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 the insurers. The Court of Appeal had rejected the claim allowing the insurers to rely on an exclusion in the clauses relating to malicious acts by a third party.
Held: The ship-owners’ appeal failed. The acts complained of were not aimed at the owners, but at the ship, and that was the essential of the exclusion. ‘clause 1.5 is not apt to cover the present circumstances, and . . the premise on which this appeal reaches the Supreme Court is incorrect. ‘
Lord Mance (Deputy President), Lord Sumption, Lord Hughes, Lord Hodge and, Lord Briggs
[2018] UKSC 26, [2018] 2 WLR 1671, [2018] WLR(D) 317, [2018] 2 All ER (Comm) 671, [2019] AC 136, [2018] 4 All ER 589, [2018] 2 WLR 1671, [2018] 2 Lloyds Rep 1, [2018] Lloyds Rep IR 448
Bailii, Bailii Summary, SC, SC Summary, SC 180320 am Hearing, SC 180320 pm Hearing, SC Summary Video, WLRD
Institute War and Strikes Clauses 1/10/83 with additional perils, cls 1.5, 4.1.5
England and Wales
Citing:
Preliminary Issues ComC – Atlasnavios-Navegacao, Lda v Navigators Insurance Company Ltd and Others ComC 29-Mar-2012
Trial of preliminary issues in an action in which the Claimant claims under its war risks insurance for the constructive total loss of the vessel ‘B Atlantic’ (‘the Vessel’). Between 7 and 12 August 2007 the Vessel loaded a cargo of coal at . .
At ComC – Atlasnavios-Navegacao, LDA v Navigators Insurance Company Ltd and Others ComC 8-Dec-2014
The claimant’s vessel and its crew had been detained after illegal drugs were found to be attached to its hull in port in Venezuela by ship crew members. The ship owners asserted effective total loss.
Held: The owners were entitled to recover . .
At CA – Atlasnavios-Navegacao, Lda v Navigators Insurance Company Ltd and Others CA 1-Aug-2016
(The B Atlantic) The court was asked whether Flaux J was right to find that the owners of a ship were entitled to be indemnified by the insurers in respect of the constructive total loss of the vessel under war insurance after detention ‘by reason . .
Cited – Nishina Trading Co Ltd v Chiyoda Fire and Marine Insurance Co Ltd (The Mandarin Star) CA 1968
The ship owners had not been paid two months of charter hire due to them, so the master took the cargo. The cargo did not belong to the defaulting charterer, however, but rather to an innocent third party. The insurance clause provided that ‘it is . .
Cited – Brough v Whitmore 11-Feb-1791
Provisions sent out in a ship for the use of the crew, are protected by a policy of assurance on the ship and furniture. . .
Cited – Rickards v Forestal Land, Timber and Railways Co Ltd CA 1941
MacKinnon LJ said: ‘There are two massive volumes of Arnould which purport to deal with The Law of Marine Insurance. They now contain over 1800 pages, and the Marine Insurance Act, 1906, is entitled ‘An Act to codify the Law relating to Marine . .
Cited – Panamanian Oriental Steamship Corpn v Wright (The ‘Anita’) 1970
. .
Cited – Panamanian Oriental Steamship Corporation v Wright (The Anita) CA 1971
The burden is on Underwriters to bring themselves within an exclusion clause they seek to rely on.
Lord Denning distinguished between what might be described as justified or ‘connected’ political interference on the one hand and unjustified or . .
Cited – Shell International Petroleum Co Ltd v Gibbs (The ‘Salem’) QBD 1981
Conspirators disposed of a cargo of oil dishonestly, in South Africa, in breach of sanctions and with a view to profit. Mustill J. considered whether this loss was caused by persons acting maliciously, that is out of spite or ill-will or the like. . .
Cited – Shell International Petroleum Co Ltd v Gibbs (The ‘Salem’) CA 1982
The conspirators purchased and manned a tanker, The Salem. They chartered her to an innocent charterer, Pontoil SA, for a voyage to Europe carrying a cargo of oil which Pontoil acquired from Kuwait Oil Co in Mina al Ahmadi and agreed to resell to . .
Cited – North Star Shipping Ltd and others v Sphere Drake Insurance Plc and others ComC 22-Apr-2005
. .
Cited – Sunport Shipping Limited, Prometheus Maritime Corporation, Celestial Maritime Corporation, Surzur Overseas Limited v Tryg-Baltica International (UK) Ltd (Formerly Know As Colonia Baltica Insurance Ltd) and others CA 24-Jan-2003
(The ‘Kleovoulos of Rhodes’) A large quantity of cocaine was discovered by divers behind a grille in a sea chest at the vessel’s discharge port, Aliveri – having been placed there by unknown third persons at the load port in Colombia, South America. . .
Cited – Allen v Flood HL 14-Dec-1898
Tort of Malicicious Inducement not Committed
Mr Flood had in the course of his duties as a trade union official told the employers of some ironworkers that the ironworkers would go on strike, unless the employers ceased employing some woodworkers, who the ironworkers believed had worked on . .
Mentioned – Regina v Cunningham CCA 1957
Specific Intention as to Damage Caused
(Court of Criminal Appeal) The defendant wrenched a gas meter from the wall to steal it. Gas escaped. He was charged with unlawfully and maliciously causing a noxious thing, namely coal gas, to be taken by the victim.
Held: Byrne J said: ‘We . .
Cited – Regina v G and R HL 16-Oct-2003
The defendants, young boys, had set fire to paper and thrown the lit papers into a wheelie bin, expecting the fire to go out. In fact substantial damage was caused. The House was asked whether a conviction was proper under the section where the . .
Cited – Cory v Burr HL 30-Apr-1883
In a time policy of marine insurance on ship the ordinary perils insured against (including ‘ barratry of the master ‘) were enumerated, and the ship was warranted ‘free from capture and seizure and the consequences of any attempts thereat.’ In . .
Cited – In re Etherington and the Lancashire and Yorkshire Accident Co CA 8-Feb-1909
By the terms of a policy an accident insurance company undertook, if, at any time during the continuance of the said policy, the insured should sustain any bodily injury caused by violent, accidental, external, and visible means, then, in case such . .
Cited – Zurich Insurance Plc UK Branch v International Energy Group Ltd SC 20-May-2015
A claim had been made for mesothelioma following exposure to asbestos, but the claim arose in Guernsey. Acknowledging the acute difficultis particular to the evidence in such cases, the House of Lords, in Fairchild. had introduced the Special Rule . .
Cited – Royal Greek Government v Minister of Transport (The Ann Stathatos) 1949
The ship had been chartered, but the crew refused to sail without an escort, in war conditions. The charterer sought to be excused liability under a clause making allowance for ‘insufficiency of crew’.
Held: The presumption against surplusage . .
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 – Handelsbanken v Dandridge and others CA 30-Apr-2002
The Aliza Glacial
Construction of two standard clauses in the Institute War and Strikes Clauses Hulls-Time, 1983 edition. Potter LJ treated the vessel’s loss, following the owners’ refusal to meet an outrageous ransom demand by a terrorist organisation, as outside . .
Cited – Melinda Holdings Sa v Hellenic Mutual War Risks Association (Bermuda) Ltd ComC 18-Feb-2011
The claimant sought to assert its claim for payment under war risks insurance with the defendant after the insured ship was arrested and detained in Cairo. . .
Cited – Global Process Systems Inc and Another v Berhad SC 1-Feb-2011
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: . .
Lists of cited by and citing cases may be incomplete.
Updated: 25 July 2021; Ref: scu.616316