Commercial Disputes Weekly – Issue 21423 July 2024

Maritime – Insurance
The Commercial Court has upheld a “pay to be paid” clause in a liability insurance policy. Such clauses are common, and problematic where the assured goes insolvent without having first paid the liability claim, as occurred here. King Trader was owner of a ship that the charterer ran aground. The charterer collapsed without paying the US$30m arbitration award made in King Trader’s favour. King Trader looked to recover from the charterers’ liability insurance policy, under the Third Parties (Rights against Insurers) Act 2010. The insurers refused to pay because the policy provided that it was a condition precedent to the assured’s right to recover under the liability policy that it should first have discharged any liability. The 2010 Act invalidates such clauses, except in the case of marine insurance.
MS Amlin Marine v King Trader Limited and others [2024] EWHC 1813 (Comm), 16 July 2024

Adjudication
The Technology and Construction Court was required to consider whether certain claims brought between a contractor and sub-contractor had been compromised by the sub-contractor’s CVA (company voluntary arrangement). As a question of interpretation of the definition of claims in the CVA, the relevant claims were not covered. The adjudicator therefore had jurisdiction to decide that the contractor had repudiated the contract and the sub-contractor was entitled to enforcement of that decision and payment of the award of approx. £90,000.
Henry Construction Projects Ltd v Promep Ltd [2024] EWHC 1825 (TCC), 16 July 2024

Maritime
The Commercial Court has rejected an attempt by cargo interests to avoid compliance with the terms of a letter of indemnity (“LOI”) that had been issued following a request of the claimants to deliver the cargo without production of the bills of lading. The defendant had paid for the cargo, but the funds had not been received from the sub-buyer. The financing bank therefore claimed to be the lawful holder of the bill of lading and arrested the vessel for misdelivery of the cargo. The head charterer deposited security to release the vessel but the claimants were required to reimburse that amount, hence the claim under the LOI for liability, loss or expense by reason of delivery of the cargo. The court rejected arguments based on the claimants not having suffered a loss and that damages were an adequate remedy. The entire function and purpose of LOIs would be defeated if the defendant was not ordered to comply with the terms.
Bunge Asia Pte Ltd v Aetos Agro Merchants Private Ltd [2024] EWHC (Comm), 15 July 2024 (judgment not publicly available)

Undue Influence
This was a retrial of an original action arising out of property investments and other business transactions. The original judgment was set aside by the Supreme Court in 2019 for having been procured by fraud. The claimant established an entitlement to significant compensation after proving that property transfers had been procured by the defendants’ undue influence. The court also held that she had suffered loss due to unlawful means conspiracy by forgery of the claimant’s signature and subsequent deployment of that forged documentation in the original proceedings.
Takhar v Gracefield Developments Limited and others [2024] EWHC 1714 (Ch), 3 July 2024

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams: