By RASHAD ROLLE

Tribune News Editor

rrolle@tribunemedia.net

THE Judicial Committee of the Privy Council has upheld a lower court ruling requiring the owners of a luxury yacht, Maratani X, to repay more than $2.7m, rejecting claims that the vessel was sold recklessly and below value.

The appeal, lodged by Bahamian businessmen Garet and Mark Finlayson, centred on the 2016 sale of the troubled superyacht by a lender after the Finlayson-backed company Kurc Limited defaulted on a multimillion-dollar loan. The appellants contended that the lender, acting as mortgagee, failed to take reasonable steps to secure the best possible price for the vessel, alleging negligence, recklessness, and prejudice to their financial interests.

But in a detailed judgment delivered by the Board, the Privy Council rejected all three grounds of the appeal, affirming the decisions of both the trial court and the Court of Appeal of The Bahamas.

The case stems from a 2001 loan agreement under which the lender provided $9.68m to Kurc Limited for the construction of the Maratani X. The project soon ran aground due to design flaws and significant delays, with the vessel ultimately plagued by operational and mechanical issues.

By 2016, Kurc had defaulted on the loan, prompting the lender to repossess the yacht. The lender spent approximately $700,000 on urgent repairs before listing the Maratani X for sale. After receiving multiple low offers and facing continued deterioration, the lender sold the yacht for $2.43m, considerably less than its original listing price of $19m.

The Finlaysons challenged the sale, arguing that the lender had failed its legal duty as mortgagee. However, both the original trial judge and the Court of Appeal found that the lender had acted reasonably under the circumstances. The Privy Council agreed, emphasizing that the appellants failed to provide any expert evidence proving a breach of duty and did not challenge the admissibility of critical documents presented during trial.

On the first ground of appeal, the Board held that the burden of proof rightly rested with the appellants, dismissing their contention that the lender had to prove it acted appropriately. “Absent a conflict of interest or a self-dealing sale, the mortgagor bears the burden of proving breach,” the ruling stated.

The second ground, alleging that the loan agreement was inadmissible due to non-payment of stamp duty, was swiftly dismissed. The Board concurred with the Court of Appeal’s finding that the relevant documents were executed outside The Bahamas and governed by foreign law, placing them beyond the reach of Bahamian revenue statutes.

Finally, the third ground, complaining of a 14-month delay in the trial judge’s ruling, was rejected. While the delay was acknowledged as “inexcusable,” the Privy Council found it had no bearing on the fairness or accuracy of the judgment.

The Finlaysons remain liable for the outstanding loan amount, interest, and associated legal costs.