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References
S.56(1) Marine Insurance Act 1906; Bennett, H (1986) The Law of Marine Insurance, Clarendon Press, Oxford, Ch 18.
S.56(3) Marine Insurance Act 1906.
In part 3 of the new 1/11/2002 clauses, clause 45 authorises the leading underwriters designated in the slip or policy to deal with a range of claims-related matters on behalf of all underwriters subscribing to the insurance. This clause is a development of reforms set out in the Lloyd’s Market Principles. (Wall DJ (2003) International Hull Clauses 1/11/02: A Commentary, Shipping & Trade Law, Vol.3, No 1).
Wall DJ (2003) International Hull Clauses 1/11/02: A Commentary, Shipping & Trade Law, Vol 3, No 1.
As per section 56(2). Hodges S (1999) Cases and Materials on Marine Insurance Law, Cavendish Publications, p 15.
Mustill MJ & Gilman JCB (1981) Arnould’s Law of Marine Insurance and Average, 16th edn, Vol I, Stevens, p 963.
O’May D (1993) Marine Insurance Law and Policy, LLP p 411
(1836) 3 Bing NC 266.
Hodges S (1999) Cases and Materials on Marine Insurance Law, Cavendish-Publications, p 15; Also, Lord Abinger stated in this case: “...if the goods, once damaged by the perils of the sea and necessarily landed before termination of the voyage, are in such a state, that they...cannot be re-shipped with safety to any vessel... if it be sure that before termination of the original voyage they would disappear and assume a new form losing all their original character,..... the loss is in its nature total to him who cannot recover them due to either their annihilation or any other insuperable obstacle the underwriter engages that the assured object......... the underwriter engages that the assured object will arrive safely in its’ destined termination. If, in the progress of the voyage it becomes totally destroyed or annihilated..... he is bound by the very letter of his contract to pay the sum insured.”
If the assured, by reason of those perils, is irretrievably and permanently deprived of present possession and control over it, as well as of any reasonable hope or possibility on future recovery of possession or further prosecution of the adventure upon it, that is then the case of an actual total loss-irrespectively of the assured electing or not to treat it as such-and notice of abandonment is not needed in accordance also with the leading legal principle of “lex non cogit ad absurdum”. However, if there is any doubt as to whether the assured has been “irretrievably deprived” of the subject-matter insured, the assured should in practice give notice of abandonment to underwriters, leaving it to be decided later whether the loss was an actual total loss or not; as in giving this notice, the assured forfeits nothing, should the notice prove to be unnecessary, for, then the total loss proves to be actual. In the past, if any remains of the thing insured or money corresponding to profit from it were to be retrieved, they were considered as a salvage entitled to the underwriters after the payment of total loss, and that is why in the past an absolute total loss in insurance law was treated and termed as a ’salvage loss without abandonment’ (Mustill MJ & Gilman JCB (1981) Arnould’s Law of Marine Insurance and Average, 16th edn, Vol I, Stevens, p 963).
(1824) 2 B & C 691.
(1816) Holt NP 423.
(1898) AC 593.
(1927) AC 698.
[1997] 1 Lloyds Rep 586; Hodges S (1999) Cases and Materials on Marine Insurance Law, Cavendish Publications, p 15.
O’May D (1993) Marine Insurance Law and Policy, LLP, Ch.14
Hodges S (1999) Cases and Materials on Marine Insurance Law, Cavendish Publications, Ch 15.
Koster v Reed (1826) 6 B & C, 19; Cohen v Hinckley (1809) 2 Camp 51.
O’May D (1993) Marine Insurance Law and Policy, LLP, Ch 14.
Hodges S (1999) Cases and Materials on Marine Insurance Law, Cavendish Publications, Ch 15.
(1895) 2 QB 196.
See Francis v Boulton (1895) 65 QB.
[1973] 2 Lloyds Rep 442.
(1895) 1 Com Cas 217.
As happened in the case of Roux v Salvador (1836) 3 Bing NC 266.
O’May D (1993) Marine Insurance Law and Policy, LLP, Ch 14.
S. 56 (5) of the Marine Insurance Act 1906.
(1868) LR 3.
O’May D (1993) Marine Insurance Law and Policy, LLP, Ch 14.
