Coverage litigation over a sunken yacht must be held in England or Wales rather than in the United States, a federal appeals court said Monday, in affirming a ruling in Lloyd’s of London underwriters’ favor.
A yacht owned by Houston-based Noble House LLC, which is incorporated in the Marshal Islands, was insured by Lloyd’s of London underwriters for about $10.5 million, according to court papers in Noble House LLC v. Certain Underwriters at Lloyd’s London.
The policy contained a forum-selection clause that selected English and Welsh courts. Attached to the policy was a coverage note with its own forum-selection clause that selected any court of “competent jurisdiction” within the United States, which was allegedly prepared by Noble House’s own insurance broker, according to the 5th U.S. Circuit Court of Appeals in New Orleans’ ruling.
In August 2015, the vessel lost its port side rudder while entering a channel in the Bahamas and had to be salvaged, according to court papers.
About two months later, the underwriters issued a letter stating that coverage “may not exist,” but they have not yet denied coverage, according to the three-judge panel’s ruling.
After unsuccessfully suing in Florida, Noble House sued the underwriters in U.S. District Court in Houston, seeking a ruling it could pursue coverage in a U.S. court.
The district court ruled in the insurers’ favor and was affirmed by the appellate panel.
Nobel House has said it fears its claims would be time-barred under the foreign statutes of limitations. “Unfortunately for Noble House, controlling case law affords it no sympathy,” the ruling said.
Noble House “has not overcome our strong presumption in favor of enforcing forum-selection clauses,” it said, in affirming the lower court and dismissing the case.
Attorneys did not respond to requests for comment.