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An Investigation into the Warranty of Seaworthiness in Marine Insurance Act 1906 and Suggesting Reforms

LLM Dissertation Marine Insurance Law

Northumbria University, School of Law.

An Investigation into the Warranty of Seaworthiness in

Marine Insurance Act 1906 and Suggesting Reforms

By: Yaqoob Khan

Supervisor: Capt/Dr. Phil Anderson

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Table of ContentsUNDERTAKING.................................................................................................................................................... 4

DEDICATION....................................................................................................................................................... 5

PREFACE............................................................................................................................................................. 6

APPROACH TOWARDS THE DISSERTATION..........................................................................................................................6JUSTIFICATION OF APPROACH.........................................................................................................................................6

CHAPTER 1 INTRODUCTION................................................................................................................................. 7

1 A) AIMS AND OBJECTIVES OF THE DISSERTATION..............................................................................................7

1 B) DEFINITION OF WARRANTY.......................................................................................................................... 7

1 B I) CHARACTERISTICS OF WARRANTIES IN INSURANCE CONTRACT......................................................................................7

1 B II) IS THE MARINE INSURANCE WARRANTY OF SEAWORTHINESS THE SAME AS THE GENERAL WARRANTIES IN CONTRACT?........................................................................................................................................................ 8

CHAPTER 2 THE WARRANTY OF SEAWORTHINESS: DEFINED..............................................................................12

2 A) BRIEF HISTORY OF THE WARRANTY OF THE SEAWORTHINESS.....................................................................12

2B) EXPRESS AND IMPLIED WARRANTY OF SEAWORTHINESS.............................................................................13

2 C) CAN THE WARRANTY OF SEAWORTHINESS BE WAIVED OFF?......................................................................14

2 D) THE MEANING OF SEAWORTHINESS........................................................................................................... 15

2 D I) SEA WORTHINESS IN MARINE INSURANCE ACT 1906 (MIA 1906).............................................................................152 D II) DICTIONARY MEANING OF SEAWORTHINESS...........................................................................................................152 D III) MEANING OF SEAWORTHINESS AS PER COMMON LAW............................................................................................16

a) First category, the rule in Dixon v Sadler (1839)..............................................................................16b) Second category, the Prudent Ship owner Criterion..................................................................................20c) The Comparison between “s39 (4) ordinary peril” and the “prudent ship owner” criteria........................21

CHAPTER 3: THE NATURE SEAWORTHINESS AND THE ROLE PLAYED BY TECHNOLOGY........................................24

3 A) THE NATURE OF SEAWORTHINESS.............................................................................................................. 24

3 B) WHAT DEGREE OF SEAWORTHINESS WILL SUFFICE FOR THE ASSURED TO FULFILL HIS LIABILITIES? AND IF THERE ARE DIFFERENT STANDARDS THAN WHAT IS THE RELATIONSHIP BETWEEN THEM?.................................26

3B I) ABSOLUTE DUTY.................................................................................................................................................263B II) THE CRITERIA OF REASONABLE FITNESS...................................................................................................................273 B III) THE RELATIONSHIP BETWEEN “ABSOLUTE DUTY AND “REASONABLE FITNESS”...............................................................28

3 C) THE EXTENT OF SEAWORTHINESS............................................................................................................... 29

CHAPTER 4: SEAWORTHINESS IN VOYAGE POLICIES...........................................................................................32

4 A) THE MARINE INSURANCE ACT 1906, 39 (1-3) REGULATES THE SEAWORTHINESS IN A VOYAGE POLICY.........32

4 B) SEAWORTHINESS AT THE COMMENCEMENT OF THE VOYAGE.....................................................................33

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4 C) THE RATIONALE BEHIND THE WARRANTY IN VOYAGE POLICIES...................................................................34

4 D) PORTWORTHINESS..................................................................................................................................... 35

4 E) WHAT IF THE VOYAGE IS COMPLETED IN STAGES?......................................................................................37

CHAPTER 5: TIME POLICIES PART 1: SEAWORTHINESS AND TIME POLICIES.........................................................40

5A) TIME POLICY, A BOUNCERBALL FOR THE MARINE INSURANCE WORLD........................................................40

5B) MARINE INSURANCE ACT 1906.................................................................................................................... 40

5D) THE COMMON LAW DEVELOPMENTS W.R.T SEAWORTHINESS IN TIME POLICIES.........................................41

5E) DEFENSE FOR THE SHIP OWNER UNDER S39 (5)...........................................................................................43

5 E I) PRIVITY OF THE ASSURED.....................................................................................................................................435 E II) THE RULE OF ATTRIBUTION.................................................................................................................................51

CHAPTER 6: TIME POLICY PART II: A CRITIQUE...................................................................................................53

6A) CRITICISM AGAINST THE STAR SEA (2001)...................................................................................................53

6B) DR. ANDERSON, P.’S S 39 (5) PRIVITY SOLUTION..........................................................................................55

6C) THE NECESSARY CHANGES TO S 39 (5)......................................................................................................... 57

CONCLUSION.................................................................................................................................................... 58

VOYAGE POLICIES............................................................................................................................................. 58

TIME POLICIES................................................................................................................................................... 58

REFERENCE LIST................................................................................................................................................ 60

BOOKS.....................................................................................................................................................................60STATUTE BOOKS....................................................................................................................................................61ARTICLES................................................................................................................................................................62WEBSITES...............................................................................................................................................................62

FURTHER REFERENCE........................................................................................................................................ 63

BOOKS...................................................................................................................................................................63

CASE LIST.......................................................................................................................................................... 64

UK CASES.................................................................................................................................................................64AUSTRALIAN CASES.....................................................................................................................................................66AMERICAN CASES.......................................................................................................................................................66

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Undertaking The law in this dissertation is up to date till the 11 th

of Feb. I undertake that this is truly my own work, I have

taken ideas from other Authors but I have acknowledged and referenced their work.

Signature. Date.

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Dedication

In the name of Allah, the most Beneficent, the most Merciful.

I dedicate this dissertation to my Uncle, a great person, Haji Akber Khan Nasar for his advice and support.

I dedicate this work to my Parents and family due to whose prayers and constant support I have reached so far.

I would also like to extend the appreciation to my program leader who gave me extension when ever they were needed.

Simone Schnitzer and Emmanuel Guinchard Above all I dedicate this dissertation to Capt/Dr. Phil Anderson

and I am very thankful to him for supervising me during this dissertation.

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PrefaceApproach towards the dissertationMy approach towards the dissertation has been investigative and especially I have firstly

explored the terms that define a seaworthy ship e.g. ordinary, perils etc. I have been very

critical of certain provisions and since the act is a century old one I have largely focussed on its

weak point to make a point for reform.

More than often I have put out a question before the reader, and then answered it later on.

The reason to do this was that the approach for the specific topic becomes clear at the

inception of it, so that my contention is clearly understood

The topic of warranty of seaworthiness is an ancient topic but very conceptual and complex,

and I have done my best to clarify the issues.

