Chapter 40
“I’d like us now to go through the remaining claims which are plaguing us,” said Ashby to Meredith and Wells. “There are six major claims in all – the most urgent is the Captain Stratos which is in the High Court this week. After that, the next most urgent is the Victor 7 claim in a Manhattan court in New York in around a month’s time.”
He described to them the background to Plantation being at odds with Welch, Wenders & Watmore and how the stage was set for the case to be heard by a New York jury.
“From what I’ve read in the papers, my father was angry with Welch – he thought that Nigel Black had been set up – that he should’ve been given more information about the oil rigs contract, that he was cornered and wasn’t given time to think it through properly.”
The entrenched stance taken by Ashby senior had poisoned Plantation’s relations with every broking firm in the market. A score of leading underwriters had also taken the brokers’ side against Plantation. The same underwriters relied on the brokers for most of their business and had received subtle threats of business being withdrawn.
The consensus among the brokers was that Plantation was reneging on a valid claim and pushing it onto Welch. If that was the regard Plantation had for its business partners, then other brokers could expect the same treatment. At the sight of anyone from Plantation on the floor of the Risk Exchange, some brokers spat in disgust. As far as they were concerned, the Ashbys were turncoats and would be shown for what they were when the court in New York threw out Plantation’s defence. And if that didn’t happen, it would remain a pariah in London and no-one would deal with it.
Ashby continued. “At any rate, it’s sink or swim with us and I’ve decided that we should fight this claim, right to the very end, if need be. Welch’s lawyers here in London have taken some depositions with some of their witnesses giving evidence on video – I’m not sure what will come out of that – but at last week’s hearing, the judge refused to let them off the hook and ordered that they stay in the case, so that was a small victory for us. The main hearing in front of a jury is several weeks from now. Our lawyers in New York have said that it will all depend on how well Nigel Black acquits himself against Welch’s broker, Lane – they are the two most important witnesses. It all comes down to whether the jury will believe that Black was ‘unduly influenced’ – I think that’s the phrase which has been used – when the contract was presented to him on the plane and....”
He was interrupted by Simon Wells. “You know, if I’d been in his place, I’d have made some excuse to change my ticket or go back to my hotel or go on a sight-seeing tour – anything, just to get away from the broker.”
“Have you already spoken to Black ?” asked Meredith.
“Not yet. I’m sure my father would have but there are no records of the conversation. Whittingham and Thomas went through it all with him – you’ll see from the claims manager’s notes that as usual, they thought it was pointless fighting it.”
In the claims file, there was a short statement signed by Black, in which he accepted in an oblique way, what Lane had told him, hence the inevitable thumbs-down about Plantation’s chances at the hearing.
“Our lawyers in New York are more upbeat and say that if we can show that Lane and Welch ‘framed’ us – to use their word – and that Victor’s operations were a shambles, then the jury might have some sympathy with us, even if Black says he fully knew what he was taking on.”
“Did they tell you that on the afternoon before your father died, there was an almighty row between him and Black and Roger Grenville in this very room in front of the entire board ?”
“No...no, they didn’t. What happened ?”
“I can’t say exactly,” said Wells, “but my office is just across the corridor from here, only two doors away from this room and for a solid hour in the late afternoon, there was almost non-stop shouting going on between the three of them about these claims. I couldn’t hear everything that was being said....but I certainly heard ‘swindler’ and ‘fraud squad’ and from what I could make out, your father was pointing the finger at Black and making threats.”
“Threats ? To do what ?”
“I don’t know. But after your father left the room, he went on shouting, all the way back to his office.”
“Hm, I’d like to find out more about that. Let’s speak later about it, maybe after this. Where was I ? Well, we certainly need to speak to Nigel Black about the Victor claim – and also the other claims. He was the underwriter who signed off on all of them. But first things first. Aside from the Captain Stratos and the Victor 7 oil rig, the third most pressing is an arbitration here in London with Caspian Ltd, the...”
“The Soviet state insurer ?”
“You know of them ? They’re suing us for eighty five million pounds on a contract Stirling had with them for goods lost in transit. The USSR exported over seven hundred million pounds worth of oil, crab and other produce to Western companies during the past year and this was the shortfall.”
“The Russians lost all of that in one year ? Are they claiming for any other years ?”
“No. As far as I can see in the underwriting file, it’s limited to the first year of cover. For the earlier years, Caspian would have to pay.”
“When does the arbitration start ?”
“Four months from now.”
“What ? So.....as soon as the Stratos case finishes, we’ll be straight into Victor 7 in New York and then straight after that, into the Caspian arbitration here.”
“That’s how things look at the moment – then there are the other three claims we need to go through.”
Just then, Ashby’s secretary tapped on the half-open door.
“Robert, there are two journalists in reception who would like to speak to you. What should I tell them ?”
“Tara, just say that I shouldn’t be long......sorry.....lost my train of thought. Oh yes, the last three claims – North Eastern Steel, hurricanes in the Caribbean and the Berlin art theft.”
He paused, drank some water and took a folder from the first lot of files in front of him.
“North Eastern Steel Company – NESC – are a Tyneside company. They’re the only company in Europe to manufacture precision, specialist, high tensile steel for use in nuclear power plants. Stirling covered them for political risk when they supplied precision parts to the South African National Power Generation Company....”
