OPE Shipping Ltd. and ors. v. Allstate Insurance Co. Inc. and ors. (The El Salvador) - U.S. Ct. of Appeals (2nd Circuit) Waterman, Van Graafeiland and Meskill C.JJ.) - 30 August 1982

Marine insurance - Vessels taken over by Sandinista rebels - liability of marine/war risk underwriters

Four vessels, the El Salvador, Hope, Managua and Honduras , all under the control of General Somoza, were lost to their owners (Panamanian and Nicaraguan corporations) during the 1979 Nicaraguan revolution which resulted in the overthrow of the Somoza government by Sandinista forces. On various dates in June 1979, armed crew members of each of the four vessels identified themselves as Sandinistas and ordered the vessels to proceed to Cuba and Panama. On 9 July 1979, a business associate of Somoza executed papers transferring the titles of all four ships to Cayman Islands Corporations. On 10 July, the marine risk coverage on the ships was cancelled, either for non-payment of premiums or because of the change in ownership. On 11 July, the war risk insurers authorized the assignment of their policy to the Cayman Islands Corporations. On 13 July, the vessels were registered under the British flag in the Cayman Islands.