The Commercial Court has ordered Hellenic Mutual War Risks Association to pay out on a claim by prominent Greek ferry operator George Ventouris.
The claim relates to the scuttling of the Grecia Express, which sank in the Greek port of Aegion in March 1994.
Ventouris brought the claim on the basis that the deliberate sinking of the ferry was brought about by the "malicious acts of persons unknown".
The insurer defended the claim, alleging Ventouris himself had caused the ferry to be scuttled.
Hellenic also alleged that Ventouris had scuttled his own luxury powerboat two months before the ferry accident.
However, the court found Ventouris was not responsible for the scuttling of the ferry or the accidental loss of his powerboat.
Hellenic must now pay out the insured cost of the ferry, wreck removal costs and anti-pollution expenses amounting to $9.9m (£6.95m), plus interest and costs.
Nicholas Hamblen QC and Michael Coburn, who were instructed by Clyde & Co, represented Ventouris.
They worked alongside well-known Piraeus shipping lawyer George Bairactaris.