An oil rig (The Cendor MOPU) was being transported from Texas to Malaysia. During the voyage, three of the four legs suffered damage. The insurers refused liability saying that the damage was the result of inherent weaknesses in the rig.
Held: The insurer’s appeal succeeded. The proximate cause of the loss was not the inherent vice, but the insured peril. Under the 1906 Act the fact that the goods are not reasonably fit in all respects to encounter the ordinary perils of the seas of the adventure insured, does not automatically deprive the assured of cover. There is no equivalent to the provisions relating to time policies, where loss or damage attributable to unseaworthiness at the outset known to the assured is excluded.
Lord Mance, Lord Collins, Lord Clarke, Lord Dyson, Lord Saville
[2011] UKSC 5, UKSC 2010/0006, [2011] 1 All ER 869, [2011] 1 Lloyds Rep 560, [2011] Bus LR 537, 2011 AMC 305
Bailii, Bailii Summary, SC Summ, SC
Marine Insurance Act 1906 55(1)
England and Wales
Citing:
At first instance – Global Process Sytems Inc and Another v Syarikat Takaful Malaysia Berhad ComC 31-Mar-2009
The Cendor MOPU
The insurance company had refused a claim after the failure of an oil rig, saying that the loss of the rig legs during transit was the inevitable consequence of the voyage, and that since insurance was against risks, not certainties, they were under . .
Appeal from – Global Process Systems Inc and Another v Berhad CA 17-Dec-2009
An oil rig suffered major damage in transit in rough seas. The insurers repudiated liability saying that the damages was the result of a natural vice rather than perils at sea.
Held: The fact that the sea conditions were within the range of . .
Cited – J J Lloyd Instruments Ltd v Northern Star Insurance Co Ltd (The ‘Miss Jay Jay’) CA 1987
The owner claimed for damage to the hull of the Jay Jay.
Held: Where there are two operative causes, one covered by the policy risks and one not, then provided that the second cause is not an excluded peril, the Assured can recover. There was . .
Cited – Wayne Tank and Pump Company Ltd v Employers Liability Assurance Corporation Ltd CA 1973
The court discussed the effect of an exception clause in an insurance policy: ‘The effect of an exception is to save the insurer from liability for a loss which but for the exception would be covered. The effect of the cover is not to impose on the . .
Cited – Thomas Wilson Sons and Co v Owners of Cargo per the ‘Xantho’ HL 14-Jul-1887
A cause of damage otherwise satisfying the established definition may be a peril of the sea even though caused by a shipowner’s negligence. Lord Herschell said: ‘If that which immediately caused the loss was a peril of the sea, it matters not how it . .
Cited – Soya GmbH Mainz Kommanditgesellschaft v White CA 1982
Where insured goods deteriorated during a passage, not because they had been subjected to some external fortuitous accident or casualty, but because of their natural behaviour in the ordinary course of the voyage, then such deterioration amounted to . .
Cited – Soya GmbH Mainz Kommanditgesellschaft v White HL 1983
The cargo, soya beans, was insured against heating, sweating and spontaneous combustion risks. It arrived in a heated and deteriorated condition. The insurers denied liability saying that the proximate cause of the damage was inherent vice or nature . .
Cited – T M Noten BV v Hardin 1989
Industrial leather gloves were shipped from Calcutta to Rotterdam. On arrival the good were found to be wet, stained, mouldy and discoloured.
Held: The damage had been caused by moisture, which had been absorbed by the goods in the humid . .
Cited – T M Noten BV v Harding CA 1990
Bingham LJ wasasked as to what was meant by the proximate cause of an accident at sea, and said: ‘Unchallenged and unchallengeable authority shows that this is a question to be answered applying the common sense of a business or seafaring man.’ . .
Overruled – Mayban General Assurance Bhd, AMI Insurans Bhd, Malaysian International Insurance Bhd, Syarikat Takaful Malaysia Bhd v Alstom Power Plants Ltd, Alstom T and D Ltd QBD 11-May-2004
An electrical transformer was shipped from Ellesmere Port to Rotterdam and there transferred to a container vessel for carriage to Lumut. Severe weather was encountered, but not such as a commercial person would regard as falling outside the range . .
Cited – E D Sassoon and Co v Western Assurance Co PC 1912
(Shanghai) A cargo of opium was damaged as a result of ingress of water through a rotten hull.
Held: Losses occasioned by the incursion of water into a vessel’s hull owing to the defective, deteriorated or decayed condition of the hull or . .
Cited – Canada Rice Mills Ltd v Union Marine and General Insurance Co Ltd PC 1941
Cargo was on a voyage from Rangoon to British Columbia and insured against perils of the sea. It was damaged by reason of heating occasioned when cargo hold ventilators were closed to prevent ingress of water in heavy weather. The Court of Appeal of . .
Cited – J J Lloyd Instruments Ltd v Northern Star Insurance Co Ltd ‘The Miss Jay Jay’ 1985
Mustill J considered liability under a marine insurance where damage was suffered when the sea state was within what might reasonably be anticipated: ‘The cases make it quite plain that if the action of the wind or sea is the immediate cause of the . .
Cited – Steel v State Line Steamship Co 1877
An insured ship should be ‘in a condition to encounter whatever perils of the sea a ship of that kind and laden in that way may be fairly expected to encounter.’ However, an express exception of negligence did not cover loss due to unseaworthiness. . .
Cited – Nelson Marketing International Inc v Royal and Sun Alliance Insurance Co. of Canada 28-Jun-2006
(British Columbia Court of Appeal) Shipments of laminated truck flooring were damaged by moisture absorbed by the flooring in the course of manufacture, which on the voyage had evaporated and condensed in circumstances which were not established to . .
Cited – Robert Thompson, Joseph Lowes Thompson, And John Thompson v Thomas Duck Hopper 23-Feb-1856
There is not in general an implied warranty of seaworthiness in a time policy of assurance. . .
Cited – NE Neter and Co Ltd v Licenses and General Insurance Co Ltd 1944
A cargo of casks and bags of china clay out-turned damaged, as a result of the stoving in of the casks on a voyage during which there had been heavy weather.
Held: The claim failed. The plaintiffs had not proved that the proximate cause of the . .
Cited – Mountain v Whittle HL 1921
The insured vessel, a houseboat, was towed alongside a tug some seven and half miles to Northam. Her topside seams were leaky and defective. The breast wave thrown up by the two vessels caused water to mount up against the seams and enter and sink . .
Cited – Leyland Shipping Co Ltd v Norwich Union Fire Insurance Society Ltd HL 1918
The ship was insured against the perils of the sea by a policy containing a warranty against all consequences of hostilities. While voyaging to Le Havre, she was torpedoed by a German submarine 25 miles from port. She began to settle by the head, . .
Cited – Dudgeon v Pembroke 1877
If there are two concurrent causes of a loss, one falling within the policy, the other simply not covered by the terms of the policy, the insured may recover. . .
Cited – Thames and Mersey Marine Insurance Co Ltd v Hamilton, Fraser and Co 1887
Lord MacNaghten noted that: ‘In marine insurance it is above all things necessary to abide by settled rules and to avoid anything like novel refinements or a new departure’. . .
Cited by:
Cited – Navigators Insurance Company Ltd and Others v Atlasnavios-Navegacao Lda SC 22-May-2018
The vessel had been taken by the authorities in Venezuela after drugs were found to have been attached to its hull by third parties. Six months later it was declared a constructive total loss. The ship owners now sought recovery of its value from . .
Lists of cited by and citing cases may be incomplete.
Insurance
Updated: 01 December 2021; Ref: scu.428360