January 26, 2007
Lloyds and North Korea
For some unknown reason my old school has traditionally provided a stream of people for the Lloyds insurance market. This does not reflect well upon the education they received:
The accident took place in April 2005 when, it is claimed, a helicopter owned by Air Koryo, the North Korean state airline, was dispatched from Pyongyang, the capital, to collect a woman who was in labour with triplets from a remote island. On the return flight it crashed into a warehouse on the outskirts of the city, causing a fire that destroyed a large amount of humanitarian relief goods.
The KNIC settled an insurance claim by the airline, which had compensated the owner of the warehouse, and claimed this back from its London reinsurers. According to the contract, disputes were to be settled under North Korean law and last month a court in Pyongyang ordered the reinsurers to pay the North Korean company the €44 million. They refuse to do so.
Disputes to be settled under North Korean law? Which idiot wrote that contract?
A good point: Lloyds were happy enough to cash the premium cheques for 9 years.
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Heh! My Dad's old company is representing the reinsurers. I pity the poor graduate trainee who is seconded to Pyongyang for the next 10 years whilst the case drags on.
Posted by: Tim Newman | Jan 26, 2007 11:25:49 PM
Insurance and shipping contracts are notoriously bad when written off the cuff by brokers. Not saying that happened here, of course.
Posted by: Marcin Tustin | Feb 2, 2007 12:30:15 PM