
not then seem to me obvious that an insurer who
has not exercised his election under either section
63(1) or section 79(1) is entitled to the net open
market residual value of an as yet unsold vessel in
respect of which he has paid as for a CTL. It seems
to me still less obvious that an underwriter who has
expressly elected not to exercise his entitlement
under either section 63(1) or section 79(1) is entitled to the proceeds of sale of the wreck. As I
speculated at para 30 of the Phase 1 judgment he
might, Mr Weitzman contended at the Phase 2 hearing that in the latter case underwriters entitlement
to the sale proceeds derives from their rights of
subrogation acquired on payment for a CTL pursuant to the second limb of section 79(1).
15. I do not consider that Mr Weitzman is correct
in this submission. Firstly, it is counter-intuitive. As
Mr Milligan put it, if the underwriter says to the
assured, without more, I do not want the ship then
the ship remains in the ownership of the assured. It
seems to me as a matter of principle that the further
entitlement of the insurer in those circumstances
[2010]
[QBD (Admlty Ct)
cannot be different whether the assured repairs the

vessel and retains it in his service or whether he
sells it to a third party. In either case the underwriter
has renounced any interest in the residual value of
the vessel.
16. Mr Weitzman perhaps not unnaturally relied
upon Castellain v Preston (1883) 11 QBD 380. In
particular he relied upon Brett LJs well-known
statement at page 386:
The very foundation, in my opinion, of every
rule which has been applied to insurance law is
this, namely, that the contract of insurance contained in a marine or fire policy is a contract of
indemnity, and of indemnity only, and that this
contract means that the assured, in case of a loss
against which the policy has been made, shall be
fully indemnified, but shall never be more than
fully indemnified. That is the fundamental principle of insurance, and if ever a proposition is
brought forward which is at variance with it, that
is to say, which either will prevent the assured
from obtaining a full indemnity, or which will
give to the assured more than a full indemnity,
that proposition must certainly be wrong.
Mr Weitzman also relied upon the following passage at page 388:
In order to apply the doctrine of subrogation, it
seems to me that the full and absolute meaning of
the word must be used, that is to say, the insurer
must be placed in the position of the assured.
Now it seems to me that in order to carry out the
fundamental rule of insurance law, this doctrine
of subrogation must be carried to the extent
which I am now about to endeavour to express,
namely, that as between the underwriter and the
assured the underwriter is entitled to the advantage of every right of the assured, whether such
right consists in contract, fulfilled or unfulfilled,
or in remedy for tort capable of being insisted on
or already insisted on, or in any other right,
whether by way of condition or otherwise, legal
or equitable, which can be, or has been exercised
or has accrued, and whether such right could or
could not be enforced by the insurer in the name
of the assured by the exercise or acquiring of
which right or condition the loss against which
the assured is insured, can be, or has been diminished. That seems to me to put this doctrine of
subrogation in the largest possible form, and if in
that form, large as it is, it is short of fulfilling that
which is the fundamental condition, I must have
omitted to state something which ought to have
been stated. But it will be observed that I use the
words of every right of the assured. I think that
the rule does require that limit.
However I do not consider that these passages
assist. Castellain v Preston was a case where a
[2010]
QBD (Admlty Ct)]

house suffered damage by fire in the interval

between contract and conveyance. The vendor
recovered from his fire insurers in respect of the
damage and the sale was subsequently completed,
with no abatement of the price to reflect the fire
damage. Underwriters were held entitled to recover
from their assured vendor a sum equal to the insurance money which they had paid out. The right to
enforce the sale was of course a right which subsisted as at the date of the fire. However the case
does not decide that if, subsequent to being indemnified for fire damage, an owner of insured property
manages to sell it at a price which does not apparently reflect a discount to reflect the damage, the
owner must account to the insurer for a sum equal
to the insurance recovery. Except in the wider sense
that at the time of the fire the insured has the right
to sell his property, he at that stage has no legal or
equitable right to which the insurer could be subrogated. Furthermore I do not consider that resort to
the principle of indemnity assists. On the hypothesis under discussion, express disclaimer by underwriters of their right to take over the assureds
interests in the vessel, it is as a result of underwriters express choice that the insured potentially
receives more than an indemnity.
17. It follows that I agree with Mr Milligan that
had underwriters elected not to take over the interests of the assured in the vessel they would not,
without more, have been entitled to the residual
value of the vessel. That appears also to be the view
of the learned editors of Arnoulds Law of Marine
Insurance and Average, 17th Edition. At para
3032 there appears the following:
. . . But the underwriter, by not accepting the
abandonment, or by other acts of the like kind,
may lose all title to the ultimate benefit of salvage. In Brooks v MacDonnell [(1835) 1 Y & C
500] a British ship and cargo were captured by
the Brazilian Government, and condemned as
prize for breach of blockade. The underwriters
who had insured the cargo would not accept an
abandonment, but compromised the claim for 35
per cent. Some time afterwards restitution and
compensation were made by the Brazilian Government, and in an action by the insurers to
obtain the benefit of this the court held that they
were not entitled to anything.
Brooks v MacDonnell does not really assist since
abandonment was rejected and the claim for a CTL
settled by a payment of 35 per cent, on payment of
which the policy was to be delivered up for cancellation. It was inherent in the settlement that the
underwriters disclaimed any further interest in the
insured property. Nonetheless I take comfort from
the tentative view of the editors of Arnould that an
insurer may, by not accepting abandonment, lose all
title to the ultimate benefit of salvage. For the
9
[TOMLINSON J
avoidance of doubt, I do not consider that this can

ordinarily occur absent an express disclaimer by
underwriters of their entitlement.
18. If this is right, the endorsement of 10 March
2008 is actually inconsistent with an election not to
take over the interest of the assured in the vessel.
Even if it is not right, the endorsement is, in my
view, objectively construed against the relevant
background, entirely consistent with the subsistence of underwriters right to take over the vessel
as being the right underpinning the parties discussion as to how the residual value of the vessel was
to be realised, a right to which resort was unlikely
conventionally to be had but which remained nonetheless in reserve. Even if that approach is thought
to be wrong, the endorsement is in my view at the
very least equally consistent with the subsistence of
the underwriters right to take over the vessel as it
is with underwriters having elected not to take over
the vessel. Given the background which I have
described, the fact that in the event underwriters
take over a vessel and sell it themselves, this would
not involve the insured accounting to underwriters
for the net residual value, is neither here nor there.
The objective understanding is that the insured will
account to underwriters for the net residual value
precisely because if they do not the underwriters
will exercise their entitlement to realise that value
themselves. Accounting to insurers for the net
residual value of the vessel is therefore synonymous with buying the vessel back from underwriters. Use of either expression is in this context
consistent with and indeed posited upon underwriters having a subsisting right to take over the
vessel.
19. I am glad to be able to come to this conclusion because it is apparent that it occurred to no one
prior to February 2009 that the endorsement of 10
March 2008 amounted to an election by underwriters not to exercise their right to take over the
vessel. On the first day of the Phase 1 hearing I
raised with Mr Milligan, without reference to the
endorsement on which I had not by then focused,
the theoretical possibility that underwriters might,
when paying for a CTL, couple their payment with
an express disclaimer of their rights of election
under sections 63(1) and 79(1). Unsurprisingly Mr
Milligan accepted that in such circumstances the
assured would be at liberty thereafter to sell the
vessel. Later on the same day Mr Weitzman raised
for the first time the point that it can be argued, it
might be argued, it may be argued that the
endorsement is inconsistent with any election to
take over the vessel or with any reservation of any
right to make an election to take over the vessel
see transcript, day 1, pages 5 and 64. Mr Weitzman
raised the point as one which Boskalis may be
10
TOMLINSON J]
LLOYDS LAW REPORTS

raising. On the following day the point was formally reserved, Boskalis wishing particularly to
make enquiries of their broker Mr Street. Neither
Mr Street nor anyone from Boskalis has ever suggested that at the time they understood the endorsement to have the effect for which Mr Weitzman
now contends. That is a telling point against the
endorsement on its proper construction amounting
to an election by underwriters not to take over the
vessel. Indeed one can go further. As David Steel J
pointed out in Callaghan and Hedges v Thompson
[2000] Lloyds Rep IR 125 at page 134, an effective election requires that it be communicated to the
opponent party. A document which does not at the
time lead the opponent party to believe that a choice
has been made is at the very least unlikely to be,
objectively viewed, sufficiently clear and unequivocal to constitute an election and in the light of the
authorities there cited by David Steel J is in any
event ineffective simply because it does not cause
the opponent party to understand that a choice has
been made. See in particular the passages cited
from Scarf v Jardine (1882) 7 App Cas 345; Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850; China National Foreign
Trade Transportation Corporation v Evlogia Shipping Co SA of Panama (The Mihalios Xilas) [1979]
2 Lloyds Rep 303; Peyman v Lanjani [1985] Ch
457 and Motor Oil Hellas (Corinth) Refineries SA v
Shipping Corporation of India (The Kanchenjunga)
[1990] 1 Lloyds Rep 391.
20. In the circumstances I have no need to consider whether Boskalis is estopped by convention
from reliance upon the endorsement as an election
by underwriters not to take over the vessel. Since
the position emerges from the documents an appellate court will be as well placed as me to form a
view on this point, should it arise, and I propose
therefore to express my conclusion quite shortly.
The case for an estoppel by convention is in my
view quite overwhelming.
21. Dicey, Morris and Collins, rule 17
provides:
All matters of procedure are governed by the
domestic law of the country to which the court
wherein any legal proceedings are taken belongs
(lex fori).
The commentary on this rule includes, at para
7-031, the following:
Estoppel. For the purposes of English domestic law, estoppel is sometimes said to be a rule of
evidence. Whether, for the purpose of this Rule,
it should be regarded as a rule of substance or as
a rule of procedure is an entirely open question,
the answer to which may well vary with the type
of estoppel under consideration. Thus the question whether a principal is estopped from deny-
[2010]
[QBD (Admlty Ct)
ing the agents authority to deal with a third party

probably depends on the lex causae. On the other
hand, the question precisely when an estoppel by
record arises probably depends on the lex fori,
although, of course that law may distinguish for
this purpose between the effect of foreign and
domestic judgments.
Mr Weitzman submits that the question is here
governed by Thai law. It is common ground that
there is no Thai doctrine of or equivalent to estoppel. However I can see no basis whatever for this
submission. Even if the question is one of substance, the question of substance under consideration is the question whether the insurers exercised a
right of election open to them as an incident of a
contract of insurance governed by English law. Reference to the law of the situs might be justified if
some sort of proprietary estoppel were in play but it
is not.
22. It is common ground that in order to establish
an estoppel by convention in English law the claimants must prove to the satisfaction of the court
that:
(i) The claimants and Boskalis acted on the
basis of a shared assumption as to facts or law.
(ii) The assumption has been communicated
between them.
(iii) The claimants and Boskalis should have
had the objective intention that the alleged
assumption would be binding on the parties in
their legal relationship and on that basis have
regulated their subsequent dealings.
(iv) It would be unfair to the claimants for
Boskalis to resile from the agreed assumption.
The only gloss I would add is that, as Mr Milligan in my judgment correctly submitted, it is the
shared assumption which is apparent objectively
from the parties communications which is under
consideration, not their subjective intentions,
although the two will usually coincide, as here they
did. Mr Bus was aware in general terms of underwriters right to elect to take over the vessel and he
did not suggest that he understood the endorsement
of 10 March 2008 to have the effect that underwriters had disclaimed that right. Manifestly no
subscribing underwriter thought that he had disclaimed the right to take over the vessel. As to the
communication of the assumption, it is sufficient to
refer at this point to two matters only which clearly
establish a shared assumption that no election had
been made by underwriters to disclaim their entitlement. I refer hereafter en passant to several other
communications which show quite unequivocally
the shared assumption underlying the ongoing discussion. Perhaps most clearly of all, on 25 August
2008 Boskalis told underwriters that they would
be prepared to consider buying back the wreck for
[2010]
QBD (Admlty Ct)]

25 million. In the light of my earlier discussion

about the significance of the use of this expression
this speaks for itself. So too does underwriters
message to Boskalis of 11 June 2008 to the following effect:
Underwriters are obviously giving serious and
urgent consideration to taking over possession
and ownership of the vessel. Again, their rights
are fully reserved in this regard.
23. In truth the correspondence is replete with
communications of the shared assumption. Plainly
the parties had the objective intention that the
shared assumption would be binding on them in
their legal relationship and they regulated their
dealings accordingly. The negotiations between
March/April 2008 and September 2008 proceeded
upon the basis of the underlying understanding that
the underwriters retained the right at the end of the
day to take over ownership of the vessel. Finally, it
would be manifestly unfair to underwriters to allow
Boskalis now to resile from the shared assumption.
It is obvious that had Boskalis taken the point at an
early stage that an election had been made on 10
March 2008 the subsequent history would have
taken a very different course and these proceedings
would have assumed a very different shape. The
point would have been quickly resolved one way or
another and much expenditure avoided.
Did the claimants acquire a proprietary interest
in the vessel prior to 9 January 2009?
24. It is common ground that before me this
question is to be determined by reference to the lex
situs. That I have held means here the domestic law
of Thailand. I have already dealt in my Phase 1
judgment with what would be the position were the
question governed by English law. It is also conceded that, before me, any claim against the fourth
defendant founded solely on a beneficial interest
would be governed by Thai law, as the lex situs, by
virtue of para (d) of article 11 of the Hague Convention on the Recognition of Trusts as scheduled
to the Recognition of Trusts Act 1987. It is common
ground that, as a matter of Dutch law, should that
ever be regarded as governing the question of
acquisition of proprietary interests, the underwriters
would have acquired no proprietary interest in the
vessel prior to the de-registration of the vessel from
the Dutch Registry of Shipping on 9 January
2009.
Did the claimants acquire a proprietary interest
in the vessel prior to 9 January 2009 under Thai
law?
25. By the end of the case the claimants were, as
I understood it, contending for the acquisition of a
11
[TOMLINSON J
proprietary interest in the vessel by two distinct

routes said to be afforded by the provisions of Thai
law. The first route involved application by the
Thai court of the English MIA 1906 as part of Thai
domestic law. It was highly contentious between
the parties whether the MIA 1906 should be
regarded as part of Thai domestic law. However the
claimants need to go further this argument also
involved that the Thai court would recognise and
apply any proprietary rights which English law
would regard as created by its general law in order
to give proprietary support and effect to the statutory rights conferred on insurers by the MIA under
sections 63 and 79. This is an ambitious endeavour
since the relevant concepts are virtually unknown in
Thai law. The second route involved resort directly
to a provision of the Thai Code, which it was said
provides, in effect, that on payment for a total loss
an insurer acquires legal title to the subject matter
insured. In opening as I understood them the claimants seemed to couple this with reliance upon provisions of English law as importing a right of election
in underwriters. By the end of the argument the
claimants had I think abandoned this latter
approach possibly because they recognised that
it involved reliance upon a renvoi said to be the
consequence of the application of Thai rules of
private international law. I must examine each route
in turn.
26. The Thai Civil and Commercial Code, hereinafter TCCC, is divided into six Books: Book I,
General Principles; Book II, Obligations; Book III,
Specific Contracts; Book IV, Property; Book V,
Family and Book VI, Succession. Reference was
principally made to provisions in Books I, II and
III. Title XX of Book III deals with insurance.
27. Book I, section 4 of the TCCC sets out a
fundamental four tier order of priority that is
applied when civil and commercial cases are
decided under Thai law. It provides as follows:
The law must be applied in all cases which
come within the letter or the spirit of any of its
provisions.
Where no provision is applicable, the case
shall be decided according to the local custom.
If there is no such custom, the case shall be
decided by analogy to the provision most nearly
applicable, and, in default of such provision, by
the general principles of law.
28. The two experts in Thai law were agreed on
the following propositions:
(i) If there is a provision of Thai law that
addresses a disputed issue in a case, that provision of Thai law decides the issue, and there is no
need to look further to the next three tiers, local
custom, analogous provisions of Thai law and
general principles of law. In other words, when
12
TOMLINSON J]
LLOYDS LAW REPORTS

there are provisions of Thai law that decide an

issue, the inquiry ends with those provisions of
Thai law, and the other three tiers mentioned in
TCCC are irrelevant.
(ii) General principles of law is the last of
the four tiers in the order of priority. This means
that general principles of law are only relevant
when: (1) the letter or spirit of Thai law cannot
be used to decide an issue; (2) there is no local
custom that can be used to decide an issue; and
(3) there is no analogous provision of Thai law
that can be used to decide an issue. Under Thai
law, there is no need to make an enquiry into or
apply general principles of law if a case can be
decided by employing any of the first three tiers
of TCCC section 4.
(iii) Because general principles of law are
not part of the corpus of Thai law, Thai courts do
not have to apply general principles of law.
Indeed, Thai courts should not adopt foreign
principles of law when contrary to the principles
of the Thai system of law. Dr Kittisak Prokati, a
Professor of Law at one of Thailands leading
universities, Thammasat University, wrote in an
article called General Principles of Application
and Interpretation of Law that: principles of
foreign law to be applied as a general principle of
law must not be contrary to the general principles
in the Thai legal system. This particular rule on
the application of foreign law as a general principle of law has been followed by the Thai
Supreme Court on numerous occasions, including where reference to the English Marine Insurance Act of 1906 was made as a general principle
of law.
29. Thus in any given case the search for an
applicable principle of law follows the four tier
order of priority. If an applicable principle by reference to which the case can be decided is found in
tier two, there is no need to resort to tiers three and
four and indeed such resort is impermissible. Of
course, resort must be had to the hierarchy on an
issue-by-issue basis self-evidently any given
case may involve more than one legal issue so that
resolution of the case as a whole may require the
application of more than one legal principle and,
therefore, resort to more than one tier in the
hierarchy.
30. Section 868 in Book III provides:
Contracts of Maritime insurance shall be governed by the provisions of the Maritime Law.
This is the official translation. It was I think
common ground that a more direct translation of the
Thai corresponding to the last three words as translated would be the Law of the Sea. However that
may be, it is common ground that no Maritime
Law or Law of the Sea has been enacted in
[2010]
[QBD (Admlty Ct)
Thailand. There is in Thailand no law specific to

marine or maritime insurance. It is common ground
that section 868 is effectively a placeholder
intended to refer to any Maritime Law which may
eventually be enacted. It seems that a draft law was
prepared in about 2000. The draft bears a striking
resemblance to the English MIA 1906. However
the draft has not been enacted into law and no one
suggested that its existence is of any relevance to
the question I have to decide.
31. In Title XX of Book III there are 22 sections
of general application to insurance including section 880 which provides:
If the loss is caused by the act of a third
person, the insurer who pays compensation is
subrogated, up to the amount paid by him, to the
rights of the assured and of the beneficiary
against such third person.
If the insurer has paid part only of the compensation, he cannot exercise his right to the
prejudice of the right of the assured or of the beneficiary to claim from the third person for the
remainder of the loss.
There are also special provisions for insurance on
carriage (sections 883 to 886), guarantee insurance
(sections 887 and 888), and insurance on life (sections 889 to 897). Furthermore in Book II there
appear the following, under the rubric
Subrogation:
Section 226. A person who is subrogated to
the rights of a creditor is entitled to exercise in
his own name all the rights which the creditor
had in respect of the obligation including any
security for it.
By real subrogation, a property is substituted
for another property in the same juristic position
as the previous one.
Section 227. When a creditor has received as
compensation for damage the full value of the
thing or right which is the subject of the obligation, the debtor is, by operation of law, subrogated into the position of the creditor with
regard to such thing or right.
32. It is the claimants case that because section
868 of the TCCC is a specific section of the Code
by which, in terms, contracts of marine insurance
shall be governed, when the Thai court is seized of
a marine insurance dispute it is impermissible for it
to have regard to the general provisions of the Code
which might otherwise be thought applicable to the
issue under consideration whether directly or by
analogy. The consequence is, they say, that since no
provision of the Code other than section 868 deals
specifically with marine insurance, tier one yields
no applicable provision of law. Since it is common
ground that there is no relevant local custom tier
[2010]
QBD (Admlty Ct)]