Justification of ApproachI have often some times compared two areas of laws as this helps with making good analysis.

Further some times I have used American cases to elucidate certain points. In the case of

Wilburn Boat Co. V Fireman’s Fund Insurance Co. (1955) 348 US 310, it was held by the Federal

Court that the US would follow the House of Lords Approach. Later the US did change its

approach but that is quite lately, and earlier cases can still provide good elucidation.

In Voyage policies I have supported the ship owners since they are under the knife, and I think

the law is far more tilted towards the underwriters to the extend that more than often the

Academia feels that this area of law is unjust and should be reformed.

In time policies I have supported the underwriters as they are really weak in terms of burden of

proving the knowledge of unseaworthiness of the assured. Here there have been scenarios

where the underwriters have suffered injustice, and I have specifically concentrated a bit more

on this area in order to make a good case for reform.

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Chapter 1 Introduction

1 a) Aims and Objectives of the DissertationThe Marine Insurance Act 1906 [Hereinafter mentioned as MIA 1906] is more than a century

old. Over the years technology has contributed a lot to the marine industry so it is a possibility

that the MIA 1906 has got out dated. My dissertation specifically focuses on the warranty of

marine insurance; the most important warranty in the insurance contract. S 39 MIA regulates

this area and this section was drafted more than century before by Sir McKenzie Chalmers. The

aim of the dissertation is firstly clarify the meaning and concept of the term seaworthiness with

respect to the way as envisaged by its Author and at the same time compare see whether the

criteria still holds good and though I have done my level best to be conclusive but explaining

the criteria required a slight descriptive approach. Once the concept is grasped clearly it is

important that the role of the term is observed in voyage policies and time policies. Probably

every old mechanism requires an update and I doubt that the century old law of the MIA still

holds good! Finally I will look into the reforms wherever possible.

1 b) Definition of WarrantyS 33 (1) MIA 1906 defines a warranty as a promissory warranty, where by the assured

undertakes that some particular thing shall or shall not be done, or that some condition shall be

fulfilled, or whereby he affirms or negatives the existence of a particular state of facts. S 33 (2)

states that a warranty can be either express or implied. Subsection (3) states, that a warranty is

a condition that must be strictly complied with, whether it is material to the risk or not. In the

case of any short comings in his obligation by the assured the insurer is automatically

discharged from the liability as from the date of the breach of the warranty subject to the

liabilities incurred before that date.

1 b i) Characteristics of Warranties in Insurance Contract

It has been stated that the common law on insurance originates from the decision of marine

insurance cases. Therefore it is safe to state that the characteristics of the warranties in Marine

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Insurance are similar to that in Insurance Law. Rix LJ in the case of HIH Casualty and General Insurance Ltd. v New Hampshire Insurance Co. (2001) put forward a test

in order to identify whether a particular term in the insurance policy is a warranty stating that,

“It is the question of construction, and the presence or absence of the word

“Warranty” or “warranted” is not conclusive. One test is that whether it is a word

that goes to the root of the transaction; a second, whether it is descriptive of or

bears materially on the risk of the loss; and third, whether damages would be an

unsatisfactory or inadequate remedy.”

Below are stated some of the features that marine warranties have;

A promissory warranty does not have to be material to the risk;

A promissory warranty has to be exactly complied with;

Promissory warranty breach has no defense;

There need not be a causal connection between the breach and loss in the breach of a

promissory warranty;

The insurer is automatically discharged from his liability after a promissory warranty is

breached;

The breach of a promissory warranty may be waived.

1 b ii) Is the Marine Insurance warranty of Seaworthiness the same as

the general warranties in Contract?

To answer the question it is of utmost importance that the concept of warranties generally in

Law of Contract and in Insurance Law be both explained briefly. Further it will make things

more clear if the connection between the Marine Insurance Law and Insurance law be given.

The Concept of Warranty in Contract

The Law of contract divides all the terms that are present in any contract into two categories;

conditions and warranties. Suffice to mention here that Dipplock LJ in Hong Kong Fir

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Shipping Co. Ltd v Kawasaki Kisen Kaisha Ltd (1962) identified a third category of

terms and called them Innominate terms1.

A more vivid explanation of a warranty in the Law of Contract is provided by Denning LJ; as he

was then and later became Lord Denning, in the case of Oscar Chess Ltd v Williams (1957) where he said that,

“I use the word “warranty” in its ordinary English meaning to denote a binding

promise….that is the meaning which it has borne in English Law for three hundred

years from the leading case of Chandelor v Lopus onwards. During the last

hundred years, however, the lawyers have come to use the word “warranty” in

another sense. They use it to denote a subsidiary term in the contract as distinct

from a vital term which they call a “condition”. There is no harm in doing this, do

long as they confine this technical use to a proper sphere, namely to distinguish

between a vital term, the breach of which gives the right to treat the contract as to

an end, and a subsidiary term which does not.”

Warranties thus here are not considered something that cannot entitle the innocent party to

repudiate the contract, but something that will only allow for damages to be claimed. Although

there is a distinction between the warranties and conditions, but in the case of Behn v Burgess (1863) warranties were used in the same sense as conditions that does throw the

law in a fair bit of confusion as far as the distinction is concerned, but the apart from this

authority the general approach of the court has been as stated above.

Soyer (2001, p.3) argues that the meaning of the word warranty has been confused in the Law

of Contract because one party breaches the contract and the innocent party is precluded from

1Briefly stating these “wait and see” [Chen-Wishart (2008, p.506)] terms remedy wholly depends on the intention and conduct of the parties and the surrounding circumstances, where in some cases the courts may give these terms the status of a condition and in others only recognize them as warranties. However in the case of Friends Provident Life and Pensions Ltd v Sirius International Insurance (2005) Walker LJ doubted the status of innominate terms. A condition is a term of the contact that forms the basis of the contract, in other words a condition goes to the root of the contract. If a condition is breached the innocent party is entitled to put the contract at an end and claim damages as well. Technically the contract becomes voidable and can be rectified only if the innocent party waives off the breach expressly or by conduct but still is entitled to damages. A warranty is considered a less important term that does not go to the root of the contract, a subsequent breach entitles the innocent party to claim only damages. [For further research on remedies see, Brownsword: Retrieving Reasons, “Retrieving Rationality? A New Look at the Right to Withdraw for Breach of Contract” (1992) 5 JCL 83].

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repudiating the contract, though the injured party is still allowed to claim damages[my

emphasis].

The Concept of warranty in Insurance Law

Insurance contracts2 are special contracts that depend on the happening of certain events. In

Carter v Boehm (1766) Lord Mansfield; the champion on marine insurance law, held that,

Insurance is a contract upon speculation.

