Neutral Citation Number: [2025] EWHC 585 (Comm)
Case No: CL-2022-000105
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Date: 14 March 2025
Before :
The Honourable Mrs Justice Dias
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Between :
CHUGGA CHUGG PTY LTD Claimant
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PRIVINVEST HOLDING SAL Defendant
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Mr Tim Akkouh KC and Mr Sebastian Mellab (instructed by Slaughter and May) for the
Claimant
Ms Rani Noakes and Mr Jacob Haddad (instructed by Preston Turnbull LLP) for the
Defendant
Hearing dates: 11-13, 17, 20 February 2025
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Approved Judgment
This judgment was handed down remotely at 10.30am on 14 March 2025 by circulation to the
parties or their representatives by e-mail and by release to the National Archives.
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MRS JUSTICE DIAS DBE
Approved Judgment
Chugga Chugg v Privinvest
Mrs Justice Dias :
A: Introduction and Background
1. This is a claim under a guarantee.
2. The Claimant (“Chugga Chugg”) is a company which, amongst other things, procures
the design and construction of superyachts. Its ultimate beneficial owner is an Australian
businessman, Mr Brett Blundy who uses it as a special purpose vehicle for his maritime
ventures. Mr Blundy is also a director of the company and himself a yachting enthusiast.
3. The Defendant (“Privinvest”) is the Lebanese holding company of an international
shipbuilding group (the “Privinvest Group”). The primary beneficial owner and CEO of
the Privinvest Group until his death on 29 January 2024 was Mr Iskandar Safa. One of
the companies in the Privinvest Group was a German company, Nobiskrug GmbH
(“Nobiskrug”) which specialised in the design and construction of superyachts at its
shipyard in Rendsburg.
4. By a contract dated 16 November 2018 (the “Contract”), Nobiskrug as builder undertook
to design, build and deliver to Chugga Chugg a 79.99 metre luxury motor yacht. Chugga
Chugg was represented in its dealings with Nobiskrug by a consultancy and project
management company, Burgess Technical Services Ltd (“Burgess”), acting principally
by its CEO, Mr Jonathan Beckett, and by Mr Edmund Beckett, a naval architect in the
New Construction Team. This was the third yacht that Mr Blundy had commissioned, the
first having been built in 2006 by a sister company of Nobiskrug and the second by a
different shipyard in 2017.
5. The contract price was €99,550,000 and the contractual delivery date was 31 August
2022. As is usual, the purchase price was payable in instalments upon reaching stipulated
milestones in the construction process. What was less usual was that the second and third
instalments were to be paid into escrow and only to be released at a much later stage of
the construction. In practical terms this meant that the Contract was substantially self-
financed by Nobiskrug.
6. The Contract also required a parent company guarantee to be provided by Privinvest.
This was issued on about 30 November 2018 (the “Guarantee”), guaranteeing the “due
and punctual performance of all of [ Nobiskrug’s] obligations under the Contract up to
an aggregate maximum amount of €9,955,000…” The amount of the Guarantee (the
“Guarantee Amount”) was equivalent to the amount of the first instalment payable
under the Contract.
7. Both the Contract and the Guarantee were expressly governed by English law but
whereas the Contract contained an LMAA arbitration clause, the Guarantee was subject
to the exclusive jurisdiction of the English courts.
8. It is common ground that the project proceeded smoothly to start with. Chugga Chugg
duly paid the first instalment of the purchase price (around €10 million) to Nobiskrug and
the second instalment (€5 million) into escrow. However, by late March 2020, delays of
around 3 months had accrued for a number of reasons, including financial issues at
Nobiskrug. It is unnecessary to explore these in detail, but there seems to be little doubt
that the company had been badly managed and had concluded a number of contracts,
MRS JUSTICE DIAS DBE
Approved Judgment
Chugga Chugg v Privinvest
including the Contract, which turned out to have been seriously under-priced and badly
co-ordinated leading to capacity shortages at the yard. In late 2019, the old management
team was replaced by, among others, Mr Johan Valentijn, who was brought in as
Managing Director and interim CEO, essentially to sort things out. Mr Safa also injected
funds into Nobiskrug in early 2020 which resulted in an improvement in the situation. It
is undisputed that around 25 March 2020, Nobiskrug proposed a recovery plan which was
accepted by Burgess as being realistic, albeit extremely challenging, and one which might
at least prevent further slippage. It also prepared an updated master schedule which
projected delivery on 30 September 2022, i.e., one month late. At around the same time,
however, the Covid global pandemic was declared and on 30 March 2020, Nobiskrug
emailed a notice of force majeure to Chugga Chugg. In a letter the following day it
further explained that due to the restrictions in force it had taken the decision to close
access to its shipyards.
9. During the course of April 2020, a number of telephone conversations took place
between, variously, Mr Beckett, Mr Blundy, Mr Safa, Mr Valentijn and Mr Fadi Pataq,
Nobiskrug’s Marketing and Sales Director. What exactly was said during these calls is
hotly disputed. Chugga Chugg’s case is that Mr Beckett sought to explore the possibility
of a consensual termination in the light of substantial delays to the construction schedule,
the recent closure of Nobiskrug’s yards and its apparent financial difficulties.
Privinvest’s case is that Mr Beckett stated that Mr Blundy “wanted out” and that this
amounted to a renunciation of the Contract, which it accepted by notice dated 8 June 2020
(the “Nobiskrug Termination Notice”).
10. Chugga Chugg denies that it renounced the Contract but asserts that, even if it did, such
renunciation was thereafter withdrawn or cured and/or that Nobiskrug in any event
affirmed the Contract prior to sending the Nobiskrug Termination Notice. Accordingly,
Nobiskrug’s purported termination was ineffective.
11. For its part, on 17 June 2020, Chugga Chugg served notice pursuant to the Contract
asserting that Nobiskrug was in material breach of contract and calling upon it to cure
such breach within 20 business days. On 16 July 2020, following the expiry of the
stipulated period without any steps having been taken by Nobiskrug, Chugga Chugg
served its own notice of termination (the “Chugga Chugg Termination Notice”).
12. While it was accordingly common ground between Chugga Chugg and Nobiskrug that the
Contract had come to an end, there was a dispute between them as to when and on what
basis it had terminated.
13. On 9 June 2020, Nobiskrug commenced arbitration proceedings against Chugga Chugg
pursuant to an arbitration clause in the Contract and in due course, Mr David Owen QC
was appointed as sole arbitrator. In the arbitration, Nobiskrug claimed damages for
repudiation on the basis that the Contract had been validly terminated by virtue of the
Nobiskrug Termination Notice. Chugga Chugg, however, contended that the only
repudiation was by Nobiskrug and that the Contract had in fact been terminated as a result
of the Chugga Chugg Termination Notice. It counterclaimed the sums already paid to
Nobiskrug. Pleadings were exchanged culminating in Chugga Chugg’s Reply to Defence
to Counterclaim Submissions served on 16 December 2020.
