Dornoch Ltd & Ors v Westminster International BV & Ors

Dornoch Ltd & Ors v Westminster International BV & Ors

Payment for a constructive total loss (CTL) by underwriters, without an express election to take over the vessel, does not confer a proprietary interest in the vessel in the form of an equitable lien under English law. Only an express election by underwriters to take over the vessel, even if by a majority, creates a beneficial interest under a trust or co-ownership in proportion to their share. The applicable law for determining proprietary interests in the vessel is the lex situs, which, while the vessel was in Thailand, is Thai law. The law of the place of registration (Dutch law) is not determinative except as to registered legal title. Subsequent election by all underwriters after the...

Parties
Claimant: Dornoch Limited; Claimant: Royal & Sun Alliance Insurance plc; Claimant: Aspen Insurance UK Limited; 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
29 April 2009
Procedural Posture
Commercial/admiralty (marine Insurance) / Preliminary Issues Determination (phase 1) on Agreed Facts
Outcome
Preliminary issues determined; no proprietary interest (equitable lien) arises for underwriters on payment for CTL without election; partial election by majority underwriters effective to create beneficial interest; lex situs (Thai law) applies to proprietary interests.
Legal Topics
Marine Insurance—constructive Total Loss, Abandonment and Subrogation, Equitable Interests in Property, Lex Situs and Choice of Law, Trusts and Equitable Liens, Sale of Wrecks, Jurisdiction and Applicable Law
Insurance Law Conflict of Laws Admiralty Law Marine Insurance—constructive Total Loss Abandonment and Subrogation Equitable Interests in Property Lex Situs and Choice of Law Trusts and Equitable Liens +2 more

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Parties

Dornoch Limited

Claimant

Royal & Sun Alliance Insurance plc

Claimant

Aspen Insurance UK Limited

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) / Preliminary Issues Determination (phase 1) on Agreed Facts

Legal Issues

  1. 1 Whether payment for a constructive total loss (CTL) confers a proprietary interest (equitable lien) in the vessel on underwriters under English law
  2. 2 Whether payment of salvage/wreck removal claim constitutes an implied election to take over the vessel under the Marine Insurance Act 1906
  3. 3 Whether underwriters acquire a proprietary interest by paying salvage/wreck removal claim

Ratio Decidendi

Payment for a constructive total loss (CTL) by underwriters, without an express election to take over the vessel, does not confer a proprietary interest in the vessel in the form of an equitable lien under English law. Only an express election by underwriters to take over the vessel, even if by a majority, creates a beneficial interest under a trust or co-ownership in proportion to their share. The applicable law for determining proprietary interests in the vessel is the lex situs, which, while the vessel was in Thailand, is Thai law. The law of the place of registration (Dutch law) is not determinative except as to registered legal title. Subsequent election by all underwriters after the...

Court Disposition

Preliminary issues determined; no proprietary interest (equitable lien) arises for underwriters on payment for CTL without election; partial election by majority underwriters effective to create beneficial interest; lex situs (Thai law) applies to proprietary interests.