Merkin (1997, p.1) states that the law of insurance have developed significant principles that

are different from the common law principles of contract. In Cehave v Bremer (1976) Roskill LJ stated that the Law of Insurance is a part of the general Law of Contract. Merkin

(1997, p.9) further clarifies it by saying that the Contract of Insurance is a species of a special

class called the contracts of utmost good faith. The Learned Author then states that special

rules apply to non- disclosure and misrepresentation in the Insurance Law, which differ from

the concept given in the general Law of Contract. A warranty in the Insurance Law is a

fundamental term, in other words a condition, breach of which entitles the insurer to treat the

contract as ended. Therefore in the Insurance Law conditions and warranties are often used

interchangeably as per Smith LJ in Bernard v Faber (1893).

Warranties in Contract v Warranties in Insurance Law

Merkin (1997, p.9) states that the concept of warranty in the Insurance Law is a different to

that of Law of Contract and other than the warranties there is no principle that in the Law of

Insurance is at odds with the general Law of Contract. Bennett (2006, p.536) provides a reason

for the different concept as warranties in Insurance Law actually defines the risk that is insured.

In New Castle Fire Insurance Co. v Macmorran & Co. (1815) it was held that

breach of a warranty renders the risk materially different from what the insurer agreed to

cover.

It can be argued here that the reason for the different concept of warranty in Insurance law can

largely be attributed to the fact that here the warranties are used to define the risk insured,

2 Insurance Law is generally considered from two aspects, Marine Insurance Law and Non Marine Insurance Law and the warranties here are considered in the promissory sense as stated in the definition above.

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these definitions are thus construed strictly; which is a resultant of the conservative nature of

the marine industry, so any thing falling out of the gamut of the definition will render the

warranty as breached.

Finally to answer the question that was asked in the beginning it will suffice to say that the two

concepts of warranties are indeed different with the Law of Insurance doing the real justice to

the term warranty.

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Chapter 2 the warranty of Seaworthiness: DefinedThis chapter firstly gives a historical background of the warranty of seaworthiness, and then

defines an express and implied warranty. Finally in the end the chapter analyses rigorously the

meaning of seaworthiness in context of marine insurance, highlighting the two thronged

approach to it i.e. the test of “s 39 (4) ordinary peril”, and the “prudent ship owner criteria”.

2 a) Brief History of the Warranty of the Seaworthiness

The Marine Insurance Law regarding seaworthiness was developed to protect the interest of

the different parties involved in a maritime adventure such as insurer and the shipowner.

(Soyer 2006, pp.48-49) Provisions incorporating seaworthiness clauses appeared in

charterparties and carriage of goods by sea contracts as back as the 5th century.

The laws at the time of the Eleanor Duchess of Guienne; called the laws of Oleron, contained

several clauses for regulating the seaworthiness of a vessel3.

Then there are the Laws of Wisbuy dating as back as the thirteenth century containing similar

provisions as discussed above4. The Maritime code was known as

“Das Hogeste undas oldeste water Rechte Von Wisbuy” (Translated as The ancient

and the supreme water laws of Wisbuy)

Article XXII of the Law of Wisbuy obliged the master and mariners to allow, the merchants to

whom belonged the goods to inspect the cordages which were employed in hoisting the cargo

in and out of the ship. In case the master would fail this duty the ship owner would be liable for

3 It is important to mention here that the word seaworthiness was not specifically mentioned, but when these laws are scrutinized it is discovered that these rules merge into those categories where unseaworthiness has been judicially identified in respect of specific ships with specific deficiencies. These categories are developed as the reason of a courts decisions over a number of years.

4 Wisbuy was a great maritime and commercial port of the North of Europe on the Island of Gothland on the Baltic Sea.

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the damages if the cargo would get lost in a disaster. Similarly article XXV stipulated that the

number of crew must be sufficient for a particular marine adventure.

(As per 30 Fed Cas, 1203) Louis XIV in 1861 set up a comprehensive body of Marine Ordinances

under the famous Minister of Finance; Colbert. Section 12 of the Marine Ordinances of Louis

XIV that formed the foundation of the modern warranty of seaworthiness holds,

“However if merchant prove that the ship when put to sea was unfit for sailing, the

master shall loose his freight, and pay the other damages and losses”

The most significant feature of this was that the merchant had a right of indemnity where he

could prove the vessel being unfit for sailing, independent from any fault of negligence of the

captain of the crew. Therefore till now it can be concluded safely that the roots of the warranty

of seaworthiness lies in 1861 Marine Ordinance of Louis XIV.

The law on marine insurance as far as warranty of seaworthiness is concerned developed over a

continuous period of 2,500 years. It developed as it was a pragmatic need of the shipping and

maritime world and lately the nature of the warranty and its breach has been greatly influenced

by the passing of the Merchant Shipping Act (International Safety Management (ISM CODE)

Code) which enacts the ISM Code into the UK domestic Law. The effect of the dissertation

related matters of the act will be discussed at lengths in the chapter 5 and 6.

2b) Express and Implied Warranty of seaworthiness

Express warranties are those that need be written into a contract of marine insurance and

implied warranty on the other hand as the word states, need not be written but are implied by

virtue of law. The warranty of seaworthiness in voyage policies is implied by virtue of s 39 (1)

MIA 19065 and with respect to time policies the warranty need to be expressly included by the

parties if they wish to do so as per s 39 (5) MIA 1906 with the exception where the ship is sent

to the sea with the privity of the assured. The position of the law, as far as the warranty of

seaworthiness in voyage (chapter 4) and time policies (chapter 5 and 6) are concerned are

5 Marine Insurance Act 1906 (6 Edw 7 C41) Halsbury’s Laws of England. 13


discussed later. Amongst these implied warranties in the Law of Marine Insurance the warranty

of seaworthiness is the most important mentioned by the Parke B in Small v Gibson (1839) [Parson (1856, FN1, p.132)]

2 c) Can the Warranty of Seaworthiness be waived off?

Parson (1859, p.133) argues that seaworthiness is not an omni-potent requirement of the law

and it may be waived off by the parties according to their individual needs and contract but

than that will depend on the construction of the policy.

In Parfitt v Thompsons6 the underwriters had agreed with the owner of the ship to

consider the vessel as seaworthy for the voyage. Before the Court the underwriters admitted

that this agreement prevented them for arguing seaworthiness of the vessel if the loss was a

consequence of the peril of the sea, but on the contrary the policy will become void if the loss

to the vessel results from the unseaworthiness of her own condition. Pollock CB delivering the

opinion of the court said that,

“I cannot assent to the construction of the defendant’s admission of the

unseaworthiness, which has been contented for. It seems to me that admission

ensures for all purposes, and amounts to the dispensation of the usual warranty

of seaworthiness. I cannot think the parties intended, that, if the

unseaworthiness was alone the cause of the loss, the plaintiff should have no

right to recover. It appears to me that if the vessel had foundered in a perfectly

calm sea, from a leak occasioned by rottenness from a day after the policy was

affected, the underwriters would have been liable.”