“They needed insurance because the UN sanctions against South Africa could prevent them getting paid for the steel.”
“It's even worse than that – the South African Electricity Corporation then gave the NESC components to a second South African government scientific body which used them – it is alleged – in the construction and testing of a nuclear bomb.”
“I read something about this,” said Meredith, staring into the distance. “They’ve been doing tests since the end of the seventies, haven’t they ? Apparently with Israel.”
“NESC knew that what they were doing would attract international condemnation – but some of their directors had lived in South Africa so they had partisan interests. They ignored the intervention of the UN and our government but hedged their bets by taking out political risk cover. Only Stirling would take them on. No-one else.”
“Wouldn’t the supply of parts have been illegal – either here or under international law ?”
“That’s an interesting point – UN sanctions aren’t legally enforceable anywhere in the world – governments which are signatory to the UN Treaty of 1945 only promise to do their best to prevent breaches. Also, there are no UK laws to say that what NESC did was wrong. Whatever the moral position, NESC want their money for supplying the steel. They tried to get Pretoria to pay but South Africa has been badly hit by the sanctions. Because of this, NESC have been repeatedly put off and now the regime are using some excuse to say the steel was defective. This has activated the political risk contract and we’ve been asked
to pay up. If we did that, we’d take over all of NESC’s rights to the debt and then go after the South Africans for what we paid. Ha, if we did that, we would be in breach of UN sanctions. Anyway, a commercial arbitration process is already under way, similar to the one in the Caspian claim and three arbitrators are already appointed.”
“What’s our position ?”
“My father apparently spoke to Nigel Black about it – and, well, he gave the usual story : the premium was at a stratospheric level and too good to pass up. So he knew full well what he was getting himself into – or, rather, getting us into.”
Ashby halted again, replaced the folder on the first lot of files and then took another folder in front of him and opened it.
“The fifth claim is for civil disturbance, hurricane and flood cover in Colombia and Venezuela when Hurricane Maisy hit the Caribbean four months ago. There was flooding and devastation in both of those countries with railway lines wiped out in several areas.”
“It was a category 5 hurricane, if I recall rightly,” said Meredith. “Some of them at the Exchange almost had to shut up shop because of the losses they expected. There were vast areas under water across northern Colombia and Venezuela. Usually hurricane damage doesn’t extend so far south. The Panama Canal was closed for almost a week which held up a lot of shipping – and led to quite a few claims on marine policies.”
“This contract has a history : the original Colombian insurer, Seguros Amazonas, approached Stirling in London using an American broker in Miami. This was because no-one in the US or Central American markets was interested – for some reason yet to be explained. The main items of loss were for rail lines, roads and buildings in areas of both countries where the tail of Hurricane Maisy made landfall. The Colombians paid their two per cent share some time ago. The brokers in Miami engaged lawyers there in the past month and are about to start up a court action in Florida against us, even though English law was agreed as the law of the contract. Clive Thomas said it was possible for them to do that and when Whittingham was here, he was having great difficulty getting the Colombians or the Americans to say exactly what they were claiming and why. It seems very much a case of ‘shoot first and ask questions later’. Essentially, we need to find out what it’s all about and then decide where to go from there.”
Ashby then said that as there were people waiting for him, he didn’t propose to go into it further at that moment but took a folder from the third lot of files in front of him.
“The sixth and final claim is for the theft of an old master which was on loan from the British Gallery to a West Berlin gallery almost two years ago. The original painting – a Caravaggio – was somehow removed from its frame while on display and substituted with a fake – it's amazing to think how they were able to do it at all – anyway, the fake was crafted so professionally that it would have only been recognised by one or two experts in the world. It was fortuitous that one of them just happened to be supervising the exhibition from the London end in West Berlin and was checking the storage of the painting before it was to be air-freighted back to the British Gallery when he spotted a flaw. He raised the alarm and it was then, that the painting was found to be a fake. After some haggling, my father proposed a form of agreement with the trustees of the Gallery.”
“So, in this one, there are no proceedings already started or arbitrations – Plantation doesn’t dispute that it has to pay up ?”
“In a manner of speaking. Just recently, my father wrote to the trustees saying that the claim could be agreed but only on condition that payment of the money would be delayed for one year (with an option to extend). In the meantime, we’d be given carte blanche to investigate what happened to the original painting and whether we could recover it at our own expense.”
“And what was the answer from the Gallery ?”
“So far, nothing – probably because they’d read about my father’s death – but I’ve arranged to meet the head of the gallery during the next few weeks. I’ve told them that things are in a bit of a turmoil here and they’re not unreasonable, so with a bit of luck we may be able to keep this out of court – unless we have to sue someone involved in the exhibition, either here or in Germany. Perhaps the owners of the German gallery were negligent in their security which allowed the thieves to steal the painting. The West Berlin gallery probably have insurance somewhere – Germans insure everything – and maybe we can do a deal out of court. At any rate, it’s early days.”
He pointed to the mounds of paperwork and said : “You already have everything on the Captain Stratos. Here are all the Victor and Caspian files. You can have the other three whenever you like. If you get a chance later in the week, let me know your ideas for finding a solution in them – assuming there is a solution – favourable to us – to allow Plantation to stay in business.”
Plantation A Legal Thriller Page 40