Suez Fortune Investments Ltd & Anor v Talbot Underwriting Ltd & Ors Re: M/V Brillante Virtuoso

Suez Fortune Investments Ltd & Anor v Talbot Underwriting Ltd & Ors Re: M/V Brillante Virtuoso

The vessel was a constructive total loss as the cost of repair exceeded the insured value, applying the prudent uninsured owner test and allowing for a large margin due to uncertainties. The owners did not lose the right to claim for CTL by selling the vessel, as sale was with insurer knowledge and proceeds to be accounted for. The correct measure of indemnity for partial loss under the policy is the reasonable depreciation in market value, not insured value. Sue and labour expenses are recoverable until the date of issue of the claim form. Loss of hire cover is not available in CTL cases except for blocking and trapping.

Parties
Claimant: Suez Fortune Investments Ltd; Claimant: Piraeus Bank AE; Defendant: Talbot Underwriting Ltd; Defendant: Hiscox Syndicates Ltd; Defendant: QBE Corporate Ltd; Defendant: Chaucer Corporate Capital (No. 2) Ltd; Defendant: Markel Capital Ltd; Defendant: Catlin Syndicate Ltd; Defendant: Aprilgrange Ltd; Defendant: Brit UW Ltd; Defendant: Novae Corporate Underwriting Ltd; Defendant: GAI Indemnity Ltd
Jurisdiction
England and Wales
Judgment Date
15 January 2015
Procedural Posture
Commercial Insurance Dispute / Judgment After Split Trial (stage One)
Outcome
Claimants succeed on CTL and quantum issues; entitlement to indemnity for CTL, salvage, and sue and labour expenses up to claim form issuance.
Legal Topics
Constructive Total Loss, Partial Loss Indemnity, Sue and Labour, Loss of Hire, Policy Interpretation, Salvage, Quantum Assessment
Marine Insurance Commercial Law Constructive Total Loss Partial Loss Indemnity Sue and Labour Loss of Hire Policy Interpretation Salvage +1 more

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Parties

Suez Fortune Investments Ltd

Claimant

Piraeus Bank AE

Claimant

Talbot Underwriting Ltd

Defendant

Hiscox Syndicates Ltd

Defendant

QBE Corporate Ltd

Defendant

Chaucer Corporate Capital (No. 2) Ltd

Defendant

Markel Capital Ltd

Defendant

Catlin Syndicate Ltd

Defendant

Aprilgrange Ltd

Defendant

Brit UW Ltd

Defendant

Novae Corporate Underwriting Ltd

Defendant

GAI Indemnity Ltd

Defendant

Procedural Posture

Commercial Insurance Dispute / Judgment After Split Trial (stage One)

Legal Issues

  1. 1 Was the vessel a constructive total loss (CTL)?
  2. 2 Did the owners lose the right to claim for CTL by selling the vessel?
  3. 3 Was the notice of abandonment served on behalf of the bank?

Ratio Decidendi

The vessel was a constructive total loss as the cost of repair exceeded the insured value, applying the prudent uninsured owner test and allowing for a large margin due to uncertainties. The owners did not lose the right to claim for CTL by selling the vessel, as sale was with insurer knowledge and proceeds to be accounted for. The correct measure of indemnity for partial loss under the policy is the reasonable depreciation in market value, not insured value. Sue and labour expenses are recoverable until the date of issue of the claim form. Loss of hire cover is not available in CTL cases except for blocking and trapping.

Court Disposition

Claimants succeed on CTL and quantum issues; entitlement to indemnity for CTL, salvage, and sue and labour expenses up to claim form issuance.

Orders

  • Declaration that vessel was a constructive total loss as of 7 December 2011
  • Claimants entitled to indemnity for CTL under policy