NZ court blocks $3m foreign lawsuit over barge which sank near Trinidad

The barge Resolute sank near the West Indian nation of Trinidad and Tobago. Photo / AP

A New Zealand insurer has been granted an injunction blocking a foreign lawsuit seeking more than $3 million after a barge sank near Trinidad.

The barge NRC Resolute was owned by Silica Sandport Inc and operated by Sri Commodities Import and Export Inc, both companies registered in Guyana.

It was insured with the New Zealand-based Maritime Mutual Insurance Association (NZ).

The barge capsized and was lost while being towed by a tug in international waters north of Trinidad in December 2018.

In May 2019, Silica Sandport made an insurance claim of $US1.176 million ($2.86m).

The New Zealand insurers instructed consultants to inspect the tug, also owned and operated by the same companies, interview the crew, report on the condition of the tug and barge, and advise on the possible cause of the capsize.

The survey report was inconclusive but identified a “number of concerns” related to the history and condition of the tug and barge, according to a newly released decision from the High Court at Auckland.

In the meantime, the Guyanan companies failed to pay premiums that had become due after the sinking. When these were not paid, the insurance was cancelled in April 2021.

Correspondence from the Guyanan companies then raised numerous allegations of breach of agency and fiduciary duty, conflict of interest, fraud and misrepresentation, the High Court decision from Justice Ian Gault said.

In December 2021, the companies began proceedings against the New Zealand association in the High Court in Guyana, claiming for the loss of the barge and sums totalling nearly $300,000 for various types of damages and alleged misrepresentation. These pushed the total claim to more than $3m.

The New Zealand association filed an affidavit in the Guyanan court protesting against its jurisdiction, and then applied for an anti-suit injunction in the New Zealand court.

“The anti-suit injunction is a long-recognised species of equitable injunction that restrains a defendant from pursuing proceedings overseas that are vexatious or oppressive,” Justice Gault said.

Justice Gault also said there was a “high degree of probability” an agreement in the insurance policy meant disputes had to be settled under the arbitration laws of New Zealand or England, and that the proceedings in Guyana breached that.

Justice Gault made an order restraining the Guyanan companies from continuing the proceedings in their own country.

They did not participate in the case filed in the Auckland court, but the judgment said the court in Guyana was aware of the anti-suit proceedings in New Zealand.