However the policy must expressly include so if the parties intended to do away with the

warranty of seaworthiness [my emphasis]. The courts will hold the underwriter to have waived

off the warranty of seaworthiness if they have strong evidence as to their support. This is better

illustrated, by Myers v Girard Inc Co. Penn. State 192, where the courts held that the

fact, that, the underwriters knew that the vessel that was destined for a particular trade and

6 13 M & W 39214


this would in itself be a waiver for the warranty of seaworthiness. Though this is an American

case but the English stance is the same. To quote the judge accurately who held that,

“All the authorities establish that a waiver of seaworthiness when not expressed,

in the context of insurance, is only to be inferred upon clear evidence that the

insurers knew that the vessel was unfit to perform the voyage insured, or that a

full presentation was made by the assured of the defects of the vessel before the

completion of the contract.”

To conclude it will suffice to say that to exclude the warranty of seaworthiness the policy the

parties must clearly state to this effect or otherwise the courts will not be too willing to infer an

implied intention of exclusion unless provided with convincing evidence.

2 d) The meaning of seaworthiness

The meaning of seaworthiness is important as it will determine the scope of its application,

especially in the factual situation to which seaworthiness has been applied by the court. Further

it will be more helpful to touch upon the meaning of seaworthiness used in other areas of

maritime law as carriage of goods by sea to see whether the term is used in the same sense or a

different concept underpins that area of law.

2 d i) Sea worthiness in Marine Insurance Act 1906 (MIA 1906)S39 (4) of MIA 1906 lays out that a ship is deemed to be seaworthy if she is reasonably fit to

encounter the ordinary perils of the sea in a maritime adventure.

2 d ii) Dictionary meaning of SeaworthinessBrown Weatherby’s Encyclopedic Dictionary of Marine Insurance (2005, p.638) explains the

meaning of s39 (4) as a ship is seaworthy when she is reasonably fit to encounter the ordinary

peril of the ensured journey. There are many factors that can affect seaworthiness of a ship

what are as follows;

Hull must be strong enough to withstand the adverse effects of the wind and waves.

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The machinery that is responsible for propulsion should be in good order i.e. working

order.

The ship must be equipped with all the lawful safety equipments in a workable manner.

The ship must be loaded with bunkers that are enough for the anticipated journey.

The ship must be manned in terms of a crew that is competent and well qualified.

Further the navigation equipment as radars and other equipments as the radio must all

be in good working order.

Ship must not be over loaded, so that it breaks up in the middle of the sea due to excess

cargo.

The examples are not an exhaustive list of circumstances where seaworthiness of a vessel could

result but some examples highlighted to explain the meaning in lieu of s 39 (4) MIA 1906.

Black Law Dictionary states the meaning of seaworthiness as,

“Ability to withstand ordinary stress of wind, waves and other weather which the

weather might normally be expected to encounter.”

The dictionary meaning is not much different to the meaning discussed above. However for the

courts dictionary meaning of seaworthiness serves only as persuasive authority. As far as the

definition given in the s39 (4) is concerned the definition contains the word “ordinary peril”,

“perils of the seas” which itself are quite a vague words engrossing many situations. Therefore

as far as the interpretation of the s49 (4) is concerned and to understand the meaning fully it is

important to go into the common law to understand the way the courts have viewed

seaworthiness and interpreted these terms.

2 d iii) Meaning of Seaworthiness as per Common Law It has been stated that the warranty of seaworthiness in the 39 (4) MIA 1906 is based on the

decision in Dixon v Sadler (1839). Lord McKenzie, the pioneer of the MIA 1906 as stated

by many authors, has coined the act with regards to the decision of Parke B.

The Common Law on Seaworthiness can be divided into two categories.

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a) First category, the rule in Dixon v Sadler (1839)In Dixon v Sadler (1839) the Vessel; John Cook, was insured with the underwriters

(defendants) by the appellants under a time policy. The vessel reached Sunderland from

Rotterdam, and while passing through a passage it was put on a pillotage on its way to the port

of loading. In the mean while the master and crew, as per the usual practice, discharged part of

the ballast in order to make the vessel ready for the loading the cargo onboard. Unfortunately

due to a sudden squall the vessel became unstable and broke the beams at the ends holding it

and became a total loss. The appellants claimed total loss that the underwriters by claiming

that the ship became unseaworthy due to the negligence of the master and the crew when they

emptied the ballast of the ship. Parke B delivering the judgment of the court held that,

“In the case of an insurance for a certain voyage, it is clearly established that there is an

implied warranty that the vessel shall be seaworthy, by which it is meant that she shall be in a

fit state as to repairs, equipment, and crew, and in all other respects, to encounter the ordinary

perils of the voyage insured, at the time of sailing upon it.”

Parke B thus encapsulate the vital implied warranty of the seaworthiness but the decision of

the court went into the favour of the appellants, the reason being that the ship owner was not

responsible for any subsequent deficiencies caused due to the acts of the master and the crew.

Although the definition provided by Parke B gives a clear cut idea of seaworthiness, but the

words using outlining the criteria of seaworthiness, e.g. ordinary, peril does require a definition

for the sake of better understanding and clarity of seaworthiness [my emphasis].

In the case of Hedley v Pinkey & Sons SS Co. (1894) [hereinafter referred as Hedley v Pinkey (1894)] the Court faced a question whether a ship that started it journey without

loading stanchions and rails was unseaworthy under the s 5 of the Merchant Shipping Act 1876

(39 and 40 Vict. c 80)7. Lord Herschell LC held, by firstly stating section 5;

“the owner of the ship and the master, and every agent charged with loading the

ship, or preparing thereof for the sea, shall use all reasonable means to ensure the

7 This act regulated this area prior to MIA (1906)17


seaworthiness of the ship for the voyage at the time when the voyage commences,

and to keep her in a seaworthy condition for the voyage during the same”

and then His Lordship held that this section imports an implied obligation upon the owner of

the ship to fulfill the duty defined above. Further that if this duty was not fulfilled it will render

the ship unseaworthy.

Seaworthy Ship

Parke B decision was followed in the Steel v State Line SS Co. (1877) [herein after

referred to as Steel v State Line (1877)], where Lord Cain, the Chancellor, with whom all

the other judges concurred, defined a seaworthy ship as one that is in a reasonably fit state to

encounter the perils of the sea that is expected from a ship of that type to encounter, in

crossing the Atlantic; the route under discussion [Lord Chancellor emphasis]. From here we can

make the implication that a seaworthy ship will be assessed against its usual route, and it is

common sense, especially for the people involved in marine trade that the nature of route

differ widely, some routes may have very aggressive weather where as other may have calm

and placid atmosphere. Now for the ship to be involved in trade on a route that is challenging it

has to be reasonably fit for that route unless it faces an extra ordinary weather.

