Dornoch Ltd & Ors v Westminster International BV & Ors

Dornoch Ltd & Ors v Westminster International BV & Ors

The court held that under Thai law, underwriters did not acquire a proprietary interest in the vessel prior to its sale. However, the intra-group sale of the vessel for €1,000 was a transaction at an undervalue, carried out with the purpose of prejudicing underwriters’ contractual rights to take over and sell the vessel. The English court had jurisdiction under section 423 Insolvency Act 1986 and, given the strong connection to England and the insurance contract, would exercise its discretion to set aside the transaction and restore the vessel to underwriters’ nominee for sale.

Parties
Claimant: Dornoch Limited; Claimant: Royal & Sun Alliance Insurance plc; Claimant: Aspen Insurance UK Limited and Others; Defendant: Westminster International BV; Defendant: Koninklijke Boskalis Westminster NV; Defendant: Boskalis Westminster Limited; Defendant: Nigerian Westminster Dredging and Marine Limited
Jurisdiction
England and Wales
Judgment Date
17 July 2009
Procedural Posture
Commercial/admiralty (marine Insurance) / Judgment After Expedited Trial
Outcome
Claim allowed; transaction set aside under section 423 Insolvency Act 1986
Legal Topics
Constructive Total Loss, Proprietary Interests, Fraudulent Dispositions, Jurisdiction, Subrogation, Valuation of Damaged Vessel
Marine Insurance Conflict of Laws Commercial Law Insolvency Constructive Total Loss Proprietary Interests Fraudulent Dispositions Jurisdiction +2 more

Case Brief

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Parties

Dornoch Limited

Claimant

Royal & Sun Alliance Insurance plc

Claimant

Aspen Insurance UK Limited and Others

Claimant

Westminster International BV

Defendant

Koninklijke Boskalis Westminster NV

Defendant

Boskalis Westminster Limited

Defendant

Nigerian Westminster Dredging and Marine Limited

Defendant

Procedural Posture

Commercial/admiralty (marine Insurance) / Judgment After Expedited Trial

Legal Issues

  1. 1 Whether underwriters acquired a proprietary interest in the vessel prior to its sale under Thai law
  2. 2 Whether the sale of the vessel to an intra-group company at an undervalue can be set aside under section 423 Insolvency Act 1986
  3. 3 Whether the English court has jurisdiction and should exercise its discretion to set aside the transaction

Ratio Decidendi

The court held that under Thai law, underwriters did not acquire a proprietary interest in the vessel prior to its sale. However, the intra-group sale of the vessel for €1,000 was a transaction at an undervalue, carried out with the purpose of prejudicing underwriters’ contractual rights to take over and sell the vessel. The English court had jurisdiction under section 423 Insolvency Act 1986 and, given the strong connection to England and the insurance contract, would exercise its discretion to set aside the transaction and restore the vessel to underwriters’ nominee for sale.

Court Disposition

Claim allowed; transaction set aside under section 423 Insolvency Act 1986

Orders

  • Fourth Defendant to transfer the vessel to the Claimants’ nominee for sale; further directions on the method of sale and nominee arrangements to be determined after hearing counsel.