O’May D (1993) Marine Insurance Law and Policy, LLP, Ch 14; Willes J remarked in Barker v. Janson [(1868) LR 3CP.303]: “...if a ship is so injured that it cannot sail without repairs and cannot be taken to a port at which the necessary repairs can be executed, there is an actual total loss, for that has ceased to be a ship which ever can be used for the purposes of a ship”.
(1925) 21 LI L Rep 30 KBD.
(1927) 137 L.T. 709, P. C.
(1936) 56 LI. L. Rep. 163 KBD.
As J. Porter has stated: “....no one could say that the vessel was irretrievably lost to the owners.....loss by barratry is not necessarily an actual total loss......and in this case......there was no actual total loss”.
St. Margaret’s Trust Ltd v Navigators And General Insurance Co Ltd (1949) 82 LI L Rep 752 KBD.
(1900) 2 QB 519 CA.
(1872) LR 7 CP 341.
See Iredale And Another v China Traders Insurance Co (1900) 2 QB 519 CA.
See Price And Another v Maritime Insurance Co Ltd (1900) 5 Com Cas 332 (1901) 2 KB 412 CA.
(1837) LR 6 HL 83.
And also that in case there has been a constructive total loss of the vessel concerned, there is no requirement for a notice of abandonment to be given in respect of the total loss of freight (Hodges S (1999) Cases and Materials on Marine Insurance Law, Cavendish Publications, Ch 15).
(1896) 1 QB 123; Hodges S (1999) Cases and Materials on Marine Insurance Law, Cavendish Publications, Ch 15.
Hodges S (1999) Cases and Materials on Marine Insurance Law, Cavendish Publications, Ch.15.
(1873) 2 Asp MLC 435.
Hodges S (1999) Cases and Materials on Marine Insurance Law, Cavendish Publications, Ch 15.
[1975] 1 Lloyd’s Rep. 452.
Hodges S (1999) Cases and Materials on Marine Insurance Law, Cavendish Publications, Ch 15.
Moore v Evans [1918] AC 185 HL.
Ivamy ERH (1986) General Principles of Insurance Law, 5th edn, Butterworths, p 362.
Hodges S (1999) Cases and Materials on Marine Insurance Law, Cavendish Publications pp 362–365.
[1939] AC 371 HL.
[1941] 3 All ER 62, HL.
[1949] 1 KB 555.
Hodges S (1999) Cases and Materials on Marine Insurance Law, Cavendish Publications, pp 623–671; The case of Irving v Hine [1949]1 KB 555] involves a trawler which was being towed to a dry dock, during WWII. She stranded and as a result was severely damaged. At all material times the assured would have been unlikely to obtain a license to repair her or to place her in a dry dock within reasonable time. The assured claimed she was a constructive total loss. It was held that, since the type of loss did not fall within any of the heads of loss stated in s.60 of the Marine Insurance Act 1906, there was no constructive total loss. Thus, the assured could only claim for a partial loss (Ivamy ERH (1986) General Principles of Insurance Law, 5th edn, Butterworths, p 363).
(1874) LR 9.
(1916)1 AC 650.
[1945] 2 All ER 357, CA.
[1928]45 TLR 54 CA.
Lind v Mitchell [1928]45 TLR 54 CA, Read v Bonham (1821)3 Brod & B 147, Court Line Ltd v “Lavington Court” [1945]78 LlL Rep 390, CA.
Thus, abandonment, in s. 60(1) of the Marine Insurance Act 1906 means, in the context of a ship, either leaving the ship or giving it up for lost, the former being the physical act of vacating the property and the latter a decision based on economics and business expediency (Bennett, H (1986) The Law of Marine Insurance, Clarendon Press, Oxford, p 367).
[1918] AC 185 HL.
[1915]1 KB 922.
[1919]1 KB 189.
Bennett, H (1986) The Law of Marine Insurance, Clarendon Press, Oxford, p 368.
Owners of the Bamburi v Compton (The Bamburi) [1982] 1 Lloyd’s Rep 312.
See s. 60(2)(ii) of the Marine Insurance Act 1906 & cases: Allen v Sugrue (1828)8 B&C 561, Phillips v Nairne (1847)4CB 343, Irving v Manning (1847)1 HL Cas 287, Moss v Smith (1850) 19 LJCP 225. The Marine Insurance Act 1906 requires the value of the wreck to de disregarded when determining the cost of repairs (Hall v Haymann [1912]2 KB 5).
