An English firm of insurance brokers claimed in the High Court yesterday that it was not liable for the "placing" of insurance cover on intervention beef valued at £22 million which was destroyed in a fire in Co Roscommon seven years ago.
The President of the High Court, Mr Justice Morris, was told that a Dublin company, Mike Murphy Insurance Brokers Ltd of Trinity Street, "produced" the insurance business in relation to meat stored at the United Meat Packers plant in Ballaghaderreen.
The meat plant was destroyed on January 7th, 1992. Since then several international insurance companies have denied liability for the loss.
Murphys claims the London firm, Nelson Hurst Marine Ltd, was one of two companies which "placed" the insurance business. If it is found liable for the insurance cover then, Murphys claims, it is entitled to be indemnified by Nelson Hurst.
The Minister for Agriculture, as EU intervention agent, claimed at a previous court hearing that he understood Murphys had arranged insurance on the beef and that the State was entitled to payment.
The insurance policy was repudiated on the basis that UMP had alleged that, under a storage contract, it was not liable for any loss.
The insurance companies claim this clause was not disclosed to them.
The insurers also claim that, in July 1991, they served a 90-day cancellation notice of the policy on the insurance brokers and that the policies would have terminated from October 1991.
Yesterday Mr Andrew Bradley SC, for Murphys, said his client had approached a French firm of insurance brokers, DB Agencies SA (DBA) of Paris and Monaco, to see if some "master policy" could be put in place.
DBA had contacted Nelson Hurst. The French market would not have been in a position to take the entirety of such an insurance placement and there would be an involvement in the London market, counsel said.
In January 1990 there was a meeting in the DBA offices in Paris in relation to an open cover scheme sought by DBA and Nelson Hurst, Mr Bradley said. Murphys was represented at the meeting, as was Allianz France Iardt, which was intending to be the lead insurance company.
A scheme was prepared whereby Nelson Hurst was to be the architect of an open cover policy for £12 million in two layers. One layer was for £7.5 million and was divided by allocating 52.5 per cent to the French market and 47.5 per cent to the English market. The second cover was for £5 million.
Mr Bradley said this was referred to as the "master policy". It would cover all Murphy clients and would be led by the French market and subject to French jurisdiction.
His client contended that the master policy was a viable operative policy and that it was incumbent on Nelson Hurst to place insurance cover on the English market to ensure that there was an effective master policy. They had to follow the French lead, and ensure that the French cover was in place and that the French placement was correct.
Mr Justice Morris said he was not concerned with whether a valid contract had been entered into at the Paris meeting. His task was to interpret the nature of the contract. He had to decide if Nelson Hurst acted as "placing" broker and not whether that company was negligent.
Mr Frank Clarke SC, for Nelson Hurst, said his client denied it had acted in any way in placing insurance, but admitted an involvement in placing insurance on the London market. It had nothing to do with the French market.
The hearing resumes today.