two yields no applicable provision. Resort to analogous provisions under tier three is they say impermissible and the court must therefore apply the
general principles of law. The claimant says that the
Thai Supreme Court has on two occasions given
effect to provisions of the MIA 1906 thereby adopting them as part of Thai domestic law. The claimants say that the present inquiry as to the acquisition
of a proprietary interest by underwriters would be
resolved in the same manner, giving effect to the
relevant provisions of the MIA as if they were part
of the Thai domestic law of marine insurance in
preference to provisions of the Thai general law of
insurance.
33. The defendants by contrast say that there is
no principle of Thai law which in a marine insurance case precludes reference to the provisions of
Thai law which are of general application to insurance. The defendants say that sections 880 and 227
of the Code deal with the question of the rights
acquired by insurers upon payment of an indemnity,
and that the provisions apply either under tier one,
the question at issue falling within the letter or the
spirit of those provisions, or under tier three, those
being the provisions most nearly applicable by
analogy by reference to which the case shall be
decided.
34. The result for which the claimants contend is
at first sight somewhat remarkable, since the reference in section 868 to the provisions of the Maritime Law which does not exist is said to oust
reliance upon the entirety of the Thai law of obligations and the Thai law relevant to the acquisition of
proprietary interests, enshrined as it is within a
sophisticated codified system. The defendants for
their part contend that resort to the provisions of a
foreign law under tier four will only be had where
there is a gap in the Thai law which cannot be filled
by reliance upon analogous provisions of the Code.
They also say that when thus applied the relevant
foreign law is not being applied as Thai law as such
but rather as general principles derived from foreign law. I do not need to decide the latter point,
which Mr Wutipong himself recognised as still the
subject of debate among Thai scholars.
35. It was accepted by Mr Wutipong that there is
no provision in the Code and no pronouncement of
the Thai Supreme (or any) Court to the effect that
the existence of a specific provision in the Code
dealing with the topic under consideration renders it
impermissible to apply another provision of the
TCCC by analogy. The suggested rule is, particularly when examined in the context under consideration, somewhat counter-intuitive. One would
naturally expect that contracts of marine insurance
being contracts of insurance would be governed by
the general law of insurance except in so far as the
latter is modified by express provision applicable to
13
[TOMLINSON J
marine insurance alone. Nonetheless, there is some

support for the rule in this context in the academic
writings which are as I understand it accorded persuasive weight in Thai courts although they must
always yield to decisions of the Supreme Court
which will carry the greater weight.
36. Thus Professor Jamras writes, in his Case
Book on Insurance Law, 3rd Edition, at page 18:
Contracts of Maritime Insurance
There is one point to note in respect of insurance law, that is, Civil and Commercial Code
section 868 states that Contracts of Maritime
Insurance shall be governed by the provisions of
the Maritime Law, which means that provisions
regarding insurance in the Civil and Commercial
Code will not be applicable to contracts of maritime insurance, even though in fact, contracts of
maritime insurance are a type of insurance
against loss.
This passage is reproduced verbatim, apparently
without attribution, by Professor Chaiyot in his Law
Summary Series, 7th Edition, at pages 6 and 7. It is
also reproduced by Professor Attaniti in an Educational Handbook on International Trade Law on
Carriage of Goods by Sea and Maritime Insurance,
at pages 219 and 220. Lastly, there is a passage in
Professor Pramual Chancheewas An Explanation
of the Marine Insurance Act 1906 of England to
similar effect.
37. It became apparent during the examination of
this and other academic material that in Thailand
the reproduction of the work of others, apparently
without attribution, is commonplace, although it
may be that the partial translations with which the
court was provided give a misleading impression.
In any event, I naturally assume that reiteration of
this sort does not occur save where the second
writer subscribes independently to the view
expressed. However that may be, examination of
the two decisions of the Thai Supreme Court upon
which the view expressed was based showed that
they do not support it. Reference was made in these
academic writings to Supreme Court rulings Nos
999/2496 and 7350/2537, sometimes called the
Trang Kanu and the Roong Tawee cases after
the ships involved. However in neither case was it
said or even implied by the court that in a marine
insurance case it is impermissible to have regard to
any of the provisions of the TCCC which bear
generally upon insurance. In the first case, the policy, written in English, covered loss proximately
caused by perils of the sea. The court had resort to
section 55 of the MIA 1906 for assistance with the
concept of proximate cause and to the general English law of marine insurance for assistance with the
meaning of perils of the sea, neither being matters
14
TOMLINSON J]
LLOYDS LAW REPORTS

dealt with by the TCCC. I do not accept Mr Gaismans submission, which Mr Wutipong controverted in cross-examination, that in this case the
Supreme Court also applied section 879 of the
TCCC. The court did refer to section 879 when
dealing with a very confused and misconceived
argument of the insurers. The insurance was on a
cargo of cement. The insurers seem to have argued
that they could escape liability by demonstrating
that the vessel suffered from wear and tear. The
Supreme Court pointed out the fallacy in this argument, the underwriters being entitled to rely only
upon the inherent vice of the property insured,
which was the cement cargo not the carrying vessel.
In that regard they pointed out that section 879 of
the TCCC provides, in part, the insurer is not
liable for loss resulting directly from the inherent
vice of the subject of insurance unless otherwise
provided. The court also pointed out that this provision is in line with English law, in fact with MIA
1906 section 55(2)(c). However the Supreme Court
had no need to apply section 879, since the argument was fundamentally misconceived as relying
on the wear and tear or inherent vice in the vessel as
opposed to in the cement, and failed on that ground
alone.
38. The position was however different in the
second case, No 7350/2537. The claimant was the
mortgagee of an insured ship which was lost by an
insured peril. The insurers paid the mortgagors the
amount due under the policy. The mortgagee bank
claimed against the insurers in respect of the loss.
The insurers objected that the mortgagee could not
claim to have suffered loss without proving the
amount outstanding on the loan. The mortgagee
bank relied in turn upon section 231 in Book II of
the TCCC which provides, in part:
If properties mortgaged, pledged or otherwise
subject to a preferential right, are insured, the
mortgage, pledge or other preferential right
extends to the claim against the insurer.
In case of immoveable property, the insurer
shall not pay the indemnity to the insured until he
has given notice of his intention to do so to the
mortgagee or other preferred creditor, and has
not within one month from such notice received
any objection to the payment, provided always
that the insurer knew or ought to have known of
the mortgage or other preferential rights; however, any right registered in the Land Registry is
deemed to be known to the insurer. The same
rule shall apply to mortgage of moveables
allowed by law.
In case of moveable property, the insurer may
pay the indemnity to the assured directly, unless
he knew or ought to have known of the pledge or
other preferential right.
[2010]
[QBD (Admlty Ct)
The ship mortgage was registered. The Supreme

Court held that the mortgagee bank could bring the
claim directly in reliance upon this section of the
TCCC. The court then had resort to section 33 of
the MIA 1906 for assistance as to the meaning and
effect of a warranty in the policy. As I have already
observed the court, unsurprisingly, neither said nor
implied that resort to provisions of the TCCC other
than section 868 was impermissible. I found difficult to follow Mr Wutipongs thesis that section
231 had been applied only to what he termed a
procedural matter. It seems to me that it was applied
to a matter of substance concerning the ability of
the claimant to pursue the claim. The academic
writers do not appear to have considered another
decision of the Supreme Court given earlier in the
same year as the case just discussed. Case No
6649/2537 was concerned with insurance of goods
carried by sea, here rolls of tissue paper carried by
sea from Sweden to Thailand. A point arose as to
whether the claim had been brought in time. Section 882 of the TCCC provides:
No action for payment of compensation can be
entered later than two years after the date of the
loss.
...
Section 882 is in the same chapter of the TCCC
as section 880. It is as I have already remarked a
chapter dealing with general provisions applicable
to insurance against loss. Discussing the time bar
defence, the Supreme Court in this case said:
The Plaintiff insured such goods with the
Defendant according to the marine insurance policy . . . Such insurance was marine insurance in
accordance with section 868 of the TCCC, which
is governed by Maritime Law. Nevertheless, at
that moment Thailand had neither Maritime Law
in respect of marine insurance nor local custom
on this type of contract. The issue concerning the
prescription period regarding compensation from
the insurance contract in this case shall be governed by Section 882, paragraph 1, which is in
Book III, Title XX, Subtitle 2 headed Insurance
Against Loss, since it was the most nearly applicable provision to be applied in the case as prescribed in Section 4 of the TCCC.
This was of course a clear reference to tier three
in the hierarchy prescribed by section 4 of the
Code. Mr Wutipongs analysis of this case was that
the Supreme Court had applied section 882 because
on examination of the MIA 1906 it found no provision importing a prescription period. He accepted
that there is no trace of this in the report of the
courts judgment. He also accepted in his evidence
that if an applicable law is found in tier three,
analogy, the court may not resort to tier four. He
could not explain how the court had on his analysis
[2010]
QBD (Admlty Ct)]

acted in an irregular fashion in resorting to tier four

before tier three. He also suggested that after this
aberrant decision the court had in Case No
7350/2537 returned to the orthodox approach mandated by precedent. However I do not consider that
the later case can be regarded as impliedly overruling the earlier, as Mr Wutipong suggested. Leaving aside the fact that two judges (out of a panel of
three) were common to both decisions, as I have
already pointed out the court in Case No 7350/2537
likewise had resort to a provision of the Code of
general application.
39. An analogy can be drawn between section
868 and another placeholder section of the Code,
section 609, second paragraph. This provides:
The carriage of goods by sea is governed by
the Laws and Regulations relating thereto.
Until 1992 there were no provisions in Thai law
specifically applicable to the carriage of goods by
sea. During that period in appropriate cases the
Thai courts applied other provisions of the TCCC
by analogy. In Case No 563/2532 the Supreme
Court applied section 625 of the TCCC. In Case No
2930/2537 the Supreme Court applied section 616,
expressly under tier three. Mr Wutipong was at one
time inclined to suggest that there was no real
analogy and Mr Chamnian was cross-examined to
the effect that there is some difference in substance
between the reference in section 609 to the generality of laws governing carriage of goods by sea
and the reference in section 868 to a specific law.
This was an unconvincing distinction where the
reference in each case was obviously to putative
provisions of specific applicability. By the end of
his evidence Mr Wutipong had I think accepted the
force of the analogy between these two placeholder sections.
40. A respected commentator, Professor Pantip,
commented as follows on the decision of the
Supreme Court in Case No 7350/2537, where the
court had resort to section 33 of the MIA 1906 for
assistance with the meaning and effect of a warranty in the policy:
. . . The court applies the English law in its
belief that the law in question has the status of
general principles of law. No English law is
applied by the Thai courts as the law of the state,
but there may be some dangers in that both
judgments of the Supreme Court fail to explain
how the English law has become a general principle of law under section 4 of the Civil and
Commercial Code. The issue is under what condition would an English law be regarded as a
general principle of law. It is impossible that
English law has the status of general principles of
law. It is a pity that the Supreme Court did not
explain how the parties had asserted in the plead-
15
[TOMLINSON J
ings and the Court then admitted that the English

law has the status of a general principle of law. It
cannot be refused that an acceptance of the application by the Thai courts of the use of section 4
of the Civil and Commercial Code as a means to
search for foreign laws for application in the Thai
courts is a good solution to a gap in the law, but
it should not be forgotten that the solution has
considerable inherent dangers.
In conclusion, it is evident that the Thai courts
are just like internal courts of various states, ie
not reluctant to apply foreign laws in civil and
commercial cases if Thai laws give powers to the
courts to do so. Nevertheless, prudence is of
course exercised in the acceptance of the application of foreign laws in the trial of cases in their
courts.
41. The claimants have failed to persuade me that
a Thai court would in the present context feel the
need to resort to the MIA 1906 when there is
readily to hand section 880 which is applicable by
analogy and which provides rights of subrogation to
an insurer who has paid compensation. Mr Wutipong accepted that the rights to which an insurer is
subrogated by section 880 are rights against third
parties and no other rights of the assured. There is
also readily to hand section 227, the effect of which
I must next examine, but which is plainly applicable by analogy. Mr Wutipong also accepted that
there has as yet been no occasion upon which a
Thai court has in this context given effect to concepts such as trust and equitable lien which find no
place in the MIA 1906 but which may be used by
English law to support and to give proprietary
effect to the rights of underwriters which are
spelled out in the MIA. Mr Chamnians evidence to
the effect that a Thai court would not recognise
such concepts was not I think challenged in crossexamination and is fully in line with the approach
of Professor Pantip that resort should be had to
foreign law only with caution and where necessary
to fill a gap in the domestic law.
42. I turn then to the argument which relies upon
section 227. The claimants suggestion is that section 227 transfers property in the wreck to the
insurer when he pays for a total loss. It is said that
this follows from the terms of section 227 itself,
which distinguishes between subrogation to the
thing and subrogation to the right. Furthermore
section 877 provides that an insurer is bound to pay
compensation for the actual amount of the loss. It is
said by the claimants that this provision precludes
the assured from receiving the sum insured and
retaining the wreck such that, if the insurer has
already the sum insured, it inevitably follows that
he is entitled to the wreck. Finally it is said that this
approach again derives support from the academic
commentaries.
16
TOMLINSON J]
LLOYDS LAW REPORTS

43. The claimants approach certainly finds support from Professor Sopon in his An Explanation
of the Commercial and Civil Code with regards to
Obligations at pages 270 to 275. It is similarly
supported by Professor Phraya Tepwitoon in An
Explanation of the Thai Civil and Commercial
Code. Both seem to regard the process as automatic, which is consistent with section 229 of the
TCCC which provides that subrogation takes place
by operation of law. Professor Chaiyot however in
his An Explanation of the Commercial and Civil
Code with regards to Insurance at pages 199 to
200 puts forward only a tentative view as
follows:
Rights over the wreck
The question as to who will be entitled to the
wreck arises only in relation to a total loss claim.
If the insured property is partially damaged, it is
not necessary to consider the issue of the wreck,
as such property can still be repaired and put into
a good state.
The reason we should consider the wreck issue
is because although there is a total loss of the
insured property, the wreck still remains and has
an ascertainable value. In theory, the assured is
not entitled to both the full amount of compensation and the remaining value of the wreck. If this
were the case, it would mean that the assured
would profit, in that the amount of the compensation exceeds the amount of the actual loss. This
conflicts with the principle of insurance which
says that a contract of insurance is a contract of
indemnity.
The Commercial and Civil Code (CCC)
does not refer to rights over the wreck being
insured, but it is considered2 that after the insurer
pays the full amount of compensation to the
assured or the beneficiary until the total loss is
completely indemnified, the insurer ought to
have a proprietary right over the wreck or may
deduct the price of the wreck from the amount of
compensation.
This issue had been considered by the
Supreme Court as follows: . . .
44. Professor Chaiyot then refers to Supreme
Court decisions Nos 358/2499 and 596/2507 which
I shall examine in a moment. Finally Professor Jitti
is in a minority of academic opinion. In his commentary on Supreme Court decision No 1913/2520
he says this:
The subrogation to rights under section 227
does not mean subrogation to rights in the
wrecked car because under section 226 only the
right that a creditor has in the obligation may be
2 I have at this point adopted what Mr Wutipong considered to be the
correct translation.
[2010]
[QBD (Admlty Ct)
subrogated. The right in the obligation is a claim,

which is a personal right, not a real right.
45. It is common ground that there is no Supreme
Court ruling in which it has been expressly decided
that an underwriter acquires ownership of wrecked
insured property by operation of law on paying an
indemnity for a total loss. This is to my mind
unsurprising. Such a principle would go beyond
that which obtains in English law. In the context of
marine insurance it would entail that underwriters
automatically become owners of what might be a
damnosa hereditas. Mr Wutipong accepted that
there is no provision of Thai law pursuant to which
an insurer who pays a loss in respect of totally
damaged property is obliged to take over the
wrecked property and that to my mind is conclusive
of the point. In Thai law subrogation takes place
automatically by operation of law. It is not suggested that there is any elective principle. If in Thai
law underwriters are not obliged to take over a
wreck on payment of a CTL then there can be no
process pursuant to which such a transfer of ownership is effected automatically.
46. The Thai cases relied on in the academic
material are cases Nos 358/2499 and 596/2507. In
neither case is section 227 mentioned in the report.
The first case concerned motor insurance and a
badly damaged car. The report is neither full nor
clear but it would seem that there was a term in the
policy to the effect that the insurers could elect
either to repair the car or to pay compensation for
its replacement. It is possible that the policy provided also that in the latter event the insurers were
bound to take the wrecked vehicle. What occurred
is that the insurers did repair the vehicle but it was
questionable whether following repair the vehicle
was roadworthy. The chassis had been broken and
the repairs involved cutting and joining. Dissatisfied with the repair, the insured by his lawyer
wrote to the insurers asking them to take the wreck
and to pay compensation. The Supreme Court held
that as the car could not be repaired to a good and
normal condition the insurers must take the car and
pay compensation. The source of the obligation to
take the car is unexplained. It was in this specific
context that Mr Wutipong agreed that there is no
provision of Thai law which imposes such an obligation. Mr Wutipong twice agreed with suggestions
that the decision was to be explained by the presence in the policy of a clause requiring insurers to
take over the wreck, but the position is not in fact
clear from the report.
47. The second case concerned a rice mill. The
buildings and the machinery were destroyed by fire.
The mill was insured against fire by three separate
insurers. The proceedings before the Supreme
Court involved only one of the insurers. That
insurer is reported to have argued before the
[2010]
QBD (Admlty Ct)]

Supreme Court that upon the occurrence of loss or

damage the insured subject matter was required to
be transferred to it. The significance of this argument was that following the fire the insured had
sold the destroyed mill, realising Baht 42,000.
Again this argument may well have reflected some
term in the policy which is not set out in the report,
because it is no ones case that Thai law provides
that insured property is to be transferred to the
insurer upon the occurrence of loss and damage.
Whatever rights are given by section 227 are
expressly contingent upon payment of the full value
of the thing or right insured. The relevant decision
of the court was simply to the effect that the defendant insurer was not, as it contended, entitled to
offset the entirety of the sale proceeds but that the
recovery was to be shared rateably amongst all
three insurers in proportion to the values which they
insured. The source of the insurers entitlement is
again not explained. Mr Chamnian thought that the
case did no more than illustrate the principle that an
insured is entitled to no more than an indemnity. He
was unprepared to accept that had the rice mill not
been sold by the insured the court would have
required its transfer to underwriters.
48. Three other authorities were said by the
claimants to touch on the point. In none of them
was section 227 discussed and none of them is in
my view of any real assistance. In cases Nos
1374/2534 and 117/2540 motor insurers sold a
wrecked vehicle, in the first case before paying the
insured sum, in the latter after paying the insured
sum. The reports do not indicate whether this was
done by agreement or pursuant to terms in the
policy. I do not think that it can be assumed that
insurers were simply acting pursuant to an entitlement conferred by law, which in the first case in any
event could not be an entitlement generated by
payment of an indemnity. Case No 8010/2548 is
equally obscure. I would agree with Mr Milligan
that it may be dangerous to read too much into the
(translated) language the Plaintiff had subrogated
to the rights in the indemnities only because this
may be a reference to the inability of the hotel to
return to the insurers the pick-up truck which had
been stolen from its premises. By the same token
however I cannot read the case as endorsing the
view that property in the truck was automatically
vested in the insurers upon their payment of the
insured owners claim. Mr Chamnian regarded
none of the cases cited as illustrating anything other
than the broad discretionary power of the Thai court
to avoid an insured receiving more than a full
indemnity by offsetting the value of the wreck or
other benefits retained by the insured from the compensation payable by the insurer.
49. On this point too I am simply unpersuaded by
the claimants, on whom lies the burden of proof,
17
[TOMLINSON J
that Thai law has the effect for which they contend.
The automatic vesting for which the claimants contend would be surprising and inconvenient and
there is in my judgment no support for it in the two
decided cases which are prayed in aid by those
academics who regarded it as part of Thai law. In
my view the view of Professor Jitti is to be preferred. I would however go a little further. Mr
Chamnian said that the Thai word translated as
subrogated in section 227 carries with it the connotation that it is rights to which the insurers are
subrogated, and he contrasted it with the Thai word
used in section 226 which has been translated as
real subrogation. This is a point which it is difficult to evaluate if, as I do, one lacks the ability even
to recognise the characters of which the Thai words
are made up. Mr Chamnian plainly thought that the
English lawyers were being misled by the use of the
expression thing or right in section 227 into
thinking that the process of subrogation here
described includes a transfer of ownership of an
insured object. Quite apart from the fact that I
regard it as unlikely that Thai law has embraced an
inflexible automatic rule which could be seriously
disadvantageous to insurers, I have come to the
conclusion that I can have confidence in Mr
Chamnians views as being well-informed and
properly thought through. Mr Chamnian has 28
years relevant experience practising as a commercial lawyer and has been with Messrs Deacons in
Thailand since 1988, becoming a partner in 1996.
He gave his evidence in a careful and thoughtful
manner. Mr Wutipong did not have such directly
relevant experience, having initially pursued a
career in the judiciary where his work was at first
less specialised and later more slanted, as it seems
to me, towards intellectual property disputes.
Although Mr Wutipong has subsequently been
employed by various companies as a legal adviser
and is currently Executive Vice President, Legal
Affairs Division, of a Thai bank he has never I
think been in private practice. There were some
unsatisfactory features of the manner in which his
evidence was compiled and given. This may not
have been entirely his fault, but the degree of editorial input into his witness statement was such, or
apparently such, that the final report discussed concepts which Mr Wutipong did not actually understand. Moreover it became clear that Mr
Wutipongs experience of marine insurance disputes was not extensive although he had no doubt
attempted to keep abreast of the subject in a general
way. Mr Wutipong introduced into his evidence at a
late stage a substantial document which he had not
himself prepared. Whilst that is not of itself necessarily objectionable, Mr Wutipong had taken insufficient care or perhaps had had insufficient
opportunity to study the document to ensure that he
18
TOMLINSON J]
LLOYDS LAW REPORTS

