NOBISKRUG GMBH V VALLA YACHTS LTD

[2019] EWHC 1219 (Comm), Queen's Bench Division, Commercial Court, Sir Ross Cranston (sitting as a High Court Judge), 14 May 2019

Contracts - Shipbuilding - Unjust enrichment - Restitution - Payment by buyer to subcontractors under reservation - Whether entitled to recover such payments from shipbuilder

The arbitration appellant Nobiskrug was a German shipyard and the defendant VY was the purchaser of a yacht under a shipbuilding contract dated 29 March 2012. The yacht had been delivered on 27 January 2017. During the build, issues had arisen with subcontractors which were making demands for payments and threatening to discontinue the work. There were four such subcontractors with separate claims. Following negotiations involving both parties, VY had made certain payments to the subcontractors under various conditions and reservations. Nobiskrug took the view that it had no liability to the subcontractors and that it was not obliged to reinstate VY. The arbitration tribunal had ordered Nobiskrug to repay VY on the basis of unjust enrichment, and Nobiskrug appealed.