The ship was later involved in a collision, and the third party sought to assert a claim to the insurance proceeds in priority to the bank's rights under the security agreement.

The Court of Appeal held that the choice of law rules relating to contracts should be applied, and accordingly, the bank prevailed.

The owners of the Mount I (Five Star General Trading LLC) had purchased the vessel with a loan from Raiffeisen Zentralbank Österreich AG, an Austrian bank.

Her sale realised US$3,082,805 which was held by the Malaysian court pending the resolution of the priority dispute between the Austrian bank and the Taiwanese owners of the ICL Vikraman, but those proceeds were insufficient to fully discharge either claim (much less both of them).

[6] Both the Austrian bank and the Taiwanese owners of the ICL Vikraman sought to attach the insurance proceeds relating to the Mount I.

The Taiwanese shipowners claimed that this was not a question of contract, but of property, and the insurance proceeds were deemed to be located where the debtor (ie.

[7] In the High Court the matter came before Longmore J, who commented in the course of his judgment that it was like "being set an examination question on the applicable law".

"[10] He affirmed and restated the general principle set out in Macmillan Inc v Bishopsgate Investment Trust plc (No 3) [1995] EWCA Civ 55, [1996] WLR 387.

[12] Mance LJ then noted that the three-stage process cannot therefore be pursued by taking each step "in turn and in isolation".

"[T]he conflict of laws does not depend (like a game or even an election) upon the application of rigid rules, but upon a search for appropriate principles to meet particular situations.

Conversely, he pointed out that "contractual rights" were to be given an autonomous meaning, taking an internationalist approach, rather than looking at strictly English concepts of contract and property.

Mance LJ noted that "[u]nder English law, an assignment may occur in a pot-pourri of three different forms, with variegated terminology.