was familiar with and understood its contents. The

upshot is that Mr Wutipong did not give a good
impression. On the contrary I derived the impression that, whilst no doubt doing his best, he was
giving evidence about a field of law in which he had
insufficient practical experience to enable him to
give informed views. In a matter such as the proper
understanding of section 227, which is in turn
dependent upon an appreciation of the use of Thai
legal terminology, I unhesitatingly prefer the evidence of Mr Chamnian.
Conclusion on proprietary interests
50. It follows that I have concluded that the
insurers acquired no proprietary interest in the vessel prior to its sale by the first defendant to fourth
defendant. If this conclusion is correct there were
no proprietary interests of which the fourth defendant could have had notice. It is therefore irrelevant
and unnecessary to consider whether the fourth
defendant was a purchaser for value which is in any
event a pure question of law.
51. For completeness I should record that:
(i) It is common ground that, were Dutch law
to be relevant, in the circumstances no legal
ownership or proprietary interest short of legal
ownership would have passed to the insurers
prior to the sale of the vessel on 9 January 2009;
and
(ii) It is also common ground that nemo dat
quod non habet is a principle of English, Thai
and Nigerian law.
52. The remaining issue for decision is therefore
whether the court has jurisdiction under sections
423 to 425 of the Insolvency Act 1986 to set aside
the sale by the first defendant to the fourth defendant and, if so, whether it should exercise its discretion so to do. At this stage I use the expression set
aside the transaction as a broad paraphrase of the
powers conferred on the court by section 423(2) of
the Act. Before addressing these points I must first
sketch in the factual context in which the underwriters seek this relief.
Background to the sale of the vessel
53. As I have already set out the underwriters
were anxious to progress and if possible resolve the
question of the realisation of the residual value in
the vessel before agreement of and payment for a
CTL. Mr Bus confirmed in his evidence that Boskalis were determined not to enter into discussions on
this issue before the CTL was agreed and paid. Mr
Bus was well aware that there was going to be
considerable room for argument with the underwriters about the value of the wreck.
54. I should say a word about Mr Bus, since he is
central to the narrative which follows. Mr Bus is
[2010]
[QBD (Admlty Ct)
obviously a highly intelligent man, completely on

top of his job and unswerving and resolute in his
defence of the interests of his employers. He gave
his evidence with great charm, often employing a
self-deprecatory technique, suggesting that questions addressing underlying legal issues were a little
too complex or technical for him to comprehend. I
quickly realised that any answer that admitted of
the possibility of something having been present to
his mind or to the mind of his colleagues at Boskalis during these events should be interpreted as
confirmation that indeed it had been. Mr Bus was
well-informed in insurance matters as his job as
head of the insurance department for the Boskalis
Group since 2002 would both indicate and require.
He obtained that responsible post at the age of 31 or
32 after working for eight years as an in-house
corporate lawyer in the oil and offshore engineering
industry in Holland, during which time his duties
involved advising in the field of insurance. He has
a law degree from the University of Amsterdam. It
did not emerge whether he has any legal professional qualification but he admitted to being a
lawyer by training. I am satisfied that Mr Bus at all
times had a good grasp of the legal issues and
principles in play as the struggle between Boskalis
and underwriters developed.
55. Indeed on the central issue in the case Mr Bus
accepted at the outset of his cross-examination that
he had at all material times understood how the
relevant principles of English marine insurance law
worked. He had handled two total losses for Boskalis before WD Fairway. In each case underwriters
had paid Boskalis the difference between the
insured value and the agreed value of the wreck. Mr
Bus was determined that on this occasion Boskalis
should first be paid in full for the CTL, no doubt
because he recognised that the scope for argument
as to the residual value of the wreck could otherwise well result in long delay in payment of the net
value of the CTL. However Mr Bus clearly understood, and to be fair to him unequivocally accepted
that he understood, that on payment for a CTL the
underwriters could choose to take possession of
the vessel. One of the answers given by Mr Bus in
this connection spoke of his understanding that
there was an option for underwriters to take possession upon agreement. For the avoidance of any
possible doubt I find that Mr Bus knew and understood that at the end of the day the entitlement of
underwriters is not dependent upon the agreement
of the assured. His answer no doubt reflected that in
the paradigm case realisation of value of the wreck
is dealt with by agreement by insured and underwriters. I am however wholly satisfied that Mr Bus
in fact understood that underwriters had an unfettered and unilateral choice in the matter and in the
light of his earlier answer I am not sure that he
[2010]
QBD (Admlty Ct)]

intended by his later answer to which I have just

referred to suggest otherwise. It was because of his
appreciation of the position that, later in the story,
he felt obliged to act quickly before all subscribing
underwriters had exercised their election. Whatever
uncertainty there may have been as to the efficacy
of an election by 85 per cent of the market to take
over the vessel would, as he appreciated, be
resolved by election of the remainder.
56. In early April 2008 Boskalis allowed access
to the vessel to both the primary underwriters
valuation surveyor Marlboro and to the claimants
valuation surveyor Mr Webster of Venmar. If Marlboro reported to the leader on the primary layer
Fortis, also the 14th claimant herein, their valuation
has not been shared with Boskalis or their report
disclosed in these proceedings. Mr Webster
inspected the vessel at Sattahip on 10 and 11 April
2008, but his valuation certificate was not issued
until 9 June.
57. Unbeknown to underwriters Boskalis had in
fact in January 2008 sought a valuation from Dutch
brokers Boogaard Sliedrecht BV. Mr Van Leeuwen,
the principal broker in that firm, inspected the vessel on 6 January 2008. On 15 January he issued to
Boskalis his written valuation report, which was in
the range of 23 million to 27 million. Boskalis
did not reveal this valuation to underwriters until 25
August 2008.
58. By mid-May 2008 underwriters had heard
provisionally from Mr Webster and they told the
brokers Marsh by email of 15 May that the figures
he had mentioned were, as would be no surprise to
Marsh, significant. At a meeting on 23 May 2008 to
discuss the ongoing salvage claim, outstanding liabilities enforceable against the vessel and residual
value, Mr Street of Marsh made the point that he
still did not know what the valuation figure was. Mr
Kersey in response made the point that the only
way to achieve the figure indicated in the valuation
would be to put the vessel out to global tender.
59. On 27 May 2008 the first defendant in the
shape of Mr Bus emailed Mr Kersey a long letter
which enclosed a claim form issued in the Commercial Court by the first, second and third defendants
herein against the underwriters subscribing to the
excess layer with the exception of Fortis. The claim
form had been issued on 1 February 2008. Amongst
other things it claimed from underwriters compound interest, simple interest and damages consequent upon what was said to be underwriters
delay in making payment for the CTL. I was told
that this action is due for trial in October this year.
The writ having been issued on 1 February 2008,
and being initially valid for service for four months,
underwriters were invited to confirm by the next
day, 28 May, that Stephenson Harwood were
19
[TOMLINSON J
instructed to accept service on their behalf. Neither

this communication nor the summary manner in
which underwriters were expected to respond to it
did anything to promote the likelihood of agreement between the parties as to the manner in which
the residual value of the vessel should be ascertained and/or realised.
60. On 28 May 2008 Mr Kersey responded to Mr
Street, who had it seems been the conduit through
whom Boskalis communication of 27 May had
been channelled. After dealing with what he
described as the unnecessary and unwelcome
diversion Mr Kersey told Mr Street that Mr Webster had now finalised his valuation in the sum of
75 million, as is where is. He advised that a
certificate would follow shortly. He concluded:
In the circumstances and unless Boskalis are
willing to make an offer for the vessel in this
amount, underwriters suggest the appropriate
way forward is to invite tenders from third
parties.
61. On 6 June 2008 in the absence of Mr Kersey
Mr Hill emailed Mr Street as follows:
Underwriters are disappointed not to have
received any substantive response to their message. They are extremely keen to move the issue
of the realisation of the vessels residual value
forward without further delay. As previously
advised, pursuant to their rights under the policy
and/or at law and pending the receipt of certain
vital information, underwriters continue to
reserve their right to take possession and ownership of the vessel. Before a final decision is
taken, however, underwriters urgently require
information regarding the current liabilities
against the vessel . . .
Meantime, a copy of the certificate of Mr
Geoff Webster confirming his estimate of the
residual value of the vessel at 75 million will be
forwarded early next week once he returns to his
office. Without prejudice to underwriters right to
take possession and ownership of the vessel
should they elect to do so, they are obviously
willing to consider Boskalis proposals should it
wish to purchase the vessel. Meanwhile, underwriters should also be grateful for Boskalis confirmation that it will agree that access to the
vessel will be granted to identify [sic] third parties for the purpose of inviting tenders for
purchase.
62. On 9 June 2008 Mr Kersey received the
Venmar valuation certificate dated that day. He
immediately sent it to Mr Street. I shall have to
revert to the Venmar valuation in due course. However the operative parts read as follows:
LLOYDS LAW REPORTS
20
TOMLINSON J]
VALUATION CERTIFICATE FOR THE

JUMBO HOPPER DREDGE THE WD FAIRWAY. (6/09/2008)
1.0 INSTRUCTION
At the request of Alex Davis Esq of the Law
Firm of Stephenson Harwood, One St Pauls
Churchyard, London, the undersigned was
requested to survey the Jumbo Hopper Dredge
the WD Fairway, in order to ascertain her present
residual value, on an as is where is basis, as she
presently lies alongside the Commercial Port,
Royal Navy Yard in Satahip, Thailand. I have
also been asked to research potential buyers on
the worldwide market, for this vessel.
2.0 SURVEY OF WD FAIRWAY IN THE
COMMERCIAL PORT, ROYAL THAI NAVY
SATAHIP, THAILAND, APRIL 10TH 2008.
The undersigned, Geoff Webster, travelled to
Bangkok on April 8th 2008 and surveyed the
vessel, on the 10th of April 2008. Mr Dirk Smit
a mate from Bos Kaliss [sic] hopper dredge
department, and a crew member of the vessel at
the time of the collision, was acting as a daily
watchman aboard the vessel. The hopper dredge
was lying alongside a pier, just aft of a frigate
from the Royal Thai Navy.
3.0
INITIAL
EXAMINATION
AND
FINDINGS:
The vessel was well found, and in a much
better condition than expected, it was properly
moored and floating on an even keel. There was
a shore power connection on board for lighting.
It was not known what other safety measures
were in hand to prevent the vessel from taking on
water, or fighting a fire. It was reported that the
vessel is tight and has not taken on any water for
at least the past five weeks.
The condition of the vessel was much better
than expected. The vessels hull, propulsion system, accommodation, dredge equipment and
spares are in a good condition, however the complete electrical system will have to be replaced.
In the opinion of the undersigned, it will be
economically viable to recommission this Jumbo
Hopper dredge with the appropriate technical
support.
...
5.0 CONCLUSIONS
The world market for major dredging works is
at present at the all time high in the history of
dredging, and in the large Dutch and Belgium
companies including Van Oord, Bos Kalis, Jan
De Nul, and DEME, have billions in Euros of
dredging projects on order. The Arab Nations are
building more and more islands; there is a contract out for a new additional causeway between
[2010]
[QBD (Admlty Ct)
Saudi Arabia to Bahrein and a new causeway

between Qatar to Bahrein. The Dutch have plans
to enlarge the Nieuw Waterway (Maasvlaakte) in
Rotterdam, and build an offshore island. We
understand the future world dredging market,
within the next few years will need to dredge
over one billion cubic metres of sand, for all the
projects worldwide, with a large portion of the
work to be performed with Jumbo Hopper dredgers, which have the ability to haul sand over large
distances.
This means that the WD Fairway and other
such existing hoppers will be in high demand for
at least the next ten years, making the WD Fairway a very desirable and valuable piece of
dredge equipment, even in her present condition.
It is the opinion of the undersigned that in order
to obtain the maximum value for this Hopper
Dredge, it is recommended that the vessel be put
out for a world tender, by an internationally
known ship/dredge broker, and Appendix No 1 is
a list of potential buyers for the dredge.
Based upon the above, we therefore Value
the WD Fairway in her present condition, as
of June 2008, on an as is where is residual
basis at:
75 Million Euros (75,000,000).
Section 4 contained a brief CV of Mr Webster
and of Mr Arie De Kluiver, both of whom signed
the certificate. This background material was supplemented in an appendix. Appendix No 1 to the
document was a List of Potential Dredging Companies that may be interested in purchasing the
vessel. That included companies in Bahrain,
Israel, Qatar, Saudi Arabia, China, India, Japan,
South Korea, Malaysia, Taiwan, Belgium, France,
Germany, the Netherlands and the USA. Twentyseven companies were listed, including Boskalis.
63. The Venmar valuation certificate does not
indicate the precise manner in which the figure of
75 million had been reached. Not unnaturally
however the claimants and in particular Mr Kersey
relied upon it as being a reasonable valuation
based on a good process to come to the value of the
vessel. I do not think that Mr Kersey thought that
underwriters would necessarily realise this figure,
but he had no reason to believe that the valuation
had been reached by anything other than a process
in which he could have confidence. If not set in
stone, it was at the least a starting point for negotiations with Boskalis. Whilst the headline figure will
obviously have had the principal impact on Boskalis, to my mind it should not be overlooked that an
integral part of the valuation or valuation certificate
lies in its expression of opinion that in order to
obtain the maximum value for the vessel it is necessary that the vessel be put out for a world tender.
[2010]
QBD (Admlty Ct)]

That of course is a point which Mr Kersey had

made to Mr Street before he had received the final
written report. Boskalis were well aware that underwriters thoughts were moving in this direction, a
point reiterated by Mr Kersey on 11 June when he
emailed Mr Street:
As you will see from Venmars report, Mr
Webster recommends the best way forward to
realise the highest value for the vessel is to put
her out to a global tender. Underwriters have
already received approaches from interested third
parties and look forward to Boskalis confirmation that immediate access will be provided to
these parties as part of the ongoing investigation
into realising the residual value.
64. On 10 June 2008 Boskalis advised underwriters that the current liabilities against the vessel
were in the region of 6 million, excluding the
salvage/wreck removal claim and future costs.
65. In the absence of any substantive response
from Boskalis on 17 June Mr Kersey emailed Mr
Street:
Underwriters refer to their messages of 9th and
11th June in respect of which, you will appreciate, they have received no substantive response
from Boskalis. While understanding that Oscar
Bus was not available for part of last week, there
is now no reason for Boskalis not to provide an
immediate response to the issues raised.
Underwriters have repeatedly stressed the
importance of a timely determination of the vessels residual value. While the Certificate produced by Venmar Inc provides a good benchmark
for the likely value of the vessel, obviously the
true value will be determined by what a purchaser is willing to pay in the open market.
Pursuant to their rights under the policy, underwriters regret that they are now obliged to
demand that Boskalis confirm that they will
allow third party surveyors access to the vessel in
order to begin the process of inviting tenders.
Should Boskalis not provide confirmation by
close of business Wednesday, underwriters will
have no option but to take the appropriate steps
to protect their interests under the policy.
66. A meeting was agreed in an attempt to move
matters forward. It should be borne in mind that
quite apart from the question of residual value the
parties were still dealing with the salvage claim,
which was being handled on their joint behalf by
Messrs Holman, Fenwick & Willan and by Dutch
lawyers similarly jointly instructed. The parties
were also concerned with recovery proceedings in
the US against the owners of the colliding vessel
MSC Joanna. Thus at a meeting which took place
on 15 July 2008 residual value was the third main
item to be discussed. The meeting took place in
21
[TOMLINSON J
London. Amongst 15 attendees were Mr Kersey

and Mr Hill for underwriters, together with Mr
Davis and Mrs Champkins of their solicitors,
Messrs Stephenson Harwood, respectively a partner
and associate. For Boskalis Mr Bus and Mr Haak
attended, the latter being senior legal counsel
within the legal department of the parent Royal
Boskalis Westminster BV. They were accompanied
by Mr Street.
67. Mrs Champkins made a full note of the meeting. A non-contentious part of her note records the
following discussion:
TK then referred to the fact that Venmar had
produced a valuation of the vessel, which had
been produced after a great amount of detailed
calculation and working. Nonetheless the best
test of the vessels worth is to find out what
someone is willing to pay for it. TK asked OB to
confirm what Boskalis intentions in relation to
the vessel were.
OB confirmed that they had considered the
options including whether to order a new build or
buy back the WD FAIRWAY and repair it. They
were looking at buying back the wreck in principle, but this would, obviously, only be on the
basis of a fair value being paid for it. Boskalis
appreciate that the value to be paid for the FAIRWAY would be more than scrap value, however,
they did not [agree] that 75 million was a fair
value. He invited Underwriters to approach Boskalis to discuss the question of value.
TK referred to the fact that they had received
a great deal of interest from a number of third
parties in the vessel and there was certainty that
the vessel would be sold for more than scrap
value, given the competition.
GS questions whether these approaches had
been made verbally or in writing. TK confirmed
that yes they were all verbal approaches at the
moment but nothing has been requested in writing either. AD said that they had seen expressions of interest in writing but no figures in
relation to the vessels value as yet.
TK expressed Underwriters view that a global
tender was the best way forward to obtain the fair
market value of the vessel. He asked whether
Boskalis was still making their mind up as to
whether to buy the WD FAIRWAY back? OB
indicated that whether they wanted to buy it back
depended hugely on the price. If the price was
going to be 75 million, there was no point in
negotiating, however, if Underwriters are prepared to come to the table, Boskalis may be
interested.
22
TOMLINSON J]
LLOYDS LAW REPORTS

AD confirmed that it was apparent that the

tender was the best way forward. There are various steps to take and it was intended to subcontract the tender process to a broker. That broker
will obtain the tenders from various parties and
vet each tender for various factors relating to the
seriousness of the tender and the financially stability [sic] of the third party. In order to allow
this process to take place, it was necessary for
access to the vessel to be allowed. AD questions
whether Boskalis are happy to allow third parties
access to the vessel?
OB confirmed that they would be happy for
tender parties to go onboard the vessel, but he
would need to see Underwriters exact proposal
to run it by his management.
68. I am satisfied that at this meeting Mr Bus
neither agreed to allow prospective tender parties to
go onboard the vessel to inspect her nor agreed that
the best way forward to allow underwriters to determine and realise the vessels residual value was by
way of a global tender process. On the first point
Mr Bus confirmed a willingness to cooperate but
stated that he would need to see underwriters exact
proposals in this regard and seek his managements
approval. On the second point I am satisfied that
underwriters, or perhaps more particularly Mr
Davis, wrongly inferred the agreement of Mr Bus
from his silence or from his failure to comment on
the proposal. It was not the style of Mr Bus to be
confrontational. I doubt if by this stage Boskalis
outright refusal to countenance a tender process had
crystallised, and it would not have been the style of
Mr Bus simply to reject it at this meeting. However
Mr Bus would in any event have been extremely
wary about the proposal and he would not have had
authority to agree to it. The misunderstanding was
soon resolved by email of 14 August 2008 Mr
Bus denied either having agreed to the tender process or that it was the best way forward.
69. At the meeting Boskalis were invited, if they
were interested in buying the vessel, to provide an
offer at the outset to avoid the tender process if
necessary. Mr Bus indicated that he would speak to
his board and see whether this was possible. It was
also suggested that since Boskalis had indicated
that 75 million was not acceptable to them and
since they had seen the valuation certificate in that
amount, it would be worth their while putting forward reasons why they did not consider 75 million
to be an accurate value. Mrs Champkins records
that the discussion developed as follows:
AD then asked whether it was possible to get
an agreement on what the scrap value of the
vessel was. OB said that this was not possible,
perhaps in a meeting about that particular issue it
would be possible. Boskalis will need Underwriters proposal to consider. AD said that they
[2010]
[QBD (Admlty Ct)
must have some idea as to scrap value given