[1903] 1 KB 811.
[1903] 1 KB 811.
Bennett H (1986) The Law of Marine Insurance, Clarendon Press, Oxford, pp 368–370.
[1992]13 Ll L Rep 26 KBD.
Rodocanachi v Elliot (1873)LR 9 CP 518.
O’May D (1993) Marine Insurance Law and Policy, LLP pp 415–436.
(1975)1 LI L Rep 452.
(1866) LR 2 CP 204.
Rosetto v Gurney (1851)11 CB 176, Reimer v Ringrose (1851)6 Exch. 263.
In Russian Bank For Foreign Trade v Excess Insurance Company Limited [1918]2 KB 123, the assured offered to release his underwriters from all liability, if they agreed to pay the insured value of a shipment of barley, less its’ value at the port of loading, from which the vessel was prevented from sailing owing to the closure of the Dardanelles in 1914. It was held that the offer to the underwriters suggesting a compromise was not a good notice of abandonment because the offer was conditional.
Gernon v Royal Exchange Assurance [ 1815]6 Taunt 383.
Currie & Company v Bombay Native Insurance Company (1869)LR 3PC.
For, it is only inserted so as to ascertain the amount due to the assured in the event of loss and for no other purpose (See s. 62(8) of Marine Insurance Act 1906).
As per Lord Wright in Middows v Robertson & Other Test Cases [1941]70 Ll L R 173.
[1926]25 Ll L Rep 546 CA.
S. 62(9) of Marine Insurance Act 1906; Uzzielli v Boston Marine Insurance Co (1884)15 QBD.
Hudson v Harrison [1921]3 Brod. & Bing 97 contrasted with Captain JA Cates Tug and Wharfage Co Ltd v Franklin Insurance Co [1927] 137 L.T. 709.
See the case of Norwich Union Fire Insurance Society Limited v William H. Price Ltd [1934] AC 455, in which the true facts were neither known to the assured nor to the underwriters at the time the assured gave notice of abandonment.
See s. 62(6) of the Marine Insurance Act 1906;. O’May D (1993) Marine Insurance Law and Policy, LLP, pp 415–436; As also per J. Atkinson in Pesquerias y Secaderos de Bacalao De Espana SA v Beer [1946] 79 LI L Rep 417.
(1873) LR 6 HL 83.
(1873)3 CPD 467.
No notice of abandonment is required, and still, there can be a claim for a constructive total loss of ship or goods, provided that the ship or goods are of no benefit to the insurer; (s. 62(7) of the Marine Insurance Act 1906). Also, in the case of Black King Shipping Corporation v Massie, (“The Litsion Pride”) [1985] 1 Lloyd’s Rep 437] where a vessel was sunk by a missile during the war between Iraq and Iran and part of the defence was that a notice of abandonment was not given, Hirst J. stated that a notice of abandonment was immaterial in the circumstances, as there was no possibility of benefit to the underwriters in that they could not salvage the wreck because of the hostilities which were still taking place.
Kastor Navigation Co Ltd v AGF MAT (“The Kastor Too”) [2003] 1 Lloyd’s Rep, 296.
The first claimant was the registered owner of the vessel. The defendants subscribed to insurance of his interest in the hull and machinery of the vessel against marine risks for the period of 24 months at Dec. 30, 1999, at 80% of the risk. The insured perils included fire, explosion and perils of the sea.
