Asked in Insurance Bad Faith and Insurance Defense

Q: Advise Shale's insurers whether they can successfully exercise rights of subrogation against KTL and REP

Kakuru Methanol Limited agreed to sell to Shale Uganda Limited “Know-how” in connection with the design, construction and maintenance of a methanol plant in Uganda. Advise on the design and operation of the plant was provided by Kakuru Technology Limited (“KTL”) a subsidiary of Kakuru Methanol Limited. The Plant was completed in 2022. In 2023, the plant exploded.

During the construction phase, Shale Uganda Limited took out an “all risks” policy under which the contractors and sub-contractors were names as co-assureds. The sub-contractors included Reko Engineering Partnership (“REP”) a firm of consulting engineers, and KTL. Shale Uganda blames KTL and REP for the explosion, suing them for negligence.

Shale’s insurers paid the claim that Shale made inspect of the explosion but Shale’s insurer’s wish to exercise subrogation rights against KTL and REP. Shale contends that KTL and REP had no insurable interest although they were mentioned in the policy.

1 Lawyer Answer
Tim Akpinar
Tim Akpinar
Answered
  • Insurance Claims Lawyer
  • Little Neck, NY

A: It would be helpful to see the way the policy is written. Also, it's possible this could involve laws of Uganda. Good luck

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