Versloot Dredging v HDI Gerling

In Versloot Dredging BV and another v HDI Gerling Industrie Versicherung AG and others (the DC Merwestone), the vessel suffered catastrophic engine damage due to crew negligence in failing to close the sea suction valve and drain a pump. Owners claimed over €3.2m for a new engine under their hull and machinery policy. Their claim was supported by what was later found to be a fraudulent representation from their general manager that the crew had reported hearing a bilge alarm (which would have alerted the crew to the flooding) at noon on the day of the casualty but had failed to investigate the alarm on the basis that its sounding had been attributed to the rolling of the vessel.

At first instance, the statement was found to be irrelevant to the claim since the damage to the engine was found to have been caused by a peril of the seas. Popplewell J nonetheless held that the manager's lie was a "fraudulent device" entitling the insurers to reject the claim. The Court of