Mr Justice Tomlinson held, that as a matter of the law of Thailand (which, as the place where the vessel was situated, was the relevant governing law in the circumstances), neither Dornoch nor any of the other insurers had acquired proprietary rights to the vessel.
However, it was clear that the purpose of the sale of the vessel by Westminster to its Nigerian related company was to prevent the underwriters taking possession of the wreck and therefore gaining control over the sale of the vessel. The price paid for the vessel was clearly at an undervalue. Mr Justice Tomlinson therefore held that the facts of the case “fell squarely within the provisions of s423” and ordered that the transaction be set aside and that the vessel be transferred to the underwriters’ nominee to be sold on the open market. He noted in so doing that the jurisdiction under s423 was subject to no territorial limitation, it need only be accepted that there was sufficient connection to England and Wales. In this case, the insurance policy was governed by English law, subject to the exclusive jurisdiction of the English courts and was placed in the London market. This was judged to be a sufficient connection to England in the circumstances.
This case makes clear that s423 can be invoked where there is no insolvency and that it will not be possible for insureds to avoid accounting to their underwriters for residual value of insured assets by disposing of them to related companies.