OBs earlier comments about Boskalis having
accepted that they would have to pay more than
scrap value for the vessel. AD stated that a price
just above scrap value is obviously of no interest
to Underwriters. OB has indicated that 75 million is unacceptable. Can OB give some rough
ballpark figure to give Underwriters an idea of
where they are coming from? OB said that as he
had said earlier, Boskalis appreciate that the
value of the vessel for which it will sell will be
above scrap value and OB was of the view that
this shows a cooperative approach. It is now for
Underwriters to come back to Boskalis on this.
AD confirmed that Underwriters will revert on
the proposal as soon as possible.
70. At the end of this discussion Mr Davis
summed up how the matter would proceed if it was
necessary to resort to the tender process. He
emphasised that if the matter did go to tender, the
process would have to be conducted in good faith.
He said that Boskalis would be able to participate in
the tender process but that they would not be given
any kind of trump card at the end of the procedure such as the opportunity to try to match the best
price.
71. After the meeting this point was reiterated in
a letter written to Mr Bus on 25 July by Mr Davis.
Mr Davis wrote:
You have asked us to provide details of the
tender process for your information. We would
propose to appoint a major market broker such as
Messrs Clarksons to market the vessel to be sold
as is where is. Whilst not dedicated specialists
in the dredging market, they certainly have the
reach and market profile to be able to liaise with
the main players.
Whichever broker is selected will required
vessel particulars in order to commence the tender process. This will include copies of all technical plans, certificates, class documentation and
details necessary for a prospective purchaser to
formulate a decision. Once this documentation
has been accumulated, the broker will invite tenders by way of an advertisement in the shipping
press. Those who have expressed interest will be
provided with an information pack and, in addition, be granted access to inspect the vessel. Bids
will be invited within a specified period whereupon the process closes.
At the conclusion of the tender period, those
bids obtained will be vetted by the broker and the
highest bid accepted. The vessel will then be
transferred to the successful party, probably on
the Norwegian Sale Form, by way of a Bill of
Sale executed with Boskalis sanction in the purchasers favour. Any expenses in relation to the
tender process will be deductible from the total
[2010]
QBD (Admlty Ct)]

which will accrue to Underwriters benefit

alone.
Obviously, the process must be undertaken in
good faith. Whilst it will, of course, be open for
Boskalis to participate in the tender and make its
own bid, should it not make the highest offer, it
will not be entitled to reopen the process with an
increased bid in order to gain possession. Should
Boskalis wish to purchase the vessel from Underwriters, we would invite you to make an offer at
an early juncture to allow Underwriters to give it
due consideration.
Prior to the formal tender process, Underwriters propose to allow a number of third parties
who have expressed interest in the vessel access
to her in order to encourage informal bids. We
will write to you under separate cover with the
names of the parties concerned and the dates on
which they propose to visit the vessel.
72. There being no response from Boskalis, on
15 August Mr Kersey advised Boskalis, through Mr
Street, that underwriters were now in discussion
with Clarksons to undertake a global tender. He
repeated, as was the case, that significant interest
had been shown by third parties. Boskalis were
asked for their prompt proposals, failing which
underwriters would finalise the appointment of
Clarksons, thereby committing themselves both to
payment of commission and to taking the highest
price offered for the vessel without preference to
Boskalis. It seems that this message did not at first
reach Boskalis. At all events chasers elicited a
response on 25 August.
73. On 25 August 2008 Mr Bus indicated to
underwriters that Boskalis would be prepared to
consider buying back the wreck for 25 million. He
provided underwriters with the Boogaard valuation
obtained in January 2008 valuing the vessel in the
sum of 23 million to 27million to which I have
referred above. This approach was rejected by Mr
Kersey on the following day. Mr Kersey told Boskalis that both Venmar and the sale and purchase
brokers currently involved in the process, viz,
Clarksons, considered the Boogaard valuation to be
far too low to merit consideration. Mr Kersey added
that underwriters could not see that the valuation
could be seen to be realistic given the salvage
payment recently made. That it will be recalled was
US$19.5 million. At the meeting on 15 July it had
been stated by those handling the salvage claim that
if Boskalis and underwriters were to improve upon
the deal then on the table, which was as I understand it in substance thereafter accepted, the salved
value would need to be brought lower than US$30
million to US$40 million. Finally Mr Kersey made
the point that operators were not currently selling
dredgers and that third parties had shown considerable interest in purchasing the hull. Mr Kersey
23
[TOMLINSON J
expressed the view that those parties were aware

that, because of the then current market conditions,
the vessel would be marketed at more than scrap
plus on-deck equipment, and expressed his view
that that was, in essence, what the Boogaard valuation represented. Although Mr Kersey referred to
Venmars view as to the Boogaard valuation, Mr
Webster was not in fact consulted on that score
between 25 and 26 August 2008. Mr Webster said
in evidence however that he had heard word on the
street in April before he visited the vessel that
Boskalis was either going to pay or to offer 25
million. A week or two after returning from Sattahip he had advised Mr Davis that in his view 25
million was far too low.
74. Further inconclusive exchanges followed. On
5 September Mr Bus advised Mr Kersey that Boskalis was by no means prepared to participate in
the tender process. Mr Bus said that in an attempt
to find a constructive way forward and to break the
apparent impasse, Boskalis was prepared to enter
into negotiations with underwriters to acquire the
wreck but that these negotiations must be conducted on an exclusive basis and not in parallel with
a tender process. Mr Bus said that in order to
facilitate the negotiations and to give both parties
further guidance on the true value of the wreck,
Boskalis would be willing to involve an independent third party expert provided that they had the
appropriate credentials.
75. Underwriters were not inclined to abandon
the tender process, discussions concerning which
with Clarksons were quite well advanced. Discussions between underwriters and Boskalis continued,
particularly with regard to underwriters request
that Clarksons and in due course potential bidders
be given access to the vessel. However on 29
August 2008 Boskalis had for the first time raised
an objection in this regard that inspection of the
vessel might allow competitors to secure valuable
confidential information regarding WD Fairway
even if they had no intention to make an offer. I do
not believe that this objection was put forward in
good faith. The computers had been removed from
the vessel and most if not all of the systems,
machinery and equipment was in fairly standard
form. Mr Webster regarded it as not credible that
any competitor would learn anything of value from
a superficial inspection of a dead ship, and I am not
sure that his evidence was seriously controverted.
Mr Van Leeuwen was sceptical as to whether even
a purchaser would in due course discover any confidential information, although I am prepared to
accept that through the process of repair and subsequent operation a new owner might gain access to
systems, some aspects of which might be proprietary in nature. However at the stage of request for
access to a dead ship for mere inspection, this was
simply obstructive. In this latter regard Boskalis
24
TOMLINSON J]
LLOYDS LAW REPORTS

accept that there was some dragging of heels on its

part. They deliberately put every obstacle in the
way of an inspection by Clarksons taking place
promptly, one example being resort to wholly
unnecessary requests for certified, even coloured,
copies of passports.
76. By 30 September 2008 an impasse had been
reached. In response to underwriters complaint
that Boskalis did not seem to appreciate that it was
not in a position to dictate what did or did not
happen Boskalis took their stance on the position
that ownership of the wreck remained vested in
Boskalis as did all rights of access. In this they were
of course quite correct. At about this time therefore
underwriters formed the view that an ongoing dialogue with Boskalis was unlikely to achieve a positive result and therefore resolved to take formal
steps to elect to take possession of the vessel. Given
the unusual if not unprecedented nature of this step
and the potential liabilities facing all underwriters
on the primary and excess layers, careful consideration had to be given to the means by which ownership would be taken.
77. I should record at this stage that I can understand the reluctance of Boskalis to engage in a
sealed bid process, at any rate if that involved, as
strictly it might, depending on the terms on which
bids were invited, their having no opportunity to
match or to better the highest offer received. Boskalis were concerned that competitors might put forward inflated offers in order to damage them,
although whether they would have put forward
inflated tenders which were capable of clean acceptance must I think be open to question. Nonetheless
I can sympathise with Boskalis reluctance to bid
against themselves. Mr Davis recognised this
dilemma when writing to Mr Street on 18 September 2008 when he said:
Underwriters understand Boskalis suggestion
that competitors may attempt to inflate quotes in
the tender process in order to damage Boskalis.
That said, Boskalis does not have to participate
in the tender process and if, as it suggests, it will
lead to false quotes, then Boskalis would be best
off waiting until the process fails to produce a
realistic figure to make an offer themselves.
I should mention that at the 15 July meeting there
had been discussion of whether the interests of
Boskalis might be protected by a reserve price. It
may be that Mr Davis had this in mind when writing. However that may be, this suggestion was
equally unpalatable to Boskalis, since it involved
the risk that a competitor might in fact bid at a
realistic figure and secure the vessel, without Boskalis having the opportunity to improve upon the
price offered.
78. Underwriters for their part I have no doubt
perceived that a sealed bid process might enure to
[2010]
[QBD (Admlty Ct)
their advantage since it might compel Boskalis, if

they did not wish the vessel to fall into the hands of
a competitor, to participate in the process and to put
in a bid which they calculated as likely to be greater
than any of their competitors would be willing to
pay.
79. I have my doubts whether, had they in fact
proceeded to a sale, Messrs Clarksons would have
advocated the use of a process which precluded the
use of traditional negotiating techniques. I have my
doubts whether Clarksons had appreciated or
thought through the implications of the sealed bid
process which Mr Davis had unequivocally told
Boskalis would be employed, if that is Clarksons
were privy to what Mr Davis had said. Mr Middleton, Managing Director of Clarksons Offshore
and Mr Fairclough, a Clarksons Sale and Purchase
Broker, both gave evidence. Mr Middleton envisaged a global tender as retaining maximum flexibility, however it was described, with the need to
look at it as you go along. He envisaged that it
would always be open to Clarksons to revert to the
underbidder to see if he was prepared to pay more.
Mr Fairclough, prospectively the key broker, was
cross-examined about an email which he sent to Mr
Davis and Mr Kersey on 5 August 2008 outlining
his proposals. This included:
To summarise our discussions in the meeting
we think that we should handle the marketing in
these broad terms:
u We send out a broad prospectus to the
market on the unit and its availability (Boskalis must be included in this distribution). This
prospectus would be sent to all major players
in the Dredging industry as well as any other
parties that we deem likely to be interested.
u A window for inspections is declared and
either your consultant is available on site at
that time or we can assist you with other parties locally available.
u We maintain telephone contact with all
parties to maintain the momentum among
interested parties. At this time we can also sift
out the non-serious Buyers who may be showing interest.
u A closing date for offers is indicated.
u The highest bidder with the cleanest offer
(ie, no subjects) becomes the Buyer; whether
this be Boskalis or not.
When asked in evidence about how this would
work Mr Fairclough said:
I think the key point to maintain in here is the
third bullet point, which is that we maintain telephone contact and we are able to discuss how the
process is developing rather than totally sealed,
totally private and a surprise when the numbers
come in.
[2010]
QBD (Admlty Ct)]

It follows that I have grave doubts whether Clarksons would have embarked upon anything which
could properly be described as a sealed bid process
although Mr Fairclough initially described his five
bullet point procedure in that way. The reality is
that, as Mr Fairclough ultimately accepted, Mr Fairclough regarded the process which he had described
in his five bullet points as involving that the seller
through his broker reserves the right to do whatever
seems in the sellers best interests at any point in
the process.
80. However that may be, I can understand the
concern of Boskalis that they might be disadvantaged by the process which they were led to believe
underwriters proposed to adopt. Market value is
however what someone is actually prepared to pay
on a given day. I can also well understand that it
was underwriters perception that the market value
of this specialised vessel, unique at least in terms of
its size, would be whatever Boskalis was prepared
to pay to keep it out of the hands of their competitors, and that this value might most reliably be
achieved by inviting Boskalis to participate in a
sealed bid process properly so-called. I am not
surprised therefore that the parties found themselves in an impasse. However by exercising their
statutory right to take over the vessel, an incident of
a marine insurance policy governed as were these
by English law, underwriters were in a position to
choose the method of sale. That is the nature of the
contractual bargain, as Mr Davis pointed out in his
letter of 18 September 2008 to Mr Street to which
I referred at para 77 above. It is that entitlement of
underwriters that Boskalis thereafter set out to
frustrate.
Underwriters elect to take over the vessel
81. As the agreed facts relate, in December 2008
Boskalis received from Messrs Stephenson Harwood letters written on behalf of 77.5 per cent of
the primary layer underwriters and 85 per cent of
the excess layer underwriters expressly electing to
take over the interest of the assured in the vessel.
Stephenson Harwood also published a notice in
Lloyds List newspaper advising the shipping community and all those concerned that underwriters
[had] exercised their right pursuant to section 79(1)
of the Marine Insurance Act 1906 to take ownership
and possession of the vessel. The response of
Boskalis was to indicate that they did not regard the
letters as valid elections. They were, they said,
ineffective. They contended that all primary and
excess underwriters must unconditionally agree to
take over the vessel and that if only some underwriters try to do so, there can be no takeover. I
have already explained, at paras 58 to 63 of the
Phase 1 judgment, why I believe that that approach
25
[TOMLINSON J
overlooks that each underwriter has a separate contractual entitlement.

82. On 29 December 2008 Boskalis were served,
both in England and in Holland, with these proceedings. They were given notice of an application
which the claimants intended to make for an injunction restraining the first three defendant Boskalis
companies from selling, transferring or otherwise
disposing of the vessel. They were also given notice
that the claimants were inviting the court to direct
an expedited trial so that, if they were ultimately
successful, the tender process could be got underway as soon as possible. The affidavit in support of
the application, a copy of which was served on
Boskalis, revealed that another major Dutch dredging company, Van Oord, had on 5 November 2008
given a non-binding indication stating that they
were prepared to purchase the vessel for 62 million, albeit Van Oord had not at that stage inspected
the vessel. Although the affidavit did not reveal
this, Van Oord had been supplied with a Condition
Survey report which had in fact been compiled by
Messrs Stephenson Harwood, presumably in reliance upon Mr Websters findings. The report had
appended to it a large number of photographs taken
by Mr Webster during his inspection at Sattahip.
The sale of the vessel
83. The response of Boskalis was swift. As the
agreed facts reveal on 9 January 2009 the first
defendant Westminster International, the registered
owners of the vessel, first caused her registration on
the Dutch Register of Shipping to be deleted and
secondly, sold the vessel to the fourth defendant
Nigerian Westminster. It is accepted that both Westminster International and Nigerian Westminster are
in the majority ownership of companies which are
ultimately 100 per cent owned by the second defendant Royal Boskalis Westminster. Royal Boskalis
Westminster ultimately controls both Westminster
International and Nigerian Westminster. On the
same day Messrs Nabarro, who already acted for
the first three defendants in the action brought by
them to recover interest and/or damages consequent
upon delayed payment of the CTL, wrote to Messrs
Stephenson Harwood in the following terms:
WD FAIRWAY: Claim No: 2008 Folio 1277
We refer to your letters dated 29 and 30
December 2008 enclosing the claim form and
particulars of claim and the Claimants interim
application issued on 26 December 2008 for
injunctive relief.
Our clients have now had the opportunity to
review both the interim application and substantive proceedings and have taken counsels advice
as to whether your clients have validly exercised
LLOYDS LAW REPORTS
26
TOMLINSON J]
their rights under sections 63 or 79(1) of the

Marine Insurance Act 1906 (the Act).
Our clients position is that there has not been
a valid election to take over the vessel because
not all of the underwriters have elected to exercise their section 63 or section 79(1) rights. Specifically, Mr Davis in his affidavit confirms that,
to date, an election has still not been made by
Munis or Generali (Munis alone subscribed to 15
per cent of the primary and excess cover).
In the absence of a valid election under the
above mentioned provisions of the Act Boskalis
has been advised that neither the legal nor the
beneficial ownership of the vessel has transferred
to any of the underwriters. With this in mind, we
are instructed that our clients elected to transfer
the vessel to a Nigerian company. The transfer
was effected today and the vessels details at the
Dutch shipping registry have been struck out to
reflect the transfer.
If underwriters wish to take over ownership of
the vessel they should and could have done so by
making a valid election under section 63 or 79(1)
of the Act and thereby assume responsibility for
settling the associated existing and future liabilities to Boskalis, which are currently quantified in
the approximate sum of 6m. Under section
79(1) the election to take over the vessel could
have been exercised from April 2008 following
belated payment of the CTL but no steps appears
to have been taken to move towards this position
until the end of last year (even then, your clients
purported election was ineffectual for the reasons
already given).
Our clients accept that underwriters are entitled to receive in their respecting proportions the
proceeds of sale or the open market value of the
WD Fairway in its present condition. Our clients
are simply trying to protect their legitimate commercial interests.
In order to try and bring this matter to a satisfactory conclusion for all parties concerned, in
order to establish the market value for the vessel,
we propose the following process:
1. Within 14 days of the date of this letter,
each party appoints its own expert valuer to
assess the value of the vessel.
2. Those valuers enter into appropriate confidentiality agreements in respect of both the
information to which they will have access,
and the nature of their engagement.
3. Within 28 days of their appointment, but
subject to their availability, both valuers are
granted access to the vessel in order to make
an inspection with a view to determining the
open market value. We are instructed that the
[2010]
[QBD (Admlty Ct)
transferee will allow access to the vessel for

this purpose.
4. Within 42 days of their appointment, the
valuers should prepare and simultaneously
exchange reports setting out their assessment
as to the open market value.
5. Within 49 days of their appointment, the
valuers should meet at a mutually convenient
date and location to try and agree or narrow
any gap between their assessments of the open
market value.
6. In the event that the valuers are unable to
agree an open market value for the vessel, and
the parties are not able to agree a value for the
vessel based on the valuers conclusions, the
matter should be determined by a sole arbitrator to be appointed by agreement or in
default of agreement in accordance with the
rules of the London Court of International
Arbitration under which the arbitration should
be conducted in accordance with English
law.
In the circumstances, the Claimants application for an injunction to prevent transfer of the
vessel or creation of an interest over it is redundant and would, in any event, have failed given
that your clients legal rights have not been
infringed and would not have been infringed. As
our clients are no longer the legal owners of the
vessel, this will also substantially affect the substantive proceedings. We do not see that your
clients can have any cause for complaint in circumstances where our clients are content that the
underwriters should receive the benefit of the
vessels market value, assuming of course they
accept the proposal set out above.
In the circumstances, please confirm that the
Claimants interim application will be withdrawn
forthwith. If your clients are willing to accept the
terms of the proposal set out above, we suggest
agreeing a stay of the substantive proceedings
pending the outcome of the procedure to determine the open market value.
84. It is to be noted that this letter did not reveal
that the deletion from the Dutch Registry preceded
the sale, did not reveal that the sale was to an
affiliated company and did not reveal that the consideration was 1,000. It is accepted that the reference to our clients was properly to be understood
as a reference to the first three defendants and in
particular therefore the second defendant, the parent company which it is accepted has assets in
excess of 2 billion. This is of some importance. By
this transaction the first defendant divested itself of
its only asset, and would thereafter have been quite
unable to account to underwriters for the vessels
residual value, even on the most pessimistic view as
[2010]
QBD (Admlty Ct)]

to the extent of that value. The position of the third

defendant can incidentally be ignored. It appears to
have crept into the proceedings as a result of an
error.
85. On 14 January 2009 at a hearing held without
notice to Boskalis David Steel J directed the fourth
defendant forthwith to transfer title in the vessel to
the claimants nominee, WD Fairway Shipping Ltd.
Pursuant to arrangements agreed between the parties to hold the ring pending the outcome of the
expedited trial that transfer has not yet been carried
out.
The decision making process within Boskalis
86. Royal Boskalis Westminster NV operates a
two-tier board system consisting of a Board of
Management and a Supervisory Board. The Board
of Management consists of three members and is
responsible for the day-to-day management of the
business and its long-term strategy. The Supervisory Board is responsible for supervising management performance and advising the Board of
Management. As at January 2009 the three members of the Board of Management were the Chairman, Dr Peter Berdowski, the Chief Financial
Officer Mr J H Kamps, and Mr T L Baartmans. The
decision to transfer the vessel appears to have been
made provisionally by Dr Berdowski at a meeting
with Mr Bus on either 5 or 6 January 2009. However the final decision was made at a meeting on 8
or 9 January attended by Dr Berdowski, Mr Baartmans and Mr Bus. Mr Bus gave evidence about the
decision-making process and was cross-examined
thereon. Boskalis tendered in evidence under the
Civil Evidence Acts a witness statement from Mr
Baartmans. Boskalis were asked to procure the
attendance of Mr Baartmans at trial for crossexamination. Mr Baartmans did not attend the trial.
It is accepted that there was no impediment to his
doing so. Naturally he had other commitments, but
not throughout the period of the trial and not such
as could not easily have been accommodated. Boskalis would have called him had they thought it in
their interest so to do. The same is true of Dr
Berdowski.
87. Mr Baartmans was also a Director of Westminster International BV and he signed the MOA
and protocol of delivery on its behalf.
88. The contractual documents were signed on
behalf of Nigerian Westminster by Mr Slinger. Mr
Slinger was Managing Director of Nigerian Westminster between April 2001 and February 2004,
during which time he was based principally in
Nigeria. In February 2004 he returned to the Netherlands and assumed other duties within the Boskalis Group, although he remained on the Board of
Directors of Nigerian Westminster. As at January
27
[TOMLINSON J
2009 he had responsibility for the international project markets in Area Middle and Area East.
Nigeria is part of Area Middle. I derive the impression that although he remains a director of Nigerian
Westminster his activities in relation thereto now
consist principally in signing on its behalf documents such as payment orders. He confirmed that
he had not attended, even by telephone, any board
meetings of Nigerian Westminster since 2008. Mr
Slingers immediate superior within the Boskalis
organisation to whom he was and is answerable is
Mr Baartmans. Mr Baartmans was, he said, his
boss.
89. Mr Bus told Dr Berdowski on 29 December
2008 about the documents which he had received
concerning this action. In particular Mr Bus told Dr
Berdowski of the indicative offer to purchase the
vessel made by Van Oord. I have no doubt that,
although indicative and non-binding, this will have
come as unwelcome news to Boskalis.
90. Mr Bus asked himself what it was that underwriters were concerned about that had led them to
seek an injunction restraining Boskalis from selling
the vessel. It was the fact that underwriters did not
want Boskalis to transfer the vessel that gave rise to
his consideration of the possibility that Boskalis
should do just that. By the time of his meeting with
Dr Berdowski on 5 or 6 January both men were
clear in their minds that they wished to protect
Boskalis against an involuntary parting with the
vessel. I shall assume that Mr Bus shared all his
thinking with Dr Berdowski and, in due course,
with Mr Baartmans. Boskalis justified their failure
to call Dr Berdowski and Mr Baartmans to give
evidence by suggesting that Mr Bus was the person
in the best position to give the relevant evidence as
to Boskalis purpose in entering into the transfer.
Since he was the architect of the plan and had
conducted all dealings with underwriters, there is I
think on reflection some force in this explanation. I
remain of the view of course that Dr Berdowski and
Mr Baartmans would have been called had Boskalis
perceived it to be in their best interests so to do, but
I do not find it necessary to draw any adverse
inference from their absence.
91. I have not of course seen the legal advice
which Boskalis received in respect of the efficacy
of the election by the majority of the underwriters
in December 2008. However the Nabarro letter of 9
January 2009 says that Boskalis had been advised
that this was ineffective to transfer either legal or
beneficial ownership. The advice, I have little
doubt, related to the position in English law. In
consequence of the advice received Mr Bus thought
that underwriters had not yet made an effective
election to take over the vessel. He knew that in the
event of election by all of the underwriters it was at
the least probable that that would entitle them to
28
TOMLINSON J]
LLOYDS LAW REPORTS

take over ownership of the vessel. He also knew

that the question whether the majority of subscribing underwriters who had already elected to take
over the vessel had thereby become owners of the
ship or had the right so to do was a difficult legal
question and that there was a risk that Boskalis
current understanding as to the inefficacy of an
election by less than 100 per cent of subscribing
underwriters might be held to be wrong. Mr Bus
recognised the need to act quickly. He wanted to act
quickly before the remaining subscribing underwriters elected to take over the vessel. He also
wanted to act quickly before the court had had an
opportunity to make the order which underwriters
sought, ie an injunction restraining transfer.
92. The thinking of Boskalis at this time is summarised in four paragraphs of Mr Baartmans witness statement which with two reservations I accept
as an accurate account. Those paragraphs read as
follows:
5.2 At the beginning of January 2009, I was
aware that the Claimants were trying to take over
Boskalis interests in the vessel and claim possession of it for the purpose of selling it on the
open market. As far as the Board was concerned,
this was not something which Boskalis was prepared to allow, because Boskalis did not want the
vessel to be acquired by one of its competitors.
5.3 I recall discussing the matter in the week
commencing 5 January 2009 with Mr Berdowski
and Mr Bus and it seemed that the only option
available to Boskalis was to carry out a transfer
of the vessel. For the sake of completeness, I
should point out that these discussions and decisions were not recorded in writing.
5.4 The purpose of the transfer was to ensure
that the Claimants could not take ownership of
the vessel and thereafter sell the vessel to one of
Boskalis competitors. If the vessel had been sold
to a third party, Boskalis commercial interests
would have been threatened because the vessel
might have been used in competition to Boskalis.
Also, other vessels might have been built using
the intellectual property which exists in the vessel. In particular the dredging system and automated systems on the WD Fairway were
produced using the knowledge of the Boskalis
group that has been built up over many years
developing dredgers and working in the dredging
industry. I did not want the design of the vessel
or information about how it operated to fall into
the hands of Boskalis competitors.
5.5 Therefore, I agreed to the transfer for
purely commercial reasons to protect Boskalis
interests. Of course, if the vessel were put up for
sale, Boskalis could also have participated in the
tender, but there was no guarantee that Boskalis
[2010]
[QBD (Admlty Ct)
would acquire the vessel. It might be argued that