Ordinary Weather

The word ordinary weather was defined in The Gaupen (1926) by Hill J [my emphasis]. This

decision is post MIA 1906, therefore the word ordinary weather that is Hill J was interpreting

was in reference to the s 39 (4). The facts of the case well explained in the judgment of the

Hon’ble J are, that a cargo of ship was loaded on board the vessel, The Gaupen, to be carried to

Grimsby. The sale contract required the cargo to be transported in good condition but the cargo

arrived at Grimsby in a deteriorated state. Pertaining8 to the claim of perils of the sea defense

8 The plaintiff claimed that the vessel was unseaworthy prior to loading, as from previous voyage she was hit by a hurricane resulting in the ship running aground and damaging the coamings of the hatches and the bilges of the holds through which water entered after the cargo was loaded on board when the ship was in service for the plaintiff. Further the plaintiff claimed that the main cause for the influx of the cargo was that the ship was not properly repaired after the hurricane struck. The defendants on the other hand claimed that the perils of the sea were the main cause for the deterioration of the cargo which was a valid defense under the concluded contract. Hill J looked into the log book of the engineers and held that ship at that

18


by the defendants Hill J concluded by saying that “heavy weather of that kind must be expected

in an Iceland winter voyage”. Therefore the characteristics of the voyage and the nature of the

sea will altogether determine whether the weather was ordinary or extra ordinary. Perils of the

sea defense claimed in any case can only succeed after the court has looked into the natural

environment of the sea in which the ship undertook her voyage and held thereafter that the

weather was extraordinary and vice versa.

Ordinary weather was further sorted out in Lloyds Instruments Ltd. v Northern Star Insurance Co. (The Miss Jay Jay) (1985) [hereinafter referred to as Miss Jay Jay (1985)] where the judge in the court of first instance; Mustill J, divided the weather conditions

into three heads,

firstly abnormal bad weather; the weather being one that the assured cannot foresee

even with the aid of modern equipments to an extend,

secondly adverse weather; the weather can be foreseen but not expected, the Judge

himself explained it as “the weather is worse than could be hoped, but not worse than

could be envisaged as a possibility” and,

thirdly favorable weather; the weather can be envisaged but it is not that bad to be

termed as adverse.

Finally He concluded that the vessel is seaworthy if it adequately deals with adverse and

unfavourable weather.

Perils of the Sea

In the case of Elder Dempster & Co. v Paterson Zochonics & Co. (1924) Lord

Sumner held that to claim successfully a breach of the implied warranty of seaworthiness “ two

things must, therefore, be shown; (1) that the ship was unseaworthy in the sense of the word

established by the decisions, and (2) that the damage complained of was caused thereby and

would not have arisen but for the unseaworthiness”. In this case unseaworthiness of the ship

time when seized by a hurricane did encounter an extra ordinary weather but after she was sent off to the sea on the chore for the plaintiff, her damage was not properly repaired due to which she was forced to engulf water by the heavy weather of the Iceland.

19


was claimed due the ship not being suitable as the ones used before, for the specific cargo. In

reality the goods were damaged due to bad stowage by the master. It was held, as per the

formula set out by Lord Sumner that bad stowage did not flow from unseaworthiness of the

ship, it was purely the bad decision of the master. Therefore it is not necessary that the loss

that is attributable to the error of judgment made by the master be attributed unnecessarily to

the perils of the sea, which is always a cause in every incident.

In the case of Neter v Licenses and General Insurance (1944), Tucker J. held that

that,

“It is clearly erroneous to say that because the weather was such as might

reasonably be anticipated there can be no peril of the seas. There must of course

be some element of the fortuitous or unexpected to be found somewhere in the

facts and the circumstances causing the loss, and I think such an element exists

when you find that properly stowed casks, in good condition when loaded, have

become stove in as a result of laboring straining and laboring of a ship in heavy

weather. It is not that weather that is fortuitous; it is the stoving in due weather,

which is something beyond the ordinary wear and tear of the voyage.”

This decision is significant as it proves that perils of the sea is not something that stand alones

in the sea, but even if there are losses due to stowage, the seminal factor in catalyzing that loss

as a matter of fact is the perils of the sea.

Perils of the sea are also defined in Rule 7 of the Rules of Construction of the Policy of the MIA

1906 as perils of the sea only denotes fortuitous events or casualties while the ship is in the sea

and not the ordinary wear and tear of winds and waves.

b) Second category, the Prudent Ship owner Criterion

In the case of McFadden v Blue Star Line (1905) a defective packing of the valve chest

let sea water through in to the area where the plaintiff’s cotton was stowed and damaged it.

Channel J deciding in favour of the plaintiff devised a test for seaworthiness of a ship, holding

that,

20


“In Carver on Carriage of goods by Sea, S 18, where it is said that a vessel must

have that degree of fitness which an ordinary careful and prudent owner would

require his vessel to have at the commencement of her voyage having regard to

all probable circumstance to it. To that extent the shipowner, as we have seen

undertakes absolutely that she is fit, and ignorance is no excuse. If the defect

existed the question to be put is, would a prudent owner have required that it

should be made good before sending his ship to the sea had he known of it? If he

would, the ship was not seaworthy with in the meaning of undertaking.”

This is a carriage of goods by sea case where the courts have used a different criteria than s39

(4) MIA 1906. Here rather than looking at the ship and its features Channel J focuses objectively

on the owner of the ship ands his willful sending of the ship to the sea knowingly that it was

unseaworthy jeopardizing the cargo to damage from sea water in the process. This test thus

depends heavily on whether the owner took steps that a careful prudent owner would have

taken as well.

Lord Erle in the earliest case of Small v Gibson (1853) has held so to same effect holding

that the duty of seaworthiness is fulfilled if the ship is one with a degree of fitness that a

reasonable, careful prudent owner will send to the sea having regards to the surrounding

circumstances pertaining at the moment. Interestingly this is a marine insurance case.

Lately in the carriage of goods by sea the duty of seaworthiness has been altered by the

enforcement of the Hague-Visby Rules. This act was enforced in the United Kingdom by virtue

of the Carriage of Goods by Sea Act 1971. Article III rule 1 (a) of the Hague-Visby rules states

that, the carrier shall exercise due diligence in making the ship seaworthy when voyage

commences. The meaning of due diligence was under investigation in the case of Papera Traders Co. Ltd. v Hyundai Merchant Co. Ltd. (The Eurasian Dream) (2002) where it was held by Creswell J that, “the exercise of due diligence is equivalent to the exercise

of reasonable skill and care…lack of due diligence is negligence…” Thus the due diligence got

equated as the common law duty of care and skill.