In Kaltenbach v Mackenzie [1878] 3 CPD 467 at 471–475, Brett LJ. described the origin of the necessity of giving a notice of abandonment and explained its function. He said:“With regard to the notice of abandonment,...in [no] contract of indemnity, except in the case of contracts of marine insurance, a notice of abandonment is required....but in the case of a constructive total loss it is necessary, unless it be excused. It seems to me to have been introduced into contracts of marine insurance — as many other stipulations have been introduced — by the consent of shipowner and underwriter, and so to have become part of the contract, and a condition precedent to the validity of a claim for a constructive total loss. The reason why it was introduced is on account of the peculiarity of marine losses. These losses do not occur under the immediate notice of all the parties concerned. A loss may occur in any part of the world. It may occur under such circumstances that the underwriter can have no opportunity of ascertaining whether the information he received from the assured is correct or incorrect. The assured, if not present, would receive notice of the disaster from his agent, the master of the ship. The underwriter in general can receive no notice of what has occurred, unless from the assured, who is the owner of the ship or the owner of the goods, and there would therefore be great danger if the owner of a ship or of goods — that is the assured — might take any time that he pleased to consider whether he would claim as for a constructive total loss or not — there would be great danger that he would be taking time to consider what the state of the market might be, or many other circumstances, and would throw upon the underwriter a loss if the market were unfavourable, or take to himself the advantage if the market were favourable....I think that it should be a part of the contract and a condition precedent that, where the claim is for a constructive total loss, there must be notice of abandonment, unless there were circumstances excusing it.” None of the reasons which Brett L.J. thought had informed agreement of the condition precedent would lead to the conclusion that an insured in such circumstances ought not to be permitted to recover for a constructive total loss, at any rate not simply on account of failure to serve notice of abandonment before the vessel becomes an actual total loss by operation of a peril other than that which has caused the constructive total loss (Andrewartha J & Riley N (1993) English Maritime Law Update, 33 (3)JMLC 329).
Hodges S (1999) Cases and Materials on Marine Insurance Law, Cavendish Publications Ch 16.
Lambeth RJ (1986) Templeman on Marine Insurance: Its Principles and Practice, 6th edn, Pitman, p 253.
Particular average claims on ship are dealt with in s. 69 of the Marine Insurance Act 1906, under the heading “measure of indemnity”. S. 70 of the Marine Insurance Act 1906, provides for the measure of indemnity in cases of particular average on freight. S. 71 of the Marine Insurance Act 1906, provides for the measure of indemnity in cases of particular average on goods, the first part dealing with cases of valued policies and the other part dealing with unvalued policies. S. 72 of the Marine Insurance Act 1906 deals in its first subsection with cases where different species of property are insured under one valuation, whereas the second subsection provides for cases where there is no means of arriving at the insurable value of the part lost and thus stipulates that in order to apportion the insured value, the net arrived sound values of the different species of goods may be utilised (Lambeth RJ (1986) Templeman on Marine Insurance: Its Principles and Practice, 6th edn, Pitman, p 253).
Bennett, H (1986) The Law of Marine Insurance, Clarendon Press, Oxford, Ch 18.
Bennett, H (1986) The Law of Marine Insurance, Clarendon Press, Oxford, Ch 18.
S. 66 (1),(2) of the Marine Insurance Act 1906; The whole foundation of general average is contribution. All persons benefiting from such a loss must make a “general average contribution”, i.e. they must contribute according to the value of their benefited interests to the amount of the loss ( s.66(3) of the Marine Insurance Act 1906). The owner of the interest which has been saved, has to make a contribution to the party who has sacrificed his property or expended money to save the whole venture. The liability of the interested parties to make a contribution is declared in s.66(3) of the Marine Insurance Act 1906; whereas the liability of the insurer is embodied in s.66(4) and 66(5) of the Marine Insurance Act 1906; In Watson v Firemen’s Fund Insurance [(1927)127 LT 754] during the course of a voyage, the master saw smoke and thought the vessel’s hold was on fire so he caused high-pressure steam to be turned into the hold so as to put out the supposed fire and as a result the insured cargo was damaged by the steam. The assured claimed an indemnity on the ground that a general average loss had been incurred. It was held that such a loss did not exist as the danger was not a real one but, instead, the masterwas merely mistaken. In the case of Societe Nouvelle d’ Armement v Spillers & Bakers Ltd, [[1917] 1 KB 865] an action was brought by the owners of a sailing vessel, to recover from the charterers who were the owners of the cargo a contribution towards the cost of hiring a tug to tow the vessel owing to the presence of enemy submarines in the area. It was claimed, by the owners of the vessel, that the sum paid for the hire of the tug was a general average expense. The claim failed on the ground that there was no clear evidence that the vessel and her cargo were being exposed to any extra and abnormal peril.
Austin Friars Steamship Co Ltd v Spillers & Bakers Ltd [1915]1 KB 833.
And is only allowable in general average so far as these essentials are complied with; See Anderson, Tritton & Co v Ocean SS Co (1884)5 Asp MLC 401.