Boskalis could have paid a very large sum, well
above the vessels legitimate market value, to
ensure that it remained within the Boskalis
group. Boskalis was not, however, prepared to
pay much more than the vessels actual market
value. Mr Bus informed me that we had received
a valuation which stated that the vessel was
worth 25 million or thereabouts.
The two reservations, about which Mr Baartmans
would undoubtedly have been cross-examined,
relate to the purely commercial reasons for which
he agreed to the transfer and the meaning of the
expression legitimate or actual market value.
93. It is however clear from this passage that the
purpose of Boskalis was to prevent underwriters
taking ownership of the vessel and thus controlling
the method of sale. This was something which
Boskalis was not prepared to allow. Mr Bus said
that Boskalis did not want to be forced into a
process that Boskalis did not control. Mr Bus perfectly well understood however that underwriters
either already had or would in all probability
shortly have the entitlement to choose the process
whereby the residual value of the vessel was ascertained, including sale by whatever means they
chose.
94. Boskalis say that their purpose was not to
prejudice underwriters interests. They say that the
real issue between themselves and underwriters was
and for some time had been the value of the wreck.
They say that they believed that the value of the
wreck was ascertainable, and could be established
through valuation without the need for a sale. Boskalis were willing and able to pay to underwriters
the value of the vessel, to be established by whatever method was thought appropriate short of sale
itself. Indeed Mr Bus said that Boskalis did not
believe that a transfer of the vessel to underwriters
would assist underwriters in any way, and did not
believe therefore that the strategy proposed would
prejudice underwriters. In his witness statement he
said that he believed that Boskalis transfer of the
vessel to Nigerian Westminster could well be generous to the claimants in that he believed that,
having transferred the vessel, Boskalis would have
to pay the open market value to underwriters
whereas a public tender could well have achieved a
much lower price, assuming that there was interest
in the vessel. Boskalis followed through this strategy by immediately after the sale suggesting an
independent method of valuation and offering to
pay whatever was decided to be the open market
value of the vessel.
95. I can accept that Boskalis justified to themselves what they did in this way. However I am
quite satisfied that Mr Bus (and for the avoidance of
[2010]
QBD (Admlty Ct)]

doubt Dr Berdowski, Mr Baartmans and Mr Haak)

all realised that this was not the complete picture.
They realised that underwriters either already had
or might be about to acquire the right to choose that
the vessel be sold, whether that should ultimately
be proved to be in their best interests or not. They
knew that underwriters had long since formed the
view, rightly or wrongly, that the best way to
achieve the maximum value of the vessel was to put
her out to global tender. Boskalis were simply
unprepared to countenance that possibility for at
least two reasons. First, they might in order to
prevent the vessel being sold to a third party be
obliged to bid for the vessel an amount in excess of
that which they considered to be the market value.
Secondly, the vessel might in any event find its way
into the hands of a competitor. They were determined to prevent the underwriters from exercising
their entitlement.
96. I am quite satisfied that Mr Bus appreciated
that Boskalis were prejudicing underwriters interests in that they were depriving them, or attempting
to deprive them, of the opportunity to control the
manner of disposal of the vessel. Mr Bus realised
that Boskalis were depriving the underwriters of the
opportunity even to discover whether by an open
market sale they could realise a value greater than
that which Boskalis thought should be attributed to
the wreck, or would by a process of valuation be
ascertained to be the market value. I think it likely
that Mr Bus knew that in this action underwriters
were claiming an order for sale of the vessel by
global tender, although he said he could not recollect reading that in the documents supplied. Even
if not on 29 December, he subsequently read the
documents with care. In any event Mr Bus does
acknowledge that he comprehended that underwriters were asking for an expedited trial to become
owners and he realised that if Boskalis transferred
the vessel to another company Boskalis might prevent the underwriters from making good their claim
to become the owners and take possession of the
vessel.
97. Mr Bus and Mr Berdowski formed the view
on 5 or 6 January that what they proposed to do
might be regarded as sharp because they had
already been put on notice that underwriters
intended to seek an injunction preventing them
from doing it. They decided to transfer the vessel to
a Nigerian company because they considered
Nigeria a notoriously difficult country and we had
no time to find out the exact ins and out(s) of all
available legal systems. The MOA is governed by
Nigerian law and provides for disputes to be
referred to arbitration in Lagos. Mr Bus said that he
was not responsible for the latter two choices of law
and jurisdiction and Mr Haak said that he thought
that they were chosen because the buyers were
29
[TOMLINSON J
Nigerian. Quite where the responsibilities lay may

not much matter. Mr Haak regarded underwriters
attempt to take possession of the vessel as preposterous. He accepted that shortly after he learned of
it he determined that he would do what he could to
prevent it happening, come what may. It is clear
that, looked at in the round, Boskalis thought that
structuring the sale in the way in which they did, ie
to a Nigerian purchaser, subject to Nigerian law and
Nigerian arbitration, would place obstacles in the
way of underwriters seeking to unscramble or to set
aside the transaction which would not be present
were they to sell the vessel to another western
European company on terms governed by a European law and subject to the jurisdiction of a European legal system. It was for broadly the same
reason that the vessel was first deleted from the
Dutch Registry. So long as it remained registered, at
Dutch law delivery could only be effected (and, as
I understand it, title transferred) by notarial deed.
Once deleted, it became moveable property transferable by simple contract. At the very least therefore deletion from the Register, which needed the
approval of the Rotterdam District Court and would
take one or two days, offered the quickest method
of transferring the vessel to a third party. However
the expert evidence also demonstrated that there
was at the least a risk that a Dutch notary presented
with this contract of sale would have raised questions which might have led to his declining to
authenticate the deed, or declining to do so
promptly.
98. In that latter regard the MOA, although nominally on the standard Norwegian Sale Form, is a
curious document. Virtually every standard clause
is deleted, although I accept that in the circumstances some of them would probably have been
inappropriate. A copy of the MOA together with
the protocol of delivery and acceptance were
included in Mr Slingers signature book on 9 January 2009. The MOA had a Post-it note appended
to indicate where Mr Slinger should sign for Nigerian Westminster. Mr Slinger looked at the last and
first pages of the MoA and observed that it was a
document which concerned WD Fairway and that it
related to Nigerian Westminster. Mr Slinger did not
take in that it was an agreement for sale. He knew
in general terms that WD Fairway had been a CTL
and that, after some delay, Mr Bus had been successful in collecting the insurance proceeds. Mr
Slinger saw that his boss Mr Baartmans either was
going to be a co-signatory of the document or had
already signed it. Mr Slinger called Mr Bus whom
he knew to be responsible for matters concerning
WD Fairway and asked him what the document was
about. Mr Bus said that it was something which had
to be attended to and asked him to sign it. Since Mr
Slinger knew that Mr Bus was responsible for what
30
TOMLINSON J]
LLOYDS LAW REPORTS

was going on in relation to WD Fairway and since

his direct boss Mr Baartmans was a co-signatory he
signed the document without further ado. It was of
no interest or concern to Mr Slinger what the document contained and he did not regard it as his
responsibility to read it or to check it, still less to
consider whether it was in the interests of Nigerian
Westminster that he sign it on their behalf. The
reality, as Mr Slinger confirmed, was that although
it was not Mr Baartmans who had asked him to sign
this document, if Mr Baartmans were at any time to
ask him to sign a document which concerned Nigerian Westminster he would do so. Mr Slinger knew
nothing about underwriters assertions, rights or
possible rights and did not know what was the
effect of the document he was signing.
99. Mr Devinck, based in Nigeria, is and was in
January 2009 Managing Director of Nigerian Westminster. He was told on the afternoon of Friday 9
January in his office in Lagos that Nigerian Westminster would shortly receive a request to transfer
1,000 for the purchase of WD Fairway. He knew
that WD Fairway was the largest dredger in the
world and that she had been damaged in a collision
and that insurance monies had been paid. It was the
first he knew of any intention to transfer the vessel
to Nigerian Westminster. He did not consider that
he or Nigerian Westminster were being given a
choice in the matter it was a transfer that had
been decided upon in Papendrecht, the Boskalis
Head Office, by which of course he meant that the
decision had been made by the parent company. He
authorised the payment, signing the relevant bank
transfer on the following Monday morning. He
realised that 1,000 bore no relation to the value of
the wreck, whatever that might be. He had no idea
why that amount had been chosen. Since this was
an inter-company transaction he gave no particular
thought to it being a transaction at an under value
although he appreciated that even the scrap value
would be greatly in excess of 1,000. He gave no
consideration to the question whether the transaction was in the interest of Nigerian Westminster. He
assumed that that kind of thing would have been
thought through in Papendrecht and that this was a
solution. Mr Devinck was content to do whatever
Boskalis in Papendrecht required and did not
believe that he had any choice in the matter, as
indeed ultimately he did not. Mr Devinck knew
nothing about underwriters assertions, rights or
possible rights.
Valuation
100. I have already referred to the two expert
witnesses whose evidence I heard, Mr Webster and
Mr Van Leeuwen. Each had produced an individual
valuation at an earlier stage in the story. Their
experience was very different. Mr Van Leeuwen is
[2010]
[QBD (Admlty Ct)
a highly experienced sale and purchase broker, with

33 years experience in dealing with dredging vessels. There can be no doubt that Boogaard Sliedrecht BV of which he has since 1998 been the
Managing Director is the leading specialist dredge
broker, indeed the only specialist dredge broker in
Europe, and Mr Van Leeuwens work has not
unnaturally included the provision of valuations.
Mr Webster by contrast is a marine engineer and
naval architect by training, who has seagoing
experience as a Chief Engineer including on oceangoing hopper dredgers. Since leaving the sea he has
worked extensively in the dredging industry as a
Technical Superintendent managing the construction and operation of dredging fleets. Between 1972
and 1978 that experience was in Europe. In 1978 he
moved to the United States since when he has
continued to work in the same field worldwide. His
work has also included the provision of valuations,
although not on anything like the same scale as has
Mr Van Leeuwens.
101. WD Fairway is a trailing suction hopper
dredger of 230 m LOA, 60,000 tonnes dwt, over
13.5 m draft and 35,000 m3 hopper capacity. Vessels of this type and size are known within the
industry as mega hopper dredgers and are few in
number. In 2007 when she was damaged WD Fairway was the largest of the only two (or possibly
three) comparable vessels then in service. Such
vessels have the ability to dredge up to a depth of
55 m, transport material over great distances and
are especially suited for large scale land reclamation projects, such as those carried out in Hong
Kong, Singapore, the Arabian Gulf and the Maasvlaakte in Holland. The latter is a massive harbour
expansion scheme in Rotterdam on which Boskalis
and Van Oord are working together as joint venture
partners. As a class of vessels mega hopper dredgers are also unique in that they are capable of
handling offshore contracts, including dredging
entrance channels to deep water harbours, trenching, pre-sweeping and back-filling pipelines and are
also capable of being dynamically positioned.
There are two major types of dredger, trailing suction hopper dredgers and cutter suction dredgers.
Cutter suction dredgers cut material and transfer the
cut material by pipeline to shore. Hopper dredgers
remove the material from the seabed by suction and
store it on board the dredger in the hopper, and
transfer the material depending on the requirements, for example it may dump the material at sea
or may use the material for land reclamation projects. Mega hopper dredgers are extremely versatile
in the manner that dredged material can be discharged. Dredged spoil can be dumped through two
rows of large bottom doors, located on either side
of the duct keel. The hopper well can also be
discharged by using suction valves located in an
[2010]
QBD (Admlty Ct)]

emptying channel through the duct keel and serial

in-line inboard dredge pumps. The material can
then either be discharged over the bow through a
discharge coupling, or by rainbowing using a large
nozzle. Whilst this characteristic is shared by many
hopper dredgers, the fact that it can be done with
35,000 m3 of material in one discharge is not.
102. As at May 2009 there were only four or
possibly five similar units in operation, albeit three
more were under construction. All available units
were fully employed.
103. The global private, ie non-nationalised,
dredging market is dominated by four companies,
Boskalis and Van Oord in Holland, DEME Group
(Dredging International NV) and Jan de Nul in
Belgium. With one possible exception, the Hyundai
Goryo 6 HO which Mr Webster classed as a mega
but whose deadweight looks to me too small for
that designation and whose hopper capacity I do not
know, all the mega hopper dredgers are owned by
the big four, as these companies were described by
Mr Van Leeuwen and as, I suspect, they may generally be described in the trade.
104. Dredging vessels, particularly those maintained to a high standard by the big four, typically
have a working life of between 25 and 30 years and
occasionally as much as 40 years. Historically,
major dredge operators retain their equipment
whatever the market conditions. Thus much of
Boogaards work is, and has been since the industry
became dominated by the big four, concerned with
sales of second-hand dredgers between dredging
companies other than the big four. In recent times
Boogard has done very little work for the big four
companies, other than the provision of valuation
reports, because those companies retain and modify
their existing equipment and, historically, have preferred to build and buy new buildings rather than to
make acquisitions in the second-hand market. A
mega hopper dredger has never before been sold as
a second-hand vessel. Indeed as I understand it no
jumbo hopper dredger has ever been sold as a
second-hand vessel either, the jumbo size having a
draft between 10.5 and 13.5 m and a hopper
capacity of between 16,000 and 25,000 m3.
105. There are however other major dredging
companies around the world which are not included
amongst the big four which dominate national
dredging markets. They include China Harbour
Engineering Co in China, Dragages Ports in France,
Inai Kiara Sdn Bhd in Malaysia, Great Lakes
Dredge and Dock Co in the USA, Rohde Nielsen
A/S in Denmark, Huta Marine Works Ltd in Saudi
Arabia and Dredging Corporation of India Ltd.
There are also many smaller dredging companies
31
[TOMLINSON J
around the world for whom Boogard acts, some of

which are listed in an appendix to the Venmar
valuation certificate of 9 June 2008. They include
companies in Bahrain, Israel, Qatar, Saudi Arabia,
China, Japan, South Korea, Malaysia, Taiwan, Germany and the USA.
106. Unlike the conventional shipping markets
that are driven by freight rates, the dredging market
is influenced by world tenders and fixed price contracts, and the value of dredging equipment does
not fluctuate in the same way as other trading
vessels.
107. In 2006 to 2007 there was a boom in the
dredging market, fuelled by large dredging projects
in the Middle East and Far East. At around this
time, there was an increased programme of investment in the new building of dredgers and the modification of existing dredgers. There was also an
increased market in sale and purchase of secondhand equipment, although not amongst the big four
companies, because as already remarked they do
not usually participate in the second-hand sale and
purchase market. According to Mr Van Leeuwen
since November 2008 there has been a noticeable
decline in the dredger sale and purchase market and
in the orders for new buildings which he considers
reflects the global economic downturn.
108. The experts were both able to identify projects, notably in the Middle East, which have been
cancelled, or perhaps postponed, in the current
global economic conditions, and Mr Van Leeuwen
was naturally cautious about prospects for the
future. He did not suggest that the dredging industry had as yet suffered. Indeed he confirmed that the
market has so far been in good health, not just in
general for the dredging industry but also for the
large trailing suction hopper dredgers for land reclamation projects and beach nourishment. He said
that his expectation was that sooner or later there
would be a decline in the dredging industry in
general and also for the large mega trailing suction
hopper dredgers, and he referred to a report of ING
Bank which apparently takes a similar view. There
are obviously some uncertainties. On the other hand
the published material which Mr Webster produced
painted a picture of an industry in rude good health,
with the big four reporting the securing of big new
orders spread geographically over a number of continents which has compensated for projects which
have been cancelled.
109. Mr Van Leeuwen accepted that a number of
the major dredging companies outside the big four
might well be interested in acquiring and repairing
WD Fairway. In particular, he mentioned China
Harbour Engineering Co and Great Lakes Dredging
and Dock Co in the USA, which operates worldwide and is not therefore subject to the constraints
32
TOMLINSON J]
LLOYDS LAW REPORTS

of the Jones Act which requires dredging activities

in US navigable waters to be carried out by
US-built vessels only. Mr Van Leeuwen thought
that Hyundai of South Korea might also be interested. A particular incentive for a Far Eastern purchaser is that repairs can be carried out very much
more cheaply in China or Malaysia and possibly
Korea than would normally be the case in Europe or
in Singapore where the big four carry out repairs to
Western European standards. Mr Van Leeuwen had
particular reasons for regarding as unlikely buyers
some of the other companies listed by Mr Webster
as possibly interested purchasers.
110. It was impossible within the confines of the
expedited trial to examine the question of repair
costs on anything other than a superficial level. I am
conscious that in the forthcoming action in which
Boskalis seek to recover interest and/or damages
for delayed payment of the CTL there will be an
examination of this issue, albeit not with a view to
determining what should now be regarded as the
reasonable cost of repairing the vessel. However
the fact that underwriters have agreed and paid a
CTL does not of itself preclude underwriters from
seeking now to establish that the cost of repairing
the vessel would be less than the estimates upon
which they were at an earlier stage content to rely,
and it must be borne in mind that certain of the
costs which properly were taken into account in that
exercise as estimated figures have now been
incurred or, as the case may be, avoided, so that
they do not form part of the cost which a purchaser
would have to bear in order to repair the vessel.
When putting forward their claim for a CTL Boskalis relied upon an Intermediate Survey Report and
Repairs Estimate of 23 March 2007 prepared by
Messrs Van Woerkom, Nobels and Ten Veen
(WNV) of Sliedrecht. The surveyors attended the
vessel where she lay off Tianjin resting on the
bottom in a partly sunk condition. Their repair
estimate, presented in one page and at a very high
level of generality, based on repairs at Singapore,
amounted to 91.4 million. This included an item
for unforeseen contingencies of 10 million, 12.5
per cent of the preceding subtotal, 1.75 million for
transport of the dredger from Tianjin to a Singapore
repair yard and on her own keel back to Tianjin
after repairs and 560,000 for preservation of components after salvage. Messrs Noble Denton were
asked by underwriters to comment and they
inspected the vessel both at Tianjin and later whilst
she was in dry dock in Quinhuangdao, China. Ultimately they reached a figure of 58.8 million. In
their report they pointed out that a more accurate
method of estimating the cost of repair than had
been employed by either WNV or themselves was
to prepare a detailed scope of work and then to ask
suitable shipyards to quote for the repair based on
[2010]
[QBD (Admlty Ct)
the scope of work. This has not yet been done. It is