21


Here it will be pertinent to mention that the due diligence is a relaxed standard than the

common law duty of prudent ship owner [my emphasis]. The same view is expressed by Boyd,

Burrows and Foxton (1996, p.429) explaining that the standard expressed under due diligence is

that common law standard of reasonable care and skill. The common law duty of skill and care

is not an absolute duty and the statement is further bolstered by Wilson (2007, p.10) who

expresses that the carrier will be no longer be liable in the absence of any fault. Here absolute

means in the sense that the threshold is lowered by the Hague-Visby Rules.

c) The Comparison between “s39 (4) ordinary peril” and the “prudent ship owner” criteria

Clearly there has been two different approach of the common law post the MIA 1906 to the

test of seaworthiness, both approaches running concurrently as evident from the string of cases

that is discussed above. One approach is flowing from Dixon v Sadler (1839) and the other

from Small v Gibson (1853) or perhaps from McFadden v Blue Star (1905).Obviously the case law following Dixon v Sadler (1839) can be called a direct

consequence of the MIA 1906. The question that one can ask here is that why does the law

need two different test for unseaworthiness? A close examination into the case law reveals

rather interestingly that both of the approaches are similar. In the case of Becker, Gray and Co v London Assurance Corporation (1918) it has been held by Sumner J that,

“Again it is important that the same words should mean the same thing when used

in mercantile contract, whether the contract be of one description or another. Perils

of the seas do not mean one thing in a bill of lading and some thing else in a policy;

restraints of princes do not bear a different interpretation in the one or in the other

…”

Soyer (2006, pp.50-51) also states that the marine insurance s39 (4) ordinary peril rule in

essence is the same as prudent ship owner criteria. He argues the case of The Fireman’s Fund Insurance Co. v Western Australia Insurance Co. Ltd and Atlantic Insurance Co. Ltd (1927) where Bates J has held that seaworthiness is that same in

marine policies as well as the carriage of goods contract. Bates J held this after accepting the

argument that was furthered by Mr. Porter; the counsel for the defendants, who in turn

supported his contention by stating the analysis made by Scrutton J in Ingram and Royal 22


Ltd v Services Maritimes Du Tre’port (1923) which goes on as the meaning of

seaworthiness is the same whether in a policy or taken in a contract of carriage.

The emphasis in marine insurance is on the fact that the insurer is primarily concerned,

whether the ship at the commencement of voyage the ship is in a reasonably fit state, which is

an objective view, on the other hand the cargo owner is concerned whether the ship can carry

the cargo, and this exactly is the concern under carriage of goods by sea. On these lines the

approach taken by Bated J seems correct. Soyer (2006, p.51) supports the view point of Bates J

by stating that the same vessel which is unable to encounter the ordinary peril of sea is more

likely to be one that will not be sent by a prudent owner on a journey. The Learned Author

further argues that “the same word should mean the same thing when used in a mercantile

contract, whether that contract is one of description or another.”

Erle J in Gibson v Small (1853) states that

“[Seaworthiness] Expresses a relationship between the state of the ship and the

perils it has to meet in the situation it is in; so that a ship before setting for a voyage

is seaworthy if it is fit in a degree which a prudent owner uninsured would require to

meet the peril of the service it is engaged in, and would continue to during the

voyage unless it met with extra ordinary damage.”

Clearly Erle J argument does correlates the two terms and it will be safe to conclude at this

situation that the two test of s 39 (4) ordinary peril and prudent ship owner are two sides of the

same coin!

23


Chapter 3: The Nature Seaworthiness and the role played by technologyThis chapter discusses the nature of seaworthiness and as far as the categories of

seaworthiness are concerned the courts have identified in details the seaworthiness of a ship

with respect to equipments, hull and machinery, documents etc, which I have excluded from

this chapter as this would make the research unnecessarily descriptive, however annex A

provides a list of these categories (adopted from Soyer, 2005).

This chapter specifically appreciates the technological changes taking place in the marine

industry and their constant inclusion into the latest version of the ships. Therefore the question

that crops up here is that how far is it justified that this new technology be made compulsory

on the shipping operating companies or owners? Obviously the more obligation the more the

underwriters be happy, but on the other side it is important to analyze that ships are not cheap

to come by, and also what about the ships that are already made, and arguing from a practical

point of view, it will be unhealthy for the marine business that one party be made stronger; as

underwriters and the other party be made weaker; as the ship owners. The above posed

question needs be answered in order to maintain the balance in the rights of the two entities.

3 a) the Nature of Seaworthiness

Soyer (2006, p.51-53) states that that the concept of seaworthiness is relative in nature. Further

that the standard of seaworthiness is judged by resorting to the state of knowledge and the

standard prevailing at the material time. The Learned Author states Foley v Tabor (1861) where Erle J. said to the injury whilst giving them direction that, “Seaworthiness is a word which

varies with the place, the voyage, the class of the ship and even the nature of the cargo”.

Similarly in Burgess v Wickham (1863), a vessel was built for river navigation and was

unfit for sea navigation. The owners carried out temporary works on the vessel to bolster up

the defenses of the vessel in order to enable the vessel to sail in sea successfully and withstand

24


the perils thereof. The underwriters in the insurance contract were apprised of the

developments accordingly. To a claim of underwriters against the unseaworthiness of the

vessel, Cockburr J held that the warranty of seaworthiness was satisfied, if the vessel was made

as seaworthy as it could be capable of being made, although the vessel cannot be made as fit as

a vessel that undertakes the sea voyage.

It can be concluded that the ship will be held seaworthy if it is made as seaworthy as is

reasonably practical by ordinary means since seaworthiness is calculated relatively. I9 beg to

disagree with the decision and will give my reasons later in the chapter when I discuss absolute

duty of seaworthiness.

In the Australian Case of Oleo Pty Ltd v Vonguard Insurance Co Ltd (1925) the

theory of relativity of seaworthiness in marine insurance was well highlighted! The brief facts

are that Vessel had to carry cargo from Geraldton to Fermantle, but stopped at an intermediate

port for repairs because she was taking in water too fast than the bilge bumps could expel. The

evidence before the court showed that the vessel was fit for the voyage when it left Geraldton.

In a plea of unseaworthiness brought under the Australian Marine Insurance Act 1906 by the

underwriters, Anderson J. in the Supreme Court of Western Australia held that, though the ship

had a leaking hull it does not necessarily mean that she was unseaworthy, but unseaworthiness

should as a matter of fact be taken relative to the voyage and finally gave decision in favour of

the assured.

Further Soyer (2007, pp.52-53) states that a ship may be seaworthy for a voyage in the

summers but the same ship taking the same route in winter will be unseaworthy e.g. more

bunkering is required by a ship undertaking a North Atlantic voyage in the winter as opposed to

summer largely because in winter the vessel in breaking the ice will exert more pressure on its

engine. Therefore a ship carrying the same fuel in winters as it did in summers will become

unseaworthy.

9 I have tried to get the full text of the case but unfortunately was unable to get one, however based on the information that I have gathered from other books

25


3 b) What Degree of Seaworthiness will suffice for the Assured to fulfill his Liabilities? And if there are different Standards than what is the Relationship between them? Here a careful analysis of the case law reveals that the duty of seaworthiness is absolute and at the

same time fulfilled by the assured when a reasonably suitable ship for the intended purpose is provided.

There is a unique connection between the two and the way the courts have connected the two

standards or in other words degree have been discussed once these standards or degrees are explained.

3b i) Absolute DutyThe duty of seaworthiness is absolute, meaning that the insured will not be liable to pay if the

assured fails to provide a ship that is unseaworthy. This view is better expressed by Lord Eldon

in the case of Douglas v Scougall (1816)10 where he said in his words that,

“it is not necessary to enquire whether the owner acted honestly and fairly in the

transaction, for it is clear law that, however just and honest the intention and

conduct of the owner may be, if he is so mistaken in the fact, and the vessel is in

fact not seaworthy, the underwrite is not liable.”