For instance, in the case of jettison, if water gets into the hold during the act of jettison, the damage caused to cargo by the water is allowable in general average equal with the value of the cargo jettisoned, the reason being that the risk of incurring such damage or the likelihood of its happening would have been present in the mind of those who resolved to make the primary sacrifice; General average losses and contributions are only recoverable where an insured peril has led to the general average act. If the assured mistakenly believes that there is a peril in operation, and a sacrifice is made accordingly, the insurers are not liable. In the case of Joseph Watson & Son Ltd v Firemen’s Fund Insurance Co of San Fransisco, (1922)2 KB 355, an imagined peril was afterwards found not to have existed and the loss was not recoverable as a general average loss but only in connection with avoidance of a peril insured against.
Lambeth RJ (1986) Templeman on Marine Insurance: Its Principles and Practice, 6th edn, Pitman, Ch 12.
(1866) LR 1 CP 535.
Same, the duty of “sue and labour” is applicable to cargo insurance where it is usually accompanied by a similar clause known as the forwarding charges clause (Hodges S (1999) Cases and Materials on Marine Insurance Law, Cavendish Publications, Ch 18).
Athens Court of First Instance: ППρАϑ 1803/81 ЕЕμπδ 33,257; Kalantzis AK (1998) Private Insurance Law-Cases and Materials, Nomiki Vivliothiki Edn, Athens, 1998.
Rokas I (1995) Introduction to the Law of Private Insurance, 4th edn, Oikonomikon Publications, Athens.
The starting point is that the insurer is only liable for the costs following from the cheapest repair alternative, which states that liability for temporary repairs should be limited to necessary temporary repairs, and that he should not be liable for costs incurred in expediting repairs. However, to protect the assured’s interest in reducing loss of time, some hull conditions state that the insurer will also have a limited liability for added costs due to the choice of a more expensive repair yard, for temporary repairs that are not necessary and for expediting costs (See Norwegian Marine Insurance Plan 1996 § 12-7, §12-8, §12-12.).
In contrast to the rule in Sailing Ship “Blairmore” (1898) AC 593 HL.
Tassel Y (2001) Assurance Maritime: Contrat, Editions du Juris-Classeur 611:11; See Cases Cass Req, 27 Oct 1926: Dor 1927 p 6.; Cass.Com,ll Oct. 1977: DMF 1978, p 328, note Latron; CA Aix-en-Provence, 24 Oct 1929: Dor 1930, p 28.
CA Marseille, 13 Juin 1913: Autran t30, p 78; Tassel Y (2001) Assurance Maritime: Contrat, Editions du Juris-Classeur 611:11.
Cass Req.10 Janv.l939:JCPG 1939,II,1011, Droit maritime; CA Rennes, 21 Juin 1969:D.1970 jurispr. P 296; Tassel Y (2001) Assurance Maritime: Contrat, Editions du Juris-Classeur 611:11.
CA Rabat, 12 Juin 1957: DMF 1958,p.747; T Com Seine,7 Janv.l963:DMF 1963 p 415; Tassel Y (2001) Assurance Maritime: Contrat, Editions du Juris-Classeur 611:11.
Cass. Req, 17 Aout 1859:DP 1859, 1 p.356; CA Rouen, 19 juin 1876:DP 1878,2 p. 205; Cass Req, 14 Aout 1876:DP 1877, p 314; Cass Req 16 Dec 1889: Autran t5, p472; Tassel Y (2001) Assurance Maritime: Contrat, Editions du Juris-Classeur 611:11.
T Com Seine, 7 Janv 1963:DMF 1963 p 425; Tassel Y (2001) Assurance Maritime: Contrat Editions du Juris-Classeur 611:11.
Bradlie v Maryland Ins Co, 7US 378.
The Portmar, Calmar, Steamship Corp v Sydney Scott et al 1954 AMC 558.
Patapsko Ins Co v Southgate, 30US 604 (1831).
O’Leary v Stymest (1865) 11NBR 289 (C.A.).
Braen A (1992) Le Droit Maritime au Québec, W&L.
(1894) 26 NSR 427, at 448-49 (CA).
See Troop v Union Insurance Co (1894) 26 NSR 427, at 448-49, (CA).
Kastor Navigation Co Ltd v AGF MAT (The Kastor Too), [2003] 1 Lloyd’s Rep, 296.
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(2007). Types of losses in marine insurance contracts. In: The Principle of Indemnity in Marine Insurance Contracts. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-49074-6_3
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