Norfolk Shipbuilding & Drydock Corporation v Seabulk Transmarine Partnership Ltd and Ors (The "Seabulk America") - US Court of Appeals (5th Circuit)(King, CJ, Duhe and Benavides Ct JJ) - 26 November 2001

Marine insurance - Construction of ship - Parties to construction contract insured under builder's risk policy under which both listed as principal assureds - Builder incurring legal costs in proceedings between parties to construction contract - Whether builder entitled to claim on policy in respect of legal costs

Seabulk Transmarine Partnership Ltd ("Seabulk") wanted to build a new vessel, the Seabulk America. To build the vessel, Seabulk planned to combine parts of two separate vessels. The hulls of the two vessels were of dissimilar widths and depths, so that Seabulk faced the challenge of obtaining a third hull to join the other two. A Dutch research institute ("MARIN") performed model testing of the proposed vessel, and produced a drawing depicting the lines of the hull form ("the MARIN lines"). Norfolk Shipbuilding & Drydock Corporation ("Norshipco") was contracted to construct the vessel. Norshipco understood that it was obligated to construct the vessel in accordance with the MARIN lines. During the course of construction, Seabulk became aware that Norshipco was not following the MARIN lines, and instead was using lines developed by its own subcontractor.