Similarly in Kopitoff v Wilson (1876) Field J while laying out the absoluteness of the

seaworthiness held that the assured undertakes, “not merely that they should to their best to

make the ship fit, but that the ship should really be fit.”

Here I would like to explain my disagreement with the decision in Burgess v Wickham (1863), which is pre Kopitoff v Wilson (1876). I have to state before giving out my own

reason that may be due to the fact that the underwriters were informed of the temporary

works made to the vessel, led Cockburr J. to conclude the ship as seaworthy, but if the ship

falters to the perils that the sea poses than it is not a seaworthy ship. Temporary defects can

never upgrade the status of the ship. Any ways it is difficult that this case would survive ISM

CODE where the strict DOC (Document of Compliance) requirement and places a high safety

sieve where river boats are most unlikely permissible to be upgraded into sea worthy vessels.

10 4 Dow 26926


Temporary Defects

A very interesting point to note here is that what if the vessel has a temporary defect that could

be cured by the crew and will it render the vessel seaworthy or unseaworthy as per the

absolute duty? It has been argued (Soyer, 2005) that temporary defects to the ship’s structure

or any other equipment considered to be technical leads to unseaworthiness only if the defect

cannot be remedied urgently. Interestingly it has been argued (Soyer, 2005) a temporary defect

that can easily be remedied will not render the ship unseaworthy but will go down as the

negligence of the crew and the loss would be recoverable under the policy. This contention is

supported by the authority in Hedley v Pinkey (1895) where Bates J, as mentioned before

held that the master’s negligence in not having the stanchions and rails fixed did not constitute

unseaworthiness.

However in the case of Dobell v Rosemore (1895) a parthole was insecurely tightened

and the repair was not easy unless the cargo was to be unloaded. The Courts held that the

vessel was unseaworthy.

I think that it depends on the facts of each case, but as the underwriters most of the time gets

away without paying for losses on issues of minor seaworthiness I would agree would Soyer.

3b ii) the criteria of Reasonable FitnessThe case of Rio Tinto Co. Ltd v The Seed Shipping Co. Ltd (1926) [hereinafter

referred to as Rio Tinto (1926)] establishes that the threshold of seaworthiness is not

absolute but the duty is discharged once a reasonably fit ship is provided. In this case a vessel;

Majorie Sea, hit the Troon Rock and grounded becoming completely wrecked and hence

declared as a total constructive loss. The Plaintiff, the cargo owner claimed that the ship was

unseaworthy because the master was not in good health when the ship began her journey. The

defendant on the other hand claimed that the loss was a direct resultant of the perils of the

sea, which was a recognizable defense. Roche J adjudicating the matter held as far as the

seaworthiness of the ship was concerned held that,

27


“the warranty of seaworthiness is an absolute contract, but at the same time,

although it is an absolute contract that the ship in question is reasonably fit for the

voyage, and in such reasonable fitness is included and compromised that she is

equipped with a captain who is competent and in sufficiently good health to

command the ship, it is not the contract that the ship is absolutely fit for the voyage,

either in her self or in the nature of the health of her commander.”

This case is harmonious to McFadden v Blue Star (1905) stated earlier.

In this regards Soyer (2006, p.51) argues that s39 (4) MIA 1906 does not imply that the ship is

new and capable of withstanding any extraordinary situation but that the owner must supply a

ship that is reasonably fit. Further the Learned Author states that the assured never warranted

that the ship is free of suspicion of unseaworthiness but enough if the ship is seaworthy in fact.

Similar echoes can be heard in Steel v State Line (1877) where it was said that it all

comes down to the basic fact as far as the seaworthiness of the ship is in question, that

whether the ship can encounter the ordinary perils in the voyage, and the answer of this

question depends on the situation and the background circumstance where the issue of

seaworthiness is under issue.

In the US case of Moores v Louisville Underwriters the criteria of seaworthiness was held

to be satisfied if the vessel is constructed sufficiently enough as opposed to the best and most

perfect skillful form of construction. In another case The Steel Scientist (1936) Hand Circuit

J has held that,

“A ship must be reasonably fitted for her service, but ordinarily she need not

conform to a high standard than that which prevails among duly accredited masters

of experience…there is no reason why we should hold the ship owners to

refinements of care which go beyond the practical wisdom of the calling.”

3 b iii) The Relationship between “absolute duty and “reasonable fitness” In the President of India v West Coast Steamship Co. [1963] 2 Lloyd’s Rep 278

Kilkenny J explained the connection between the two by stating that absolute means nothing

28


more or less than supplying a ship that can reasonably do the job. Here as per Channel J in

Mcfadden v Blue Star Line the test for assessing seaworthiness is still objective meaning

that the ship will be a seaworthy one if she would be sent to sea by a careful and prudent

owner at the commencement of her voyage having regard to all the external factors. Here the

learned Wilson (2007, p 10) states very shrewdly that though the duty is absolute but the

standard required by the court will be decided in the case at hand, looking into the nature of

the voyage, type of the cargo and the perils that are present in the route decided. Therefore

there is a very conspicuous connection between the duties that is absolute in one hand and not

so absolutely construed on the other hand!

3 c) the Extent of SeaworthinessThe important question that comes to into play after the nature of seaworthiness has been

defined is that how far an owner of a ship should go to make his ship seaworthy. Obviously the

common law has laid down categories where the courts will resort to these categories and

decide if the underwriter is liable to pay or not. The problem with the marine shipping industry

is that new technology providing better safety is always introduced which on the one hand has

made the marine trade and mass movement safer but on the other hand has made the task of

the courts difficult. More than often the courts are faced with claims from the underwriters

that the ship owner have failed to introduce new technology and hence the ship was

unseaworthy, where as the ship owner claims that this technology is fairly new and there are

more ship owners who have not installed it on board as well. For the clarity of the law it is

important that the rules regarding the inclusion of technology into the ship have to be set out.

In the case of Virginia Cardina Chemical Co. v Norfolk SS Co. (no.2) (1912) it was

held that in the case of new scientific shipping enhanced discoveries, it is not mandatory that

the ship not installing these discoveries become automatically unseaworthy. The task may

sound really easy but in practice it is a hard one. There are International Conventions that

regulate the inclusion of technology. The Institute Maritime Organization (IMO), the Safety of

29


Life at Sea (SOLAS) etc are all such organizations that do the task of making the implementation

of technology compulsory time after time when it is practicable. .

Parson (1859, p.134,) argues that the extent of seaworthiness cannot be fixed by positive law.

The reason being as the changes that are created in the navigation by the introduction of new

technology has to be implemented in the form of an international convention, a statute or

through the process of common established usage. Further it is known fact that technology

does not come cheap, but I believe that human life prevention, and for the prevention of

marine life it is not a big deal if the ship owners spent some money!

