Scottish government faces £5m bill over shipyard takeover

Image source, PA Media

Image caption, Ferguson went into administration following a dispute over the construction of two ferries

28 January 2022

The Scottish government faces a £5m bill to an insurance firm after a High Court ruling over its takeover of the Ferguson Marine shipyard.

Caledonian Maritime Assets Limited (CMAL) sought to rectify an agreement with HCC International Insurance.

The firm said it was owed money as a result of the way ministers bought the shipyard when it was in administration.

A summary judgment was granted in favour of HCC. The Scottish government, which owns CMAL, said it was aware.

The ruling came after the government lost another case against HCC at the Court of Session in May last year.

The Port Glasgow shipyard is constructing two ferries - Glen Sannox and an unnamed ship known as Hull 802 - which were originally meant to enter service in 2018 but are still unfinished, with costs spiralling.

Problems with the order dragged the yard back into administration in 2019 and since then it has been wholly-owned by the Scottish government.

The decision from Deputy High Court Judge Simon Gleeson was published on Friday

'Highly unwelcome'

Judge Gleeson said: "It is easy to see why this decision seems to have caused so much anger and irritation amongst the Scottish ministers.

"In paying for the business of FMEL (Ferguson Marine) by reducing FMEL's liabilities to them, they believed that they were simply transferring their own money from one pocket to another, with the transaction having no impact on their overall obligations.

"The discovery that the choice of transaction structure had resulted in their being required to pay a little over £5million to a third party must have been highly unwelcome."

Image source, Getty Images

Image caption, Ferguson went into administration following a dispute over the construction of two ferries

He added: "The terms of this deed produced an outcome which came as a surprise to all those involved in its negotiation, producing a significant windfall gain for one party at the expense of the owner of the other."

A Scottish government spokesman said: "We are aware of a summary judgment that has been made in the English courts in relation to the claim."

The first of the Ferguson Marine ferries, the Glen Sannox, is currently expected to be ready until some time between July and September.

The second is not due for completion until April to July 2023.