Chapter 13
A second diagram appeared on the makeshift screen.
“I’ll now go through each of the claims fairly briefly. As I said before, all six claims relate to insurance contracts which Stirling had with each of the claimants and which Plantation inherited. None of the contracts was actually underwritten by Plantation itself.”
“None of them ?” said Ashby, in disbelief.
“None,” repeated Whittingham. “After the merger, Plantation agreed to pay all claims on Stirling policies as if they were their own.”
“And who was the underwriter ? Who signed off on them ?”
Nigel Black suddenly spoke up. “I did. I wrote all six of them. At the time, they were good business.”
Ashby said nothing : it wasn’t the right moment for explanations from Black. He needed to know more about what had gone on.
Whittingham then turned to the first diagram.
“The Captain Stratos is the most urgent claim. We’re being sued by the ship’s owners for twenty million pounds in the Admiralty Court. The hearing is scheduled for next week. Our solicitors will explain in greater detail the updated position in the case. So far, we’ve resisted payment….because the late Mr Ashby suspected that fraud was involved.”
There were lots of questions Rob wanted to ask but he decided to listen as carefully as he could. He would go over the details later.
“Next is the claim relating to the supply of high precision components for the government of South Africa by the North-Eastern Steel Company of Newcastle – NESC. This is a political risk contract. After supplying the parts, NESC have not been paid by the South Africans. NESC say they’ve tried everything to get the last instalment of thirty million pounds which was due last year. Unfortunately, as there are UN sanctions in place, the South Africans, as may be expected, have been trying it on and there appears to be no hope of getting the rest. We’re under pressure from the Department of Trade & Industry who are being pushed by NESC to get us to pay. According to our lawyers, Mr James Ashby looked at the papers several times and wasn’t convinced that everything had been done to get the money out of the South Africans. The policy between Stirling and NESC which Plantation inherited, says that any dispute must be resolved outside court in a commercial arbitration – a type of private hearing and that’s how things are going along at the moment.”
“We’ll explain a bit later where we’re up to,” said Clive Thomas whose law firm, Thomas & Associates was representing Plantation.
“The third reported claim is the Victor 7 oil platform which exploded the year before last. We’re not disputing that an accident may have occurred. Instead, we’ve said that when the brokers set up the policy for the oil company, they didn’t explain to Stirling that this type of platform was high risk. This meant that Stirling ended up covering something far more volatile and unsafe than what it had been told by the brokers. If it had been known from the start, the contract wouldn’t have been agreed – obviously this was why no-one else wanted to cover it. So, although the oil company is suing Plantation, we’ve said the brokers should pay because there shouldn’t have been a contract in the first place. But this one is a bit tricky. Any disputes are covered by US law – in this instance, the state of New York and US Federal law – and they have to go in front of a jury. American juries take a dim view of insurers who don’t pay. Altogether, we’re up against a tough American law firm, an American jury, American brokers and US law. Clive Thomas will tell you about it all a bit later.”
“I’ve always found the US system to be fair,” said Ashby.
“To continue….” said Whittingham as dark patches of sweat began to spread under the arms and back of his shirt as he read from his notes. “The next one is uh….somewhat out of the ordinary. You wouldn’t expect the Soviet Union to want insurance from Western countries but in fact, it’s just the opposite. They’re trying to get hard currency any way they can and insurance is as good a way as any other. Their difficulty in the past was that almost everyone avoided them but Stirling was willing to do business with them. This claim, if it is genuine and fully proved, has the ability to wipe us out several times over. There are a number of things which don’t stand up to scrutiny. This is a ‘goods in transit’ claim – consignments of produce were transported from the Soviet Union to the West but disappeared inside the Soviet territory before they reached West Germany. Under Soviet law, our access to information from the Soviets is extremely limited. They think that anyone from the West who travels inside Russia is a spy. Otherwise, why would you go there – it’s such a dreadful place. Even their own underwriters here think that. We’re refusing payment and have requested more information.”
The next diagram to appear showed a map of Central America and the coastline of South America, bordering on the Caribbean. There was grey shading over a large area.
“Hurricane Maisy hit the Caribbean last September. The tail of the bad weather also hit countries at the top of the South American continent. An area the size of France was hit by flash floods and landslides. Many of the Caribbean islands along with parts of Colombia and Venezuela were affected. Buildings, roads and rail lines in Cartagena and Barranquilla were hit. There were large claims made on the Colombian insurers but they had their own reinsurance cover for most of the loss. Yet, once again, there is a US angle involved. When the original Colombian insurers, Seguros Amazonas set up their reinsurance cover the year before, they used local Colombian brokers. At the time, the brokers had to go outside Colombia because they couldn’t get the full amount of cover they needed. So, they asked American sub-brokers in Miami, Florida to try and find an American reinsurer for them. However, the Miami brokers couldn’t find anyone and decided to try here in London. They were passed on to Stirling who agreed the reinsurance cover they were looking for. Seguros Amazonas have already paid up and the Miami brokers are threatening to sue us in the Florida courts very shortly if we don’t pay. In fact, this may have happened already.”
“Perhaps I know them,” said Ashby. “Can they sue a British company in Florida for a claim in Venezuela or Colombia ?”
“They certainly can,” said Thomas. “And if that happens, believe me, our worries will only just have started.”
“The last claim involves the theft of an old master painted by Caravaggio entitled ‘Christ’s Betrayal to the Romans’. The British Gallery are the owners. The painting was on loan for an international exhibition of works by Caravaggio in West Berlin. It may have been stolen to order. The theft was professionally carried out and not even noticed until the painting was being re-packed to come back to London. It was only due to the quick work of one of the conservators that the re-packaged painting was found to be a fake. Someone had substituted it for the real painting. The late Mr Ashby wrote to the Gallery offering to agree the claim if the payment could be delayed for a year. He also wanted the right to investigate how the theft took place and take steps to recover the painting ourselves. We haven’t yet had an answer from them – but it shouldn’t be too long in coming.”
Plantation A Legal Thriller Page 13