of course likely, and it was indeed asserted, that
Boskalis has sufficient in-house expertise and dialogue with suppliers and shipyards to form their
own view of what repairs to their own standards
might cost. Mr Webster inspected the ship afloat at
Sattahip. He found the condition of the vessel much
better than he expected. Boskalis had, as one would
expect, carried out extensive and highly professional cleaning and preservation measures whilst
the vessel was in dry dock, particularly in the vessels engine room, which had been totally flooded.
There is an issue as to the extent of the work carried
out and as to the extent of the replacement which
would in due course be necessary. I cannot now
resolve it. Not all of the relevant documents were
available at the hearing although I understand that
Boskalis has in the past made them available to the
lead primary layer underwriter Fortis. Mr Webster
had in May 2008 carried out his own exercise to
estimate the cost of repairs and he came up with a
figure of 66.5 million which included supervisory
crew for 18 months and a figure of 10 million for
contingencies. Mr Webster had very great experience in these matters. I have the utmost confidence
in his evidence, which was given in a very straightforward manner. He had an objectivity born of his
long practical experience.
111. As I have indicated I cannot on the basis of
the exercise thus far conducted reach a reliable
conclusion as to what will be the cost of repairs,
and the parties did not expect me to do so. The
likely cost of repair will undoubtedly be a factor
which will influence the level at which any potential purchaser will bid. However it is not the uncertainty concerning repair costs which in my view
precludes valuation.
112. In my view no process of valuation short of
an attempted sale process will be likely to produce
a reliable figure which the court can in fairness
direct Boskalis to pay. Of course, if for whatever
reason it ultimately proves impossible to put the
vessel up for sale in a manner which will properly
test the market, the court would be driven to do its
best, unsatisfactory though that would be. That situation has not yet arisen and if it did different
considerations might be in play, affecting the
courts perception of how any inherent uncertainties ought properly to be resolved.
113. Both Mr Webster and Mr Van Leeuwen put
forward valuations. I do not regard either valuation
as reliable. I have already pointed out that when
giving his valuation in May/June 2008 Mr Webster
gave it as his opinion that in order to obtain the
maximum value for the hopper dredge she should
be put out for world tender. He gave no indication
in his valuation certificate how his subsequent figure of 75 million had been reached. However in
[2010]
QBD (Admlty Ct)]

his expert report for the trial he explained that given

the lack of any previous sales, the valuation was
necessarily a book value estimate based upon an
initial newbuilding cost and straight-line depreciation, taking into account the lengthening of the
vessel in 2003. He went on to explain that a book
valuation is no more than a rough guide as to what
the vessel is worth on the open market and said that
in consequence he had stated in his valuation
certificate that, in order to obtain the maximum
value for the dredge, he recommended that the
vessel be put out for a worldwide tender. During his
evidence he explained that for the purposes of this
exercise he had relied upon figures for the newbuilding cost at Verolme Shipyard in 1997 and for
the cost of jumboisation at Sembawang Shipyard in
2003 which he had obtained from confidential
sources in Holland. Given the extraordinary mutual
suspicion and distrust between owners and underwriters, of which Mr Webster was no doubt aware,
it does not altogether surprise me that Mr Webster
thought it unlikely that he could obtain this information in a more orthodox manner, but as it happens resort to these means was both unnecessary
and in the event misleading. The relevant figures
had been supplied by Boskalis to Messrs Holman
Fenwick and Willan who were handling the salvage
claim on their and underwriters joint behalf, and
the figures obtained by Mr Webster were too high
by some margin. He had been informed that the
newbuilding cost was 120 million and the cost of
jumboisation 60 million whereas the correct figures were in fact 75 and 41 million respectively.
Mr Webster had written down over a conventional
25-year lifecycle, a perfectly standard accounting
approach notwithstanding the unit might well have
a significantly longer life. He had however continued to apply the same annual depreciation charge
after 2003 as before, not therefore taking into
account in the calculation of the annual charge the
cost of jumboisation. He agreed that he might well
have adjusted the charge. However that might be,
his calculation produced a figure of 75.1 million in
May 2008. At trial in 2009 he was inclined to take
off another 10 million to reflect deterioration over
the intervening more than one year. Mr Weitzman
for Boskalis naturally pointed out that the same
calculation carried out by reference to the correct
newbuilding and jumboisation costs would produce
a figure of 25.5 million as at May 2008, which
would reduce to 22 million if a similar percentage
were deducted to reflect deterioration between then
and May 2009. Mr Weitzman was also critical of
Mr Webster for his having failed to alert underwriters to the possibility that the figures upon which
he had based his valuation were unreliable. No
doubt it would have been preferable had Mr Webster explained to underwriters the precise basis
33
[TOMLINSON J
upon which he had prepared his valuation. However it must be remembered that Mr Webster never
himself regarded his valuation as more than a rough
guide to what the vessel was worth on the open
market, which is why he recommended that she be
sold on the open market. He was no doubt confident
in his informant. The short point for present purposes however is that a book value is merely an
accounting tool, which may frequently bear no relation to the actual value and takes no account of
market sentiment. It seems to me that having regard
to the dynamics of the current worldwide dredging
industry a book valuation is of little real assistance
in forming a view as to the current open market
value of the vessel.
114. It is fair to say that Mr Van Leeuwens
valuation of January 2008 was no more forthcoming than had been the Venmar valuation certificate
in indicating how the figure of 23 million to 27
million had been reached. The operative part of the
valuation report read:
Owners request is to assess the appropriate
market value in condition afloat as is, where is
Sattahip, Thailand.
The damage to the tshd is unprecedented, consequently references have not been recorded nor
known to the dredging industry.
Taking into consideration:
u the age of the vessel,
u the excessive damage reported,
u the remaining economical lifetime,
the assessment is in the range of:
23 million to 27 million
whereby, we reach the conclusion that, based
on standards of maintenance, operation and
employment, customary in the Western European
dredging industry, the tshd WD Fairway is
assumed economically beyond repair.
Mr Van Leeuwens expert report prepared for the
trial seemed to suggest that some reasoned basis
had been adopted in reaching this value but on
analysis and investigation this proved not to be the
case. He mentioned the scrap value as a starting
point but it turned out that that played no part. He
mentioned a quotation recently issued by the Dutch
shipyard IHC for a newbuilding which he regarded
as comparable to WD Fairway modern construction techniques can achieve similar hopper capacity
with less deadweight tonnage. This quotation was
200 million. He then reasoned that a Western
European buyer would not be interested in purchasing WD Fairway when a newbuilding could be
commissioned for 200 million and would have a
longer life. He assumed for this purpose repair costs
of 100 million and that both repair of WD Fairway
and commissioning of a newbuilding would take
approximately two to three years. He then went on
34
TOMLINSON J]
LLOYDS LAW REPORTS

to say that the vessel might be of interest to Asian

or Chinese purchasers, because such purchasers
will use cheaper parts and materials and have
cheaper labour costs. He concluded:
In January 2008, I ultimately came to the view
that the vessel was worth in a damaged condition
2327 million. At this price, I believe that the
vessel will be of interest to a far eastern purchaser if they could reduce the estimated reconstruction cost so that their total expenditure
(including the purchase price) would be around
100 million.
115. I have already commented on the question
of repair costs. It cannot be assumed that 100
million is a reliable figure. I think it likely on the
basis of the evidence that an Asian or Chinese
purchaser would by a significantly lower expenditure be able to restore the vessel to an acceptable
standard. Indeed inherent in Mr Van Leeuwens
valuation is the possibility that a Far Eastern purchaser might be able to repair the vessel for about
US$75 million, and that presupposes that the appropriate starting point for a Western European purchaser would be of the order of 100 million.
Furthermore Mr Webster thought that the repairs
should only take of the order of 18 months and I
think that on such a matter he is likely to be right.
There is also room for significant doubt whether a
vessel with capabilities comparable to the Fairway
could be built for 200 million. Inevitably there
was discussion whether the somewhat different
equipment on the vessel for which IHC quoted was
at the end of the day equivalent in its capacity,
versatility and usefulness. On any view the vessel
for which IHC quoted lacked a dynamic positioning
system. Mr Van Leeuwen had himself carried out a
calculation using an industry standard pricing formula (CIRIA, although no one could tell me for
what this is an acronym) which suggested that the
newbuilding cost of a comparable vessel would be
218 million without spare parts, which with spare
parts would suggest a cost of the order of 230
million.
116. All this discussion is however a little beside
the point in the context of Mr Van Leeuwens
valuation because he accepted that the figure of 23
million to 27 million was the product of no calculation at all. It was he said based on the market of
experience. On the basis of a willing buyer and a
willing seller, it represented the figure which Mr
Van Leeuwen would advise a buyer he ought to be
prepared to pay. With the greatest of respect to Mr
Van Leeuwen it seems to me that this was little
more than a guess, as was the figure of 20 million
to 22 million which he considered appropriate as
at the date when he gave evidence at trial. Mr
Weitzman was inclined to invest the evidence of Mr
Van Leeuwen with an infallibility which I do not
[2010]
[QBD (Admlty Ct)
consider justified. The conclusion is inescapable

that there is no special significance in his suggested
value, which could as it seems to me prove to be
either a significant underestimate or a significant
overestimate, although the lengths to which Boskalis have gone in an attempt to keep the vessel out of
the hands of their competitors suggests to me that
the former is more likely than the latter.
117. In truth, as it seems to me, what a purchaser
will be prepared to pay may depend upon many
factors. Boskalis is concerned to prevent an outsider from breaking into the market for mega hopper dredgers, and I suspect that their concern is
shared by the other big four companies. Mr Van
Leeuwen had not given any consideration to this
point and he was unable to justify his opinion that
the big four would not be prepared to pay a premium in order to avoid the vessel falling into, eg
Chinese hands. He said that the point could be
investigated by making a telephone call to the big
four companies but this statement struck me as a
surprisingly naive approach. Just as an outsider
might well be prepared to pay a significant premium in an attempt to break into the market, so as
it seems to me one or other of the big four and in
particular Boskalis may be prepared to pay a significant premium to keep the vessel out of the hands
of an outsider. Equally, one or other of the big four
companies might find it attractive to deprive Boskalis of the opportunity of repairing the vessel and
redeploying it in competition with them. The attraction of the vessel may well depend on such matters
as the nature of a companys current and anticipated
commitments and the nature of the financing currently available to them. It is particularly clear that
Boskalis considers that an outside company would
by acquiring, repairing and operating this vessel
gain a valuable insight into aspects of their operational capability which they regard as confidential.
The possibility of a mega hopper coming onto the
open market is a truly unique event in the dredging
industry. It will represent a unique opportunity. In
the circumstances it is simply not possible to come
to a reliable estimate as to her current open market
value without testing that market. Mr Van Leeuwen
recognised that the exercise he was being asked to
conduct was entirely hypothetical, essentially
because there is as yet no market, still less if this is
not a tautology, one with a willing seller. Without a
market it is meaningless to talk of market value.
The court lacks any useful yardstick by reference to
which to value a unique artefact, unique not in its
essential characteristics but in its availability for
purchase.
118. As I have already related one of the other
big four companies has in fact already shown an
interest in acquiring the vessel. On 5 November
[2010]
QBD (Admlty Ct)]

2008 Mr Bunschoten of Van Oord wrote to Mr

Fairclough of Clarksons as follows:
. . . We refer to our previous contacts and the
documents you have forwarded us.
You have asked us to confirm interest in the
purchase of the vessel.
However we are not yet in the position to
make you a binding offer based on the information received by us. The reasons for this are the
following:
u We have not yet been able to visit the
vessel. An actual visit is necessary in order to
assess the current state of the vessel.
u The majority of the suppliers of the main
components of the vessel have refused to give
us information and to answer our questions
regarding same essential components.
u A condition measurement of the engines
is necessary in order to be able to assess the
state of these engines and its auxiliaries.
However we are willing and able to give you
an indicative non-binding offer for the vessel.
Please bear in mind that the price quoted could
change after visiting the vessel and receiving the
missing information. Our non-binding indicative
offer is 62 million.
119. It is strange that the majority of the suppliers should have behaved as described, but it is I
suppose possible that they regarded themselves as
under some restraint of confidence. The matter was
not explored in evidence.
120. Mr Bus told Dr Berdowski about this offer
on 29 December 2008. On 23 January 2009 it was
withdrawn, ostensibly because on inspection the
vessel was found to be more severely damaged than
expected. The email communicating the withdrawal
of the indicative offer to Clarksons read:
After having inspected the vessel on 20 January at Sattahip, Thailand we must conclude that
the damage is much more severe than we
anticipated.
In particular the extensive damage to the auxiliary equipment and the electrical systems, as well
as uncertainty with regard to the main engines,
has caused our estimated repair costs to increase
indicative with 3035 million.
We are therefore not in a position to maintain
a bid as indicated in our earlier letter of 5
November.
121. Strangely this email was also sent by Van
Oord directly to Mr Bus, whose sole involvement
had according to him been to facilitate arrangements for the inspection. It was not he said his
decision to allow that inspection, which decision
35
[TOMLINSON J
must he said have been made by Dr Berdowski or

by Mr Baartmans or by both of them. Mr Bus could
offer no explanation as to why the email had been
sent to him.
122. Mr Fairclough was surprised at the withdrawal of Van Oords indicative offer and accordingly arranged a meeting to discuss the matter with
Mr Bunschoten and Mr Voorwinde, the latter being
the sender of the 23 January emails. It took place at
the Van Oord offices in Rotterdam on 6 February
2009. Mr Voorwinde and Mr Bunshchoten
informed Mr Fairclough that, despite withdrawing
their indicative offer and the possible deterioration
of the vessel, Van Oord remained interested in purchasing the vessel and would like to be kept
informed of her status. It was never explained to Mr
Faircloughs satisfaction in what respect the condition of the vessel in fact differed from what Van
Oord could reasonably have expected from the
report and photographs which they studied before
giving their initial indicative offer. Mr Fairclough
attempted to extract an explanation as to what precisely the additional 30 million to 35 million
repair cost related but Mr Voorwinde and Mr Bunschoten gave him no satisfactory explanation. Mr
Fairclough specifically asked Mr Voorwinde and
Mr Bunschoten why the email of 23 January had
been sent to Mr Bus as well as to himself. Mr
Bunschoten asked to see a copy of the email, which
Mr Fairclough did not have with him. Mr Fairclough was however able to tell Mr Bunschoten that
he had seen with his own eyes the email which had
been sent by Mr Voorwinde, who was of course
also present at the meeting. Mr Fairclough pointed
out that communication with Boskalis in this way
was not what the parties had had in mind when the
earlier indicative offer was made and suggested that
perhaps there had been collusion. Mr Voorwinde
and Mr Bunschoten did not suggest that the word
collusion was inappropriate and indeed, according
to Mr Fairclough, there was a positive reception to
that word. Mr Bunschoten and Mr Voorwinde
agreed that there had been discussions between Van
Oord and Boskalis. There was mention of the
vested interest in keeping the unit under European
control. Further than this there is no evidence as to
the content of the discussions between Van Oord
and Boskalis. Van Oords indication at 62 million
was given on 5 November 2008. I suspect that the
figure may well have been derived from the
accounts as at 31 December 2007 of Westminster
Fairway BV, the relevant Boskalis operating company, in which the book value of the vessel was
given as 62.2 million. Boskalis say that these
accounts were issued, by which I understand to
mean published, on 31 October 2008.
36
TOMLINSON J]
LLOYDS LAW REPORTS

The jurisdiction under the Insolvency Act 1986

123. I turn then to the jurisdiction under the
Insolvency Act 1986. The relevant provisions are as
follows:
Part XVI
Provisions Against Debt Avoidance (England and Wales only)
423 Transactions defrauding creditors
(1) This section relates to transactions entered
into at an undervalue; and a person enters into
such a transaction with another person if:
(a) he makes a gift to the other person or he
otherwise enters into a transaction with the
other on terms that provide for him to receive
no consideration;
(b) he enters into a transaction with the
other in consideration of marriage [or the formation of a civil partnership]; or
(c) he enters into a transaction with the other
for a consideration the value of which, in
money or moneys worth, is significantly less
than the value, in money or moneys worth, of
the consideration provided by himself.
(2) Where a person has entered into such a
transaction, the court may, if satisfied under the
next subsection, make such order as it thinks fit
for:
(a) restoring the position to what it would
have been if the transaction had not been
entered into, and
(b) protecting the interests of persons who
are victims of the transaction.
(3) In the case of a person entering into such a
transaction, an order shall only be made if the
court is satisfied that it was entered into by him
for the purpose:
(a) of putting assets beyond the reach of a
person who is making, or may at some time
make, a claim against him, or
(b) of otherwise prejudicing the interests of
such a person in relation to the claim which he
is making or may make.
...
(5) In relation to a transaction at an undervalue, references here and below to a victim of
the transaction are to a person who is, or is
capable of being, prejudiced by it; and in the
following two sections the person entering into
the transaction is referred to as the debtor.
424 Those who may apply for an order
under s 423
(1) An application for an order under section
423 shall not be made in relation to a transaction
except:
[2010]
[QBD (Admlty Ct)
(a) in a case where the debtor has been

adjudged bankrupt or is a body corporate
which is being wound up or [in its administration], by the official receiver, by the trustee of
the bankrupts estate or the liquidator or
administrator of the body corporate or (with
the leave of the court) by a victim of the
transaction;
(b) in a case where a victim of the transaction is bound by a voluntary arrangements
approved under Part I or Part VIII of this Act,
by the supervisor of the voluntary arrangement
or by any person who (whether or not bound to
do so) is such a victim; or
(c) in any other case, by a victim of the
transaction.
(2) An application made under any of the paragraphs of subsection (1) is to be treated as made
on behalf of every victim of the transaction.
425 Provision which may be made by order
under s 423
(1) Without prejudice to the generality of section 423, an order made under that section with
respect to a transaction may (subject as
follows):
(a) require any property transferred as part
of the transaction to be vested in any person,
either absolutely or for the benefit of all the
persons on whose behalf the application for
the order is treated as made;
...
(2) An order under section 423 may affect the
property of, or impose any obligation on, any
person whether or not he is the person with
whom the debtor entered into the transaction; but
such an order:
(a) shall not prejudice any interest in property which was acquired from a person other
than the debtor and was acquired in good faith,
for value and without notice of the relevant
circumstances, or prejudice any interest deriving from such an interest, and
(b) shall not require a person who received
a benefit from the transaction in good faith, for
value and without notice of the relevant circumstances to pay any sum unless he was a
party to the transaction.
(3) For the purposes of this section the relevant
circumstances in relation to a transaction are the
circumstances by virtue of which an order under
section 423 may be made in respect of the
transaction.
124. I have set out subsection 425(2) partly in
order to demonstrate that it is of no application in
the present case. Westminster International was
here the person who entered into the transaction and
[2010]
QBD (Admlty Ct)]

thus the debtor. Nigerian Westminster has acquired

its interest in the vessel from the debtor having been
party to the contract of sale. It is thus irrelevant to
the applicability of the statute whether Nigerian
Westminster is a bona fide purchaser for value without notice of the relevant circumstances. Likewise,
it is by necessary implication irrelevant to the exercise of the courts discretion that Nigerian Westminster was a bona fide purchaser for value without
notice of the relevant circumstances, if indeed it
was. I would accept that in some cases it may be
relevant to the exercise of the courts discretion if it
is established that the party to the transaction with
the debtor did not act in good faith or give value. In
the present case however given the relationship
between Westminster International and Nigerian
Westminster, the circumstances in which Mr
Slinger formally signed the contract on Nigerian
Westminsters behalf and the fact that this was an
intra-group transaction for a consideration which
was only symbolic, any enquiry into the extent to
which the knowledge of the Royal Boskalis executives can properly be attributed to Nigerian Westminster seems to me of peripheral relevance. I do
not therefore propose to make formal findings on
the question whether Nigerian Westminster acted in
good faith or, if it is a different question, without
notice of the relevant circumstances. Furthermore I
do not propose to address the question whether in
the context of this statutory jurisdiction Nigerian
Westminster should be regarded as having given
value. I have found all the necessary facts. If Nigerian Westminster did act without notice of the relevant circumstances, it can only be in consequence
of the application of a rule of law concerning the
attribution of knowledge. The purpose of Boskalis
was to cause prejudice to the claimants by putting
the vessel beyond their reach. They did so in a
manner which they realised would be perceived as
sharp.
125. Boskalis naturally points to the following
considerations:
(i) The provisions are contained within an
Insolvency Act;
(ii) Part XVI in which they appear is entitled
provisions against debt avoidance; and
(iii) The marginal title of section 423 is transactions defrauding creditors.
There is here of course no insolvency, although
Westminster International divested itself of its only
asset, or its only substantial asset. Nonetheless Boskalis did not intend to deprive underwriters of
financial redress if and in so far as underwriters
entitlement which they sought to frustrate was
capable of being quantified by a valuation
process.
37
[TOMLINSON J
126. However as Boskalis rightly acknowledges

the jurisdiction is not expressly made conditional
upon a formal insolvency. The legislative forebears
of this section go back to the Act against Fraudulent
Deeds, Gifts and Alienations 1571. The Cork Committee Report on Insolvency Law and Practice
(1981 Cmnd 8558) observed at para 1204 that
resort to the statute of Elizabeth I and its replacement section 172 of the Law of Property Act 1925
is normally unnecessary unless the debtor is unable
to pay his debts without recourse to the property
disposed of, so that the remedy is seldom if ever
invoked unless the debtor has in fact become insolvent, but the present case is far from normal. It is
the essence of the case that Westminster International wished to put its assets, ie the vessel, beyond
the reach of underwriters. It is not in dispute that
invocation of the jurisdiction is in the present circumstances novel, but those circumstances are
four-square within the circumstances prescribed
and required for the availability of the statutory
jurisdiction.
127. Boskalis submits that exercise of the jurisdiction under section 423 will in circumstances
such as the present undermine the long established
rules of law whereby it is determined whether proprietary interests are acquired. It seems to me that
Parliament by section 425(2) prescribed the limits
within which any such argument should prevail. It
cannot avail a direct purchaser from the debtor. In
any event in the present case where the court is
concerned with an intra-group sale for symbolic
consideration where the property has remained
within the same ultimate control the suggested consideration is in my judgment of very little weight.
Boskalis also say that the claimants are seeking to
use section 423 in order to obtain a proprietary
interest in the vessel which they would not otherwise have. However in relation to this argument it
is relevant to notice that had the vessel been situate
in England the electing underwriters would have
acquired a proprietary interest, as I explained in my
Phase 1 judgment. The intra-group sale was carried
out clandestinely in order to forestall the exercise
by the remaining underwriters of their right to elect.
English law was the system of law which the parties
chose to regulate their relationship and which
would alone have been relevant had the vessel been
situate in England. In any event, underwriters are at
this stage of the argument seeking to give effect to
a contractual right.
128. In Inland Revenue Commissioners v Hashmi
[2002] 2 BCLC 489 the jurisdiction was successfully invoked in a case where there was no formal
insolvency, although had the deceased debtor lived
and his dishonesty come to light there might well
have been. Arden LJ pointed out at pages 503 and
38
TOMLINSON J]
LLOYDS LAW REPORTS

504 that the Cork Committee whose report preceded enactment of the current statute recommended that the necessary intent should be an intent
on the part of the debtor to defeat, hinder, delay or
defraud creditors, or to put assets belonging to the
debtor beyond their reach. She also observed that
section 423(3) is a carefully calibrated section
forming part of a carefully calibrated group of sections and that even as regards a party to a transaction potentially falling within section 423, there are
significant checks and balances. In these circumstances I do not consider that I should be deterred
from exercising the jurisdiction in a novel situation
if the facts fall within the carefully calibrated
provisions.
129. In my view the facts fall squarely within the
provisions of section 423. The transaction was at an
undervalue. The consideration given was trifling
and at best symbolic 1,000 in respect of a
vessel for which Boskalis had only recently, in
effect, offered 25 million. As to section 423(3) I
have already found that a purpose of Boskalis, and
for the avoidance of doubt of Westminster International, in entering into the sale was to prejudice
the interests of underwriters in relation to their
claim to be entitled to assume ownership and possession of the vessel and to sell her. For the avoidance of doubt Boskalis had the like purpose in
relation to the like claim which they anticipated
those underwriters who had not yet elected would
make section 423(3)(b) talks of prejudicing the
interests of a person in relation to the claim which
he may make and section 423(5) defines as a victim
of the transaction a person who is or is capable of
being prejudiced by it. Although it is unnecessary
to go this far, I would if necessary hold that Westminster International had the purpose of putting
assets, ie the vessel, beyond the reach of underwriters, although I would accept that it is not of
course the paradigm case of such conduct. It is
sufficient if either purpose was a real substantial
purpose, as in my judgment both were. As Arden LJ
pointed out in Inland Revenue Commissioners v
Hashmi at para 23 of her judgment, it will often be
the case in this sort of context that motives will
co-exist in such a manner that even the transferor
himself may be unable to say what was uppermost
in his mind.
130. The underwriters are plainly victims of the
transaction. If it stands it prevents them from exercising their contractual right to assume ownership
and to sell the vessel on the open market so as to
maximise recovery. The underwriters have been
deprived of the chance of achieving a higher price
than that indicated by the valuation which Boskalis
says is a proper one. That conclusion is independent
of but is reinforced by my finding that the vessel
cannot reliably be valued so that no valuation so far
[2010]
[QBD (Admlty Ct)
put forward can be regarded as a proper or appropriate valuation.

131. For the avoidance of doubt I reject out of
hand the submission of Boskalis in para 166 of its
closing submissions that Boskalis would not be
willing to participate in any sealed bid process or to
pay any ransom value. Boskalis has established
only that it did not want to be forced into a process
where it did not know what others were bidding. I
do not propose in this judgment to prescribe a
method of sale although I reserve the right so to do,
all parties having accepted that I enjoy that power
always assuming that the jurisdiction under section
423 is otherwise made out. Whether Boskalis
would participate in a process whereunder it did not
know what others were bidding remains an open
question, as does the question more broadly how
much it would be prepared to pay to keep the vessel
out of the hands of its competitors.
132. It is accepted that, as held by Sir Donald
Nicholls VC in Re Paramount Airways Ltd [1993]
Ch 223, the jurisdiction is subject to no territorial
limitation. The fact that both the first and the fourth
defendants are overseas companies and that the
transaction in question concerned moveable property situate in Thailand is relevant only to the question whether the court should exercise its discretion
to grant relief. On the other hand I fully recognise
the special need for care when exercising an extraterritorial discretionary power see Banco Nacional de Cuba v Cosmos Trading Corporation [2000]
BCC 910. In the context of winding-up, the subject
matter of that case, one is concerned not just with
the connection with this jurisdiction of the company
which it is sought to wind up, but also with the
connection of the potential beneficiaries see per
Knox J in Re Real Estate Development Co [1991]
BCLC 210 at page 217. What one is concerned to
find is a sufficient connection to justify the court
setting in motion procedures over a body which
prima facie is beyond the limits of territoriality
see again per Knox J at page 217.
133. In Re Paramount Airways Ltd Sir Donald
Nicholls VC said that the court will need to be
satisfied that, in respect of the relief sought against
him, the defendant is sufficiently connected with
England for it to be just and proper to make the
order against him despite the foreign element. He
went on, at page 240, to discuss how that connection might be shown:
This connection might be sufficiently shown
by the residence of the defendant. If he is resident in England, or the defendant is an English
company, the fact that the transaction concerned
moveable or even immoveable property abroad
would by itself be unlikely to carry much weight.
Likewise if the defendant carries on business
[2010]
QBD (Admlty Ct)]

here and the transaction related to that business.

Or the connection might be shown by the situation of the property, such as land, in this country.
In such a case, the foreign nationality or residence of the defendant would not by itself normally be a weighty factor against the court
exercising its jurisdiction under the sections.
Conversely, the presence of the defendant in this
country, either at the time of the transaction or
when proceedings were initiated, will not necessarily mean that he has a sufficient connection
with this country in respect of the relief sought
against him. His presence might be coincidental
and unrelated to the transaction. Or the defendant
may be a multinational bank, carrying on business here, but all the dealings in question may
have taken place at an overseas branch.
Thus in considering whether there is a sufficient connection with this country the court will
look at all the circumstances, including the residence and place of business of the defendant, his
connection with the insolvent, the nature and
purpose of the transaction being impugned, the
nature and locality of the property involved, the
circumstances in which the defendant became
involved in the transaction or received a benefit
from it or acquired the property in question,
whether the defendant acted in good faith, and
whether under any relevant foreign law the
defendant acquired an unimpeachable title free
from any claims even if the insolvent had been
adjudged bankrupt or wound up locally. The
importance to be attached to these factors will
vary from case to case. By taking into account
and weighing these and any other relevant circumstances, the court will ensure that it does not
seek to exercise oppressively or unreasonably the
very wide jurisdiction conferred by the
sections.
134. I particularly note from the foregoing that
Sir Donald Nicholls regarded no one factor as decisive. Each case will turn on its own facts with the
weight to be given to connecting factors or their
absence dependent on their real significance having
regard to the overall situation. In Jyske Bank
(Gibraltar) Ltd v Spjeldnaes [1999] 2 BCLC 101
Evans-Lombe J, whose experience in this field is
very considerable, exercised the jurisdiction even
though as he expressly recognised there were present none of the sort of connections with England
which the Vice Chancellor had set out.
135. In my judgment there is here an amply
sufficient connection to justify the court in exercising the jurisdiction. The excess policy is governed
by English law and was placed in the London
market. It contains an exclusive jurisdiction clause
in these terms:
39
[TOMLINSON J
This insurance shall be governed by and construed in accordance with the laws of England
and Wales and the exclusive jurisdiction of English courts.
In Beazley v Horizon Offshore Contractors Inc
[2005] Lloyds Rep IR 231 Judge Chambers QC
regarded an indistinguishable provision as extending to all disputes in respect of the insurance,
including a claim in tort alleging negligence by the
underwriters in failing to use reasonable care in
their dealings with the insureds claim under the
policy. It is therefore arguable that underwriters
were in fact required to bring proceedings before
this court, and might be restrained if they attempted
to bring equivalent proceedings, assuming them to
be available, in the other jurisdictions suggested to
be relevant, the Netherlands, Thailand and Nigeria.
It is also relevant to note: (i) that Boskalis had
before these proceedings were brought already
invoked this jurisdiction in order to pursue its claim
for interest and/or damages (although it had of
course no choice of forum if it wished to pursue the
claim); and (ii) that the sale to Nigerian Westminster was expressly intended to thwart these proceedings, both in terms of the claim to interlocutory
relief made herein and in respect of the ultimate
substantive relief sought.
136. I find it difficult to accept that the place of
incorporation of the buyer Nigerian Westminster
should be accorded any weight whatsoever. Nigerian Westminster was deliberately chosen by Boskalis in order to create difficulties. In other words
the lack of connection of the purchaser with England was an integral part of the very scheme which
it is the purpose of these proceedings to unscramble. For good measure a purchaser was chosen
whose place of incorporation happened to be in a
country whose legal system was thought by Boskalis to be likely to represent a significant impediment
to underwriters being able to enforce their rights
against the purchaser in its home jurisdiction.
Moreover, focus upon the position of Nigerian
Westminster exposes the fundamental paradox in
the approach of Boskalis to this entire litigation.
Boskalis relies upon the separate corporate personality of Nigerian Westminster in order to insulate it,
or to attempt to insulate it, from the knowledge of
Boskalis as to underwriters contractual entitlement
to assume ownership of the vessel. Yet at the same
time Boskalis relies upon the group structure and
the parent company guarantee, as effectively its
offer made through Messrs Nabarro is, to suggest
that underwriters have not been prejudiced by what
has been done. It is difficult to understand how in
these circumstances the interests of Nigerian Westminster can in reality be divorced from those of the
Boskalis Group as a whole and still more difficult to
understand how the fact that the purchaser selected
40
TOMLINSON J]
LLOYDS LAW REPORTS

by the parent happens to be incorporated in Nigeria

can be regarded as detracting from the connection
with this jurisdiction of the first defendant and the
Boskalis Group as a whole. As it happens, and for
what it is worth, Nigerian Westminster had itself
agreed to the same exclusive jurisdiction clause in
respect of vessels registered in its name insured
under the same policies.
137. All of the negotiations with underwriters
concerning the CTL claim took place in London
and were conducted on behalf of Boskalis, when
they were not dealing directly, by London market
professionals, ie Marsh and Messrs Nabarro. The
dispute between Boskalis and underwriters has at
all times been a dispute concerning the parties
respective rights and entitlement under a contract of
marine insurance governed by English law and subject to the provisions of the English Marine Insurance Act.
138. There is no other jurisdiction which has a
closer connection with the parties and the dispute
than does England. The sole connection with the
Netherlands is that Boskalis and Westminster International BV are registered there. So too once was
the vessel, but it is difficult to see that that can be
regarded as too significant a factor bearing in mind
the vessels deletion from the Dutch Registry. The
connection with Thailand arises simply because the
vessel was towed there in order to escape Chinese
jurisdiction in circumstances where she had been
salved by Chinese salvors. The connection with
Nigeria as I have already pointed out arises because
of the choice of Boskalis as part of the scheme to
frustrate underwriters entitlement and to thwart the
claim made in this action.
139. The claimants say that any lack of connection with England is of little significance given that
there are, in any event, as they submit, similar
principles relating to fraudulent dispositions under
Dutch, Thai and Nigerian law. Because the connection with these jurisdictions is so tenuous, and the
connection with this jurisdiction so strong, I regard
this point as of little weight even if it is wellfounded. Accordingly I do not propose to overextend an already long judgment by exhaustive
analysis of the position so far as it obtains under the
Dutch, Thai and Nigerian legal systems. I will deal
with the position under each as shortly as I can.
Dutch law
140. I set out below certain relevant provisions of
the Dutch Civil Code:
Article 11
Where the good faith of a person is required to
give legal effect to something, such person does
not act in good faith if he knew, or ought, in the
circumstances, to have known, of the facts or the
[2010]
[QBD (Admlty Ct)
law to which his good faith must relate. The

impossibility to make enquiries does not prevent
a person with good reason to be in doubt from
being deemed to know the facts or the law.
...
Article 40
1. A juridical act which by its content or necessary implication is contrary to good morals or
public policy is a nullity.
...
Article 45
2. If an obligor, in the performance of a juridical act to which he is not obligated, knew or
ought to have known that this would adversely
affect the possibility of recourse of one or more
of his obligees, the juridical act may be annulled;
any obligee whose possibility of recourse has
been adversely affected by the juridical act may
invoke this ground for annulment, irrespective of
whether his claim arose before or after the act.
3. Save for acts by gratuitous title, a juridical
act, either multilateral or unilateral and directed
at one or more specific persons, can only be
annulled because of prejudice to an obligee, if
those persons with whom or in respect of whom
the obligor performed the juridical act knew or
ought to have known that prejudice to one or
more obligees would result from it.
4. Where a juridical act by gratuitous title is
annulled because of prejudice, the annulment has
no effect against a beneficiary who neither knew
nor ought to have known that prejudice to one or
more obligees would be the result of the juridical
act, but only to the extent that he shows that, at
the time of the declaration or institution of the
annulment action, he did not derive benefit from
the juridical act.
5. An obligee attacking a juridical act as being
prejudicial to him can only annul the act on his
own behalf and no further than necessary to
remove the prejudice to himself.
6. Rights in property, the subject of an
annulled juridical act acquired by third parties in
good faith, other than by gratuitous title, shall be
respected. A third party acting in good faith who
has acquired property by gratuitous title shall not
be affected by the annulment to the extent that he
shows that, at the time the property is claimed
from him, he did not benefit from the juridical
act.
141. The Dutch law experts disagreed on only a
few matters concerning the applicability of these
articles. I deal with article 45 first as it is the more
commonly resorted to in commercial matters. In
fact the disagreement concerning article 45 was not
[2010]
QBD (Admlty Ct)]

really between the Dutch lawyers at all. It is common ground that pursuant to Dutch domestic law
Boskalis and underwriters would not for relevant
purposes be regarded as obligor and obligee
because Dutch law does not invest underwriters
who have paid for a CTL with a right to elect to
take over the wreck. In Dutch law underwriters are
simply subrogated to the insureds rights against
third parties. However it is common ground that
pursuant to its private international law rules Dutch
law will give effect to an express contractual choice
of a foreign law, which is of course unsurprising
given Dutch adherence to the Rome Convention. It
is common ground therefore that a Dutch court
would, giving effect to the choice of law, regard
Boskalis and the underwriters as obligor and obligee, having regard to the obligation on Boskalis as
insured to transfer title to underwriters in order to
give effect to underwriters entitlement under section 79 of the MIA 1906. Mr Weitzman argues that
this approach is impermissible because it involves a
forbidden renvoi. With respect to Mr Weitzman,
this point is misconceived. In this exercise I am not
concerned at all with the English rules of private
international law. I am not giving effect to Dutch
rules of private international law. I am simply concerned in this exercise to discover whether there is
available in the Netherlands a jurisdiction similar in
effect to section 423 of the Insolvency Act 1986.
The doctrine of renvoi does not come into play.
142. It is accepted that the sale between Westminster International and Nigerian Westminster
was a juridical act. The experts were divided on the
question whether for the purposes of article 45
1,000 would be regarded as rendering the act one
by gratuitous title. On this point I preferred the
evidence of Mr Spanjaart for the claimants to that
of Mr Wiersma for Boskalis. Mr Spanjaart cited in
support of his view that this sale was by gratuitous
title passages from two reputable Dutch textbooks
Reehuis/Heisterkamp, Goederenrecht, and Snijders/
Rank Berenschot, Goederenrecht. At pages 140 and
317 respectively of these works is to be found the
following passages:
A sale against the symbolic amount of 1
guilder is to be qualified as a transfer by gratuitous title. With a sale against a price of 50% of
the open market value, it is difficult to qualify
this as an acquisition by gratuitous title. A price
of 50% below the open market value can of
course play an important role when discussing
good faith.
...
However, who buys a wonderful Bosendorfer
piano from a friend for the mere amount of 10,
may, other than he might have thought, not count
41
[TOMLINSON J
on the court to protect him: almost gratuitous is

also gratuitous.
Mr Wiersma explained that his disagreement
with Mr Spanjaart and the two textbooks, apparently the only places in Dutch legal literature where
this point is addressed, did not rest upon any question of the proper translation to be given to the
relevant Dutch words. The only real point which he
was able to make was to draw a contrast with article
46. Article 46 deals with presumptions, and stipulates that a presumption of knowledge of prejudice
to the obligee will be made where an obligor contracts on terms whereby the value of the obligation
on the part of the obligor considerably exceeds that
of the counter-obligation. Whilst obviously one
value considerably exceeding another is a different
concept, this tells one little about the proper
approach to the different expressions used in articles 45 and 86. Article 86 deals with the circumstances in which an alienator who lacks the right to
dispose of property may nonetheless confer good
title on a purchaser if the transfer is not by gratuitous title and the acquirer acts in good faith. The
same words are used for the concept of gratuitous
title and it is common ground between the experts
that the expressions must bear the same meaning in
both articles of the Dutch Civil Code. As it happens
the passages from the two Dutch textbooks which I
have cited above were dealing with the meaning of
the words in the context of article 86.
143. Finally the experts were at odds over
whether the transaction here adversely affected the
possibility of recourse of underwriters. The experts
were agreed that recourse here means financial
recourse. However the argument that underwriters
possibility of financial recourse has not been
adversely affected because Boskalis was at all times
willing to pay the claimants the market value of the
vessel is an argument which I have already rejected
in the English law context.
144. It follows that I consider that underwriters
could in Holland avail themselves of an actio Pauliana, as the action under article 45 is known in
deference to its Roman law origins, in order to seek
annulment of the sale.
145. Article 45.5 of the Dutch Civil Code provides that rights acquired by a third party in good
faith are respected where title has been acquired
gratuitously if it is shown that, at the time the
property is claimed, the third party did not benefit
from the juridical act. I did not understand the
fourth defendant or Boskalis to controvert the proposition that Nigerian Westminster is not entitled to
the benefit of article 45.5 because it obtained an
obvious benefit from the transfer of ownership of
the vessel to it. In any event, it is again as I understand it common ground that pursuant to article 11
42
TOMLINSON J]
LLOYDS LAW REPORTS

of the Dutch Civil Code Nigerian Westminster was

under a duty to make appropriate and adequate
enquiries before entering into the transfer. It is also
common ground that as the claimants have sought
to annul the transfer within one year of it being
entered into, a presumption arises that both Boskalis and Nigerian Westminster knew or ought to have
known that the transfer would prejudice the claimants. This presumption arises because Boskalis
accepts that the matters identified as giving rise to
such a presumption in articles 46.1(1), 46.1(5)(d)
and 46.1(6) apply in the present case. In summary,
the transfer was at an undervalue, Boskalis holds
more than half of the issued share capital of both
the first defendant and Nigerian Westminster, and
the transfer was agreed between group companies.
Boskalis argues that the presumption is here rebutted because the transfer did not in fact cause prejudice to the claimants and because in any event any
such presumption is rebutted on the facts of this
case, in particular by Boskalis offer to pay to the
claimants the open market value of the vessel and
Boskalis belief that that offer would ensure that the
claimants would not suffer any financial detriment.
I have already rejected these last two arguments in
the English law context.
146. Finally it was agreed that a claim to annul
under article 40.1 might in principle proceed even
where the actio Pauliana is unavailable. Article 40
is not an article of the Dutch Civil Code to which
resort is often had, particularly in commercial matters, and I find it difficult to conceive in the present
case that an application under article 40.1 could
succeed in circumstances where an application
under article 45 had failed. In fact it was agreed that
if:
(i) Westminster International were here found
by the Dutch court to have been deliberately
intending to hinder the legitimate exercise of
rights by underwriters, even rights which do not
arise in Dutch domestic law, and
(ii) if Nigerian Westminster were held by the
Dutch court to have been acting in bad faith,
because there were elements of the transaction to
put them on suspicion as to what Westminster
International was trying to achieve and they
made no enquiries but simply agreed to the
contract,
then both parties would fall within the scope of
article 40.1. However in such circumstances the
action under article 45 would inevitably succeed,
and I find it unnecessary to discuss further what
would evidently be a rare resort to article 40.1
which would raise difficult questions as to the precise ambit of Dutch good morals and Dutch public
policy.
[2010]
[QBD (Admlty Ct)
Thai law
147. Sections 237 and 238 of the TCCC
provide:
237. The creditor is entitled to claim cancellation by the Court of any juristic act done by the
debtor with knowledge that it would prejudice
his creditor; but this does not apply if the person
enriched by such act did not know, at the time of
the act, of the facts which would make it prejudicial to the creditor, provided, however, that in
case of a gratuitous act the knowledge on the part
of the debtor alone is sufficient.
The provisions of the foregoing paragraph do
not apply to a juristic act whose subject is not a
property right.
238. The cancellation under the foregoing section cannot affect the right of a third person
acquired in good faith.
The foregoing paragraph does not apply if the
right is acquired gratuitously.
It was common ground between the Thai lawyers
that in Thai law:
(i) Boskalis and underwriters were debtor and
creditor in the relevant sense, at any rate in so far
as concerns those underwriters who had exercised their election under section 79(1) of the
MIA before the transfer. There are apparently
two schools of thought in Thailand as to whether
in respect of those underwriters who had not
prior to the transfer exercised their election the
relevant relationship would exist Mr Chamnian favoured the view that it would not;
(ii) The transfer was a juristic act; and
(iii) The acquisition of the vessel by Nigerian
Westminster would not be regarded as
gratuitous.
The availability of the remedy of cancellation is
therefore dependent upon the approach of the Thai
court to questions of good faith and knowledge.
148. There was considerable debate on these
topics. I was unpersuaded that good faith in Thai
law is any different from good faith in English law.
It implies an absence of dishonesty. It is consistent
with carelessness but not with recklessness. I was
not persuaded by Mr Wutipongs suggestion that
good faith in Thai law is incompatible with prejudice to the creditor which the third party could
reasonably have discovered. Apart from being
unsupported in authority or literature, it was inconsistent with his acceptance that carelessness does
not preclude good faith.
149. I am not sure that the relationship between
sections 237 and 238 was explored. The experts
were apparently agreed that knowledge in section
237 means actual knowledge. However Professor
Sopon in his Explanation of the Commercial and
[2010]
QBD (Admlty Ct)]

