On 5 June 2018, the Teras Lyza, a jack-up drilling rig under tow from Vietnam to Taiwan, capsized. Subsequent inspections revealed extensive structural damage resulting in the vessel’s owner tendering a notice of abandonment claiming constructive total loss. This was predicated on the estimated repair and salvage costs (US$76–82 million) exceeding the vessel’s insured value (US$70 million). On 26 July the insurers rejected the notice without providing substantive reasons. After the insurers declined a formal claim, the vessel’s mortgagee and owners commenced proceedings on 30 September 2021.

By trial, the vessel owners were in liquidation. Consequently, the claim proceeded in the Singapore High Court1 with the vessel’s mortgagee, Oversea-Chinese Banking Corporation Ltd (“OCBC”), as sole plaintiff. The insurers raised six defences: challenging proof of constructive total loss and causation by insured perils, disputing OCBC’s loan quantum, alleging breaches of fair presentation duties and warranties, claiming unseaworthiness, and arguing that s.B of the policy (providing US$14m increased value coverage) was void as a gaming contract.

The defendants adopted what Kwek Mean Luck J described as “an evolving kitchen sink approach”, raising defences, dropping some, and introducing new arguments even after the trial concluded. This pattern manifested throughout proceedings: hearsay objections surfaced only in reply submissions months post-trial, the loan quantum dispute emerged after trial despite earlier pleadings focusing solely on mortgagee status, and new theories such as deck edge immersion were developed specifically for trial presentations without prior notice.

The court rejected five of the six defences. However, the court did rule that Section B was void as a gaming contract under English law. Consequently, OCBC’s recovery was limited to US$56 million rather than the full US$70 million insured value. Given the defendants’ shifting approach to their submissions, it is perhaps unsurprising that the court dealt swiftly with most defences without breaking new ground.