INVOLNERT MANAGEMENT INC V APRILGRANGE LTD AND OTHERS

[2015] EWHC 2225 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Leggatt, 10 August 2015

Insurance (marine) - Yacht - Non-disclosure of overvaluation of yacht - Non-disclosure of fact that the yacht was on the market - Materiality - Inducement - Waiver of disclosure - Misrepresentation as to value of vessel - Whether assured complied with policy terms as to notification of loss, commencement of proceedings and giving evidence on oath - Notice of abandonment - Marine Insurance Act 1906, sections 18, 20 and 57 to 62 - Relationship between assured, producing broker and placing broker - Duty of broker to complete proposal form and to warn assured of duty of disclosure

The claimant assured purchased the yacht Galatea new for €13 million in May 2007. It was insured against all risks from 13 May 2011 to 12 May 2012 by the defendant insurers. The insurance was placed through AIS, a Greek producing broker, and AIS in turn appointed OAMPS as its London placing broker. The yacht was insured against all risks for an agreed value of €13 million by means of a declaration to a line slip. The insurance was "Subject to satisfactory proposal form ... within 7 days of inception". A proposal form was presented on 17 May 2011, and this stated that the market value was €13 million, a figure inserted by AIS. A question as to the purchase price was left blank. Section A of the policy provided Hull and Machinery cover in an amount of €9.75 million, and section B provided cover for total loss only on the "Increased Value of Hull and Machinery" for €3.25 million. The policy incorporated the American Yacht Form R12 clauses under which: the assured was to provide a sworn proof of loss within 90 days; any proceedings had to be brought within one year of loss; documents had to be produced at a time and place designated by the insurers; and the policy was void in the event of concealment or misrepresentation.