Civil Code with regards to Debt seems to suggest

that there may be cases in which the relationship
between the debtor and the person acquiring benefit
is so close that the court regards as actual knowledge that which should have been known. The
investigation of this point at trial was somewhat
superficial, without reference to the details of the
Supreme Court judgment cited by Professor Sopon
in his commentary. I was left with the impression
that application of both sections 237 and 238 is
intensely fact sensitive, and that it could not be
ruled out that in the present case a Thai court might
regard the transaction as potentially capable of cancellation under section 237. Mr Chamnian
described the line between know and dont
know as in such cases occupying something of a
grey area.
150. I do not need to discuss further the likely
approach of the Thai court to an application under
section 237 because it has not been established that
the Thai court would have jurisdiction to entertain a
claim brought under that section by underwriters to
cancel the sale. This question was dealt with in the
evidence in a most unsatisfactory manner. Neither
expert had been asked to address it in his report. Mr
Wutipong was not asked about it in his evidence in
chief. In cross-examination he was first asked about
the jurisdiction of the Thai court in the different
context of an attempt by underwriters to enforce in
Thailand a judgment obtained from the English
court. However after first mistakenly relying upon a
provision of the Thai Civil Procedure Code section
4 bis, which deals with immoveable property, he
accepted that the Thai court would not have jurisdiction to entertain any claim brought by the underwriters against the defendants, they not being
domiciled in Thailand and the case not concerning
immoveable property located in Thailand. In reexamination he was reminded of the basic allocation of jurisdiction prescribed by section 4(1) of the
Civil Procedure Code which provides:
The plaints shall be submitted to the Court
within the territorial jurisdiction of which the
defendant is domiciled or to the Court within the
territorial jurisdiction of which the cause of
action arose, whether the defendant shall have
domicile within the Kingdom or not.
Mr Wutipong was invited to agree with the proposition that if the cause of action arose within the
jurisdiction of the Thai court that would be sufficient to found jurisdiction in that court. Unsurprisingly he did. He was not however asked whether in
Thai law underwriters would be regarded as having
a cause of action against the defendants which had
arisen in Thailand. Mr Chamnian confirmed in his
evidence in chief that in Thai law the circumstance
that the vessel had been at all material times in
Thailand has no relevance to the determination
43
[TOMLINSON J
where underwriters cause of action against Boskalis or Nigerian Westminster arose. His view was not
challenged in cross-examination. However at the
very end of his cross-examination his attention was
drawn to section 4 of the Civil Procedure Code
which provides:
The request concerning the property situated
within the Kingdom, or the request, provided that
the Court shall issue order according to such
request, it will result a procurance or an dismissal
of procurance of the property to be situated
within the Kingdom, which the cause of action
does not arise within the Kingdom and the applicant is not domiciled within the Kingdom, shall
be submitted to the Court within the territorial
jurisdiction of which the aforesaid property is
situated.
Evidently this provision is as impenetrable in the
Thai language as it is in English translation. It had
plainly not hitherto occurred to anyone to regard
this provision as of any relevance. Given the manner in which Mr Wutipongs evidence emerged, I
cannot regard him as being necessarily the author of
the suggestion that this section might be of relevance to the jurisdiction of the Thai court. Furthermore if the section simply confers jurisdiction
in respect of actions concerning property within the
jurisdiction then it is odd that section 4 bis should
be restricted to immoveable property. Mr Chamnian, who I have already described as a careful and
convincing witness, did not know what in this context was meant by the request or pursuant to what
provision of law it might be made. He did not
consider that it related to a straightforward dispute
between a plaintiff and a defendant. He was however unsure what kind of process was envisaged.
Had this section had the far-reaching significance
which the claimants now attribute to it, it seems to
me inconceivable that one or other of the Thai
lawyers, including those who were assisting but not
giving evidence, would not earlier have mentioned
it. Mr Chamnian was asked whether this section
would permit a person to make a claim to take
possession of the ship, but as Mr Gaisman points
out that is not the right question. The right question
is whether the court would entertain a claim
brought by underwriters under section 237 to cancel
the sale by Westminster International to Nigerian
Westminster. I am far from persuaded that it
would.
Nigerian law
151. There is no Nigerian Federal legislation
affording a relevant remedy. However section 32(1)
of the Federal Interpretation Act 2004 provides:
Subject to the provisions of this section and
except insofar as other provision is made by any
44
TOMLINSON J]
LLOYDS LAW REPORTS

Federal law, the common law of England and the

doctrines of equity, together with the statutes of
general application that were in force in England
on the first day of January 1900, shall, insofar as
they relate to any matter within the legislative
competence of the Federal legislature, be in force
in Nigeria.
It is suggested by the claimants that pursuant to
this provision the Elizabethan Act of 1571 Against
Fraudulent Deeds, Gifts and Alienations has the
force of law in Nigeria. That Act was repealed in
England in 1924. It is unnecessary to set out the
terms of the 1571 Act in extenso. It is written in the
language of the time. Broadly, it renders void fraudulent transfers which have as their purpose the
hindering or defrauding of creditors. Transfers for
good consideration made to a bona fide purchaser
without knowledge of the fraud or collusion with
the fraudster are exempt.
152. Of the conditions prescribed by the Interpretation Act 2004 which must be met before an
English statute will be given the force of law in
Nigeria, only three are in dispute. Mr Gaisman
submits that:
(i) The 1571 Act is only applicable insofar as
it relates to bankruptcy and insolvency. It does
not relate to any other matter within the Federal
competence.
(ii) To the extent that the 1571 Act relates to
bankruptcy and insolvency, it is not applicable,
as other provision is made by Federal law, specifically, by The Companies and Allied Matters
Act and The Bankruptcy Act.
(iii) The 1571 Act is not in any event a statute
of general application.
153. Matters within the Federal legislative competence are listed in parts 1 and 2 of the Second
Schedule to the Constitution of the Federal Republic of Nigeria 1999. The only potentially relevant
provisions appear within the Exclusive Legislative
List in part 1. They are item 5: bankruptcy and
insolvency, and item 68: any matter incidental or
supplementary to any matter mentioned elsewhere
in this list.
154. In so far as the 1571 Act relates to bankruptcy and insolvency, Mr Gaisman concedes that it
falls within the Federal legislative competence. It is
plain from the wording of section 32(1) that an
English statute can, and indeed must, be given
effect only in so far as it relates to a matter within
the Federal legislative competence. Contrary to the
suggestion of the claimants expert witness Mr
Achukwu, partial importation of a statute is inherent in the legislation giving force in Nigeria to
English statutes.
155. Dealing with fraudulent dispositions is
brought within the Federal legislative competency
[2010]
[QBD (Admlty Ct)
by item 68 only in so far as it is incidental or

supplementary to another matter mentioned in the
list. Thus insofar as the 1571 Act applies to fraudulent dispositions in the context of bankruptcy and
insolvency, it satisfies the statutory condition so far
as concerns Federal legislative competence.
156. However in the field just mentioned the
Nigerian National Assembly has made other provision in the shape of the Companies and Allied
Matters Act and the Bankruptcy Act. The former
Act deals with fraudulent preference, the latter with
preferences by an insolvent. There is therefore no
scope for the application in Nigeria of the 1571 Act
in bankruptcy and insolvency.
157. Mr Gaisman does not accept that the 1571
Act extends to fraudulent disposition by a solvent
company. However insofar as it does, it deals with
a matter going beyond the Federal legislative
competence.
158. In these circumstances the question whether
the 1571 Act is a statute of general application does
not arise. In 1938 in Bafunke Braithwaite v Folarin
the West Africa Court of Appeal decided that the
1571 Act was a statute of general application within
the meaning of section 14 of the then Supreme
Court Ordinance, which although containing that
concept was in different terms from section 32 of
the Interpretation Act 2004, necessarily so because
of course it preceded independence. The Supreme
Court of Nigeria is not bound by decisions of the
West Africa Court of Appeal.
159. In Lawal v Ejidike [1997] 2 NWLR 317 at
page 332 Tobi JCA said in the Court of Appeal
Kaduna Division:
It is common knowledge that some of the
so-called statutes of general application in England have been either abrogated or abolished. In
such a situation, it will be ridiculous for courts in
Nigeria to enforce such statutes in the name and
style of statutes of general application on the first
day of January 1900. With the death of the statute
in England, there will be no legal tests for its
continuous application in Nigeria.
In that case the English 1623 Limitation Act was
by concession held applicable.
160. Nine years later in Chigbu v Tonimas [2006]
9 NWLR 189 at page 213 the same judge, now Tobi
JSC said this in the Supreme Court:
Much as I appreciate the colonial tie between
England and Nigeria, it will seriously hamper
and compromise our sovereignty if we continue
to go on a borrowing spree, if I may so
unguardedly call it, to England for the laws of
that country without any justifiable reason. Nigeria is Nigeria and England is England. Statutes of
England cannot apply to Nigeria as a matter of
[2010]
QBD (Admlty Ct)]

course, even the so-called statutes of general

application.
Section 45 of the Interpretation Act, Laws of
the Federation and Lagos, 1958 provided that the
statutes of general application that were in force
in England on the first day of January 1900 shall
be in force in the Federation. By this nebulous
provision, a number of English statutes were held
to be applicable in Nigeria as statutes of general
application by the courts. From the state of the
case law, the approach of the courts has not been
consistent. The courts have not found it quite
easy to determine what is a statute of general
application and what is not. And so, what
amounts to a statute of general application is still
a vexed juridical problem in our jurisprudence,
as the courts do not successfully apply a single
criterion or sets of criteria across the board. The
issue is, therefore, largely taken on the particular
merits of the case before the court.
161. In both Raleigh Industries v Nwaiwu [1994]
4 NWLR 761 and Sofolahan v Fowler [2002] 14
NWLR 664 repealed English statutes were given
effect, although in the second case it was not drawn
to the attention of the court that the Charitable
Trusts Act 1853 had been repealed. The earlier case
again concerned the Act of Limitations 1623.
162. Although the question does not arise, I
entertain grave doubt whether the Supreme Court
would today give effect in Nigeria to the 1571 Act.
There is undoubtedly a growing aversion to the
application in Nigeria of antiquated English statutes, particularly those which have long since
ceased to have any application in England. Times
and circumstances have changed. This was the view
of the Nigerian law expert witness called by the
Boskalis interests, Mr Azikiwe, and I accept it, not
least because it accords with the approach of one
highly respected member of the Supreme Court and
it is in any event, if I may respectfully say so,
exactly the approach which one would naturally
expect of an evolving independent legal system as
the attainment of independence recedes. I found
surprising the insistence of Mr Achukwu, the Nigerian law expert called by the claimants, that there is
not even a school of thought in Nigeria as to the
inappropriateness of enforcing in Nigeria statutes
since repealed in England. There were in fact a
number of points on which I found the evidence of
Mr Achukwu surprising, in particular his initial
insistence that section 32 of the Interpretation Act
requires consideration of the subject matter of the
claim rather than of the English statute sought to be
given effect, and his attempt, not ultimately adopted
by the claimants, to suggest that item 36 of the
Exclusive Legislative List, Maritime Shipping and
Navigation, rendered the 1571 Act applicable in
Nigeria in relation to ships but not in relation to
45
[TOMLINSON J
other property. It follows that I find Mr Azikiwe the

more reliable of the two witnesses. I think it
unlikely that in modern conditions the Nigerian
court would attempt the difficult task of assimilating into Nigerian law the archaic language of the
1571 Act. I do not accept the claimants argument
that not to apply the law of 1571 would leave a
serious gap in the law of Nigeria. It is true that in
Lawal v Younan [1961] ANLR 257 at page 268
Brett FJ in the Supreme Court spoke of the grave
inconvenience [which] would follow if the English
statutes which had hitherto been applied were
henceforth held inapplicable. That however was
nearly 50 years ago in the second year of independence. Moreover dealing with fraudulent dispositions in a context other than insolvency falls within
the legislative competence of the individual states.
In circumstances where it is contentious whether
contemporary English legislation covers the field, it
ill behoves an English judge to determine whether
Nigerian legislation is deficient if it does not.
163. It remains only to consider how the discretion under section 423 should be exercised. This
involves an examination of all the circumstances,
including those set out by Sir Donald Nicholls VC
in Re Paramount Airways Ltd at page 240. In my
judgment the case for an order protecting the interests of underwriters is overwhelming. The connection with England is strong. With the possible
exception of the Netherlands, where the Boskalis
Group is incorporated, the connection with all other
jurisdictions is tenuous. As it happens there is available in Holland a similar remedy, but it would be
wasteful of costs and productive of delay to require
underwriters to proceed there. This is a dispute
about an English marine insurance policy and the
effect of an English statutory incident of such a
policy. Policies of marine insurance governed by
English law are in wide use throughout the world. It
is appropriate that the English court should deal
with the dispute. Although bound to do so if they
wish to make the claim, Boskalis has itself invoked
the jurisdiction of the English court in respect of its
claim for interest and/or damages arising out of the
delay in payment of the CTL, that payment being
the circumstance which gives to underwriters the
contractual entitlement which by this action they
now seek to protect. There is no significant disadvantage to either the first or the fourth defendant
or indeed to the Boskalis Group in participating in
proceedings in this court. Whilst any order which
the court makes would not be capable of direct
enforcement in Thailand that is probably of little
moment given that instructions with regard to the
disposition of the vessel emanate ultimately from
Holland, as was vividly demonstrated by the fact
that Nigerian Westminster was presented with a fait
accompli. In any event, I naturally assume that the
46
TOMLINSON J]
LLOYDS LAW REPORTS

defendants will comply with any order of this

court.
164. The impugned sale was concluded in the
face of an application for an injunction in these
proceedings which, if granted, would have enjoined
the first defendants from carrying out the sale. The
purpose of the sale was to prevent the claimants
obtaining the relief claimed in these proceedings.
Boskalis knew that the majority of underwriters
arguably already had the entitlement claimed and
that in the likely event that the rest of the subscribing underwriters exercised their election it was at
the least probable that the subscribing underwriters
as a whole would have the right to take over the
vessel and sell her on the open market. Hence
the speed with which and the secrecy in which the
transaction was effected. The offer by Boskalis to
pay to the underwriters the value of the vessel to be
ascertained other than by sale is irrelevant. Boskalis
knew that the entitlement which underwriters were
asserting was to sell the vessel. Just as they knew
that an open market sale could prejudice their own
interests, so they knew that inability to carry out an
open market sale could prejudice underwriters
interests.
165. The sale divested the first defendant of its
only substantive asset. Transfer of possession was
effected symbolically by protocol of delivery and
acceptance concluded with an affiliate company.
The sale was not on terms which would be normal
in an arms length sale and the consideration,
1,000, was purely symbolic. As I have already
explained I consider that the knowledge of the officers of Nigerian Westminster as to the background
is of little relevance to the overall exercise of discretion. The transaction was ordained by Boskalis.
The officers of Nigerian Westminster acted without
[2010]
[QBD (Admlty Ct)
enquiry because they assumed, rightly, that the

decision to enter into the transaction was not their
responsibility and had been made elsewhere. Mr
Slinger did not even read the documents which he
signed and did not appreciate their effect. He signed
them solely because his co-signatory was his
immediate superior within the Boskalis Group and
because Mr Bus, responsible for insurance matters
within the Boskalis Group, asked him to do so. To
describe Nigerian Westminster as having, by its
officers, acted in good faith, if that is appropriate, in
the circumstances adds little to the analysis. Nigerian Westminster has no independent interest in
retention of the vessel and will undoubtedly, unless
restrained, simply dispose of it in accordance with
instructions from its ultimate parent.
166. An order under section 423 is the only
manner in which effect can be given to the underwriters contractual entitlement. I propose therefore
to make such an order requiring the fourth defendant to transfer the vessel to the claimants nominee, with a view to her sale, but as agreed at the
hearing I will hear counsel further on the precise
form of the order. In particular I understand the
parties to have had discussions concerning the suitability of the nominee arrangements which underwriters first proposed. Furthermore, it was as I
understand it common ground that the court has the
power under section 423 to order sale of the vessel
and to prescribe the method thereof. Again however
the parties were agreed that it would be appropriate
to permit further argument on this aspect too.
167. I am grateful to the parties and to their legal
advisers for the exceptional assistance which I have
received in dealing with this expedited but complex
trial.

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INSURANCE AND REINSURANCE

Dornoch Ltd v Westminster International

QUEENS BENCH DIVISION

DORNOCH LTD AND OTHERS

respectively, 85 per cent and 77.5 per cent of the

LLOYDS LAW REPORTS

ties exchanged before 10 March 2008 on the

INSURANCE AND REINSURANCE

Dornoch Ltd v Westminster International

(3) Under Thai law the claimants did not

The following cases were referred to in the

Iain Milligan QC, Guy Blackwood and David

LLOYDS LAW REPORTS

Dornoch Ltd v Westminster International

INSURANCE AND REINSURANCE

in fact achieved. On reflection I am not sure that

tion of the parties to it. If such intention, express

LLOYDS LAW REPORTS

contending. This in turn raises an issue by reference

INSURANCE AND REINSURANCE

conclusion for which anyone contends.1 For allied

actually to exercise that entitlement. That this is the

LLOYDS LAW REPORTS

It will come as no surprise to Boskalis that,

cannot be different whether the assured repairs the

INSURANCE AND REINSURANCE

house suffered damage by fire in the interval

avoidance of doubt, I do not consider that this can

LLOYDS LAW REPORTS

ing the agents authority to deal with a third party

INSURANCE AND REINSURANCE

25 million. In the light of my earlier discussion

proprietary interest in the vessel by two distinct

LLOYDS LAW REPORTS

there are provisions of Thai law that decide an

Thailand. There is in Thailand no law specific to

INSURANCE AND REINSURANCE

marine insurance alone. Nonetheless, there is some

LLOYDS LAW REPORTS

The ship mortgage was registered. The Supreme

INSURANCE AND REINSURANCE

acted in an irregular fashion in resorting to tier four

ings and the Court then admitted that the English

LLOYDS LAW REPORTS

subrogated. The right in the obligation is a claim,

INSURANCE AND REINSURANCE

Supreme Court that upon the occurrence of loss or

LLOYDS LAW REPORTS

was familiar with and understood its contents. The

obviously a highly intelligent man, completely on

INSURANCE AND REINSURANCE

intended by his later answer to which I have just

instructed to accept service on their behalf. Neither

LLOYDS LAW REPORTS

Dornoch Ltd v Westminster International

VALUATION CERTIFICATE FOR THE

Saudi Arabia to Bahrein and a new causeway

INSURANCE AND REINSURANCE

That of course is a point which Mr Kersey had

London. Amongst 15 attendees were Mr Kersey

LLOYDS LAW REPORTS

AD confirmed that it was apparent that the