Different Legal Regimes

However as our world is divided into different countries and different countries have different

legal systems, so UK for instance might have a problem at hand if a certain equipment that has

been said to be compulsory is not installed in a ship that belonged to some other country,

where this equipment was not necessary, especially if the policy is drawn with in UK.

Story J. in the American case of Tidmarsh v Washington Ins. Co. (1827) held that,

“it seems to me that where a policy is underwritten on a foreign vessel, belonging to

a foreign country, the underwriter must have knowledge of the common usage of

trade in such a country as to the equipment of vessels of that class, for the voyage in

which she is destined.” This shows that in America the seaworthiness would be

judged as per the rule in the country of origin rather than in the country where the

contract is concluded.

Soyer (2005, p.53-54) argues that this will make the job for the underwriters burdensome

where they will have to know the seaworthiness legal criteria of all the countries they are

dealing with, not to mention the expense of the litigation. However as a policy argument, it is

safe to conclude that if the ship is found unseaworthy the underwriters will engulf the 30


premium, and will not be liable to pay the loss, therefore the increased work load is justified in

a way. The learned Author concludes that this anomaly will be contrary to s39 (4) where the

section does not talk about any legal regime, and applies to all the underwriters in UK.

However Arnould (1981, para 732, FN 31) on the other hand is highly affirmative of the rule

American Rule in UK and comments that such a scenario has never occurred in UK and admits

that it is up to the courts to decide which course to follow.

31


Chapter 4: Seaworthiness in Voyage PoliciesAfter analyzing rigorously the concept of seaworthiness, it is time to see the role seaworthiness

plays in the voyage policies. Merkin R (2005, p.33)] s25 (1) MIA 1906 defines a voyage policy as

where the subject matter under an insurance contract is insured “at and from” or from one

place to another or further others.

4 a) the Marine Insurance Act 1906, 39 (1-3) Regulates the Seaworthiness in a Voyage PolicyS 39 (1) of MIA 1906 states that,

“In a voyage policy there is an implied warranty that at the commencement of the

voyage the ship is seaworthy for the purpose of particular peril insured.”

Further, s 39 (2) MIA 1906 states that,

“Where the policy attaches while the ship is in port, there is also an implied warranty

that she shall, at the commencement of the risk, be reasonably fit to encounter the

ordinary perils of the port.”

And further s 39 (3) MIA 1906 provides that,

“Where the policy relates to a voyage which is performed in different stages, during

which the ship requires different kinds of or further preparation or equipment, there

is an implied warranty that at the commencement of each stage the ship is

seaworthy I respect of such preparation or equipment for the purposes of that

stage.”

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A very thorough encapsulation of the warranty of seaworthiness is provided by Parke B in Dixon

v Sadler (1839) stating that,

“… If the insurance policy attaches before the voyage commences, it is enough that

the state of the ship be commensurate to the then risk; and if the voyage be such as

to require a different compliment of men, or state of equipment, in different parts of

it, as, if it were a voyage down the canal or river, and thence across the open sea, it

would be enough if the vessel were, at the commencement of each stage of the

navigation, properly manned and equipped for it. But the assured makes no

warranty to the underwriters that the vessel shall continue seaworthy, or that

master or crew shall do their duty during the voyage…”

The MIA 1906 and the associated Common Law divides the voyage into three parts, the

ship shall be seaworthy at the commencement of the voyage, secondly if the warranty

attaches while the ship is still in the port it shall be portworthy and finally if the voyage

is to be covered in stages the ship shall be seaworthy at the commencement of each

voyage. For the sake of clarification and better understanding all of these warranties are

discussed separately under different headings.

4 b) Seaworthiness at the commencement of the voyageFrom the wordings of Lord McKenzie in S39 (1) MIA 1906 it is clear that the doctrine of

seaworthiness is assessed after the voyage has commenced. The dictionary meaning of the

word Commence is sailing therefore in other words the best time for assessing the

seaworthiness of the vessel is when she takes off [my emphasis].

Once the initial journey have been successfully covered by the vessel it will suffice, because

seaworthiness is not a continuing warranty perse, therefore if the vessel develops any new

problem than the underwriter will be liable to payoff. In the case of Berman v Woodbridge (1781) Lord Mansfield held that the assured doesnot warrant that the ship should be

seaworthy through out the voyage. Further in the case of Holdsworth v Wise (1822) a ship

that was seaworthy throughout the voyage started off the voyage at an unseaworthy state but

33


was held unseaworthy because the s 39 (1) MIA 1906 requires the ship to be fit at the

commencement but not throughout the voyage. Therefore it is important from the owner’s

point of view that the ship is seaworthy at the commencement of the voyage.

4 c) the Rationale behind the Warranty in Voyage Policies It will be more interesting if the rationale behind the warranty of voyage policies mandatorily

implied is discussed and further it is at the same time it is highly pragmatic to note that a

problem with regards to unseaworthiness may arise where the ship suffers loss due to an

insured peril, but the underwriter escapes liability because the ship was unseaworthy at the

beginning of the voyage from a different and non proximate cause, which have nothing to do

with the loss of the ship.

Rationale

Sir Mustill Fault and marine losses (1988, p.343-346) explains two rationales for the

development of the fault and void policy of seaworthiness in voyage policies, and He further

exquisitely analyzes them very well [my emphasis]. There are two reasons that the Learned

Author lays out;

Firstly, the rule is disciplinary in nature, where the crew and other workers can be protected

against selfish twisted owners, in a case where they send the ship to sea in an unseaworthy

state and thus put at risk innocent lives. Therefore if the ship is found unseaworthy in the case

where the policy attaches at the commencement even though the assured has no knowledge of

it, the underwriters will swallow the premium without covering any subsequent loss due to the

absolute nature of the seaworthiness warranty (argued in details in the preceding chapters).

However the Law of Marine Insurance has provided adequate safeguards to the crew, and that

as a disciplinary measure the implied warranty of seaworthiness is so capricious that it will be

highly unsuited for acting as a deterrent. Elaborating further Sir Mustill makes a very convincing

argument that at the time when the law was developed the home ports were virtually out of

the reach of the assured, so it was very difficult for him to make sure personally that the ship

34


would break the ground in a seaworthy state, therefore this rationale appears some what

superfluous.

Secondly, the fault and void policy is purely due to the rules of Insurance Law, and it has

nothing to do with the fault or no fault of the assured. The underlying reason being that the

underwriter through his experience can ascertain whether the ship will suffer damage due to

the perils of sea or not, but he can never make sure whether the assured will make the ship

take off in a unseaworthy state. The Learned Author Sir Mustill terms this as an attractive

argument and the one that conforms to the historically developed doctrine of implied

seaworthiness. However He criticises this by saying that the assured is denied cover in suffering

a loss due to the peril of the sea by the mere reason that the ship was unseaworthy at the

commencement of the voyage, though the unseaworthiness at the commencement is not

causative of the loss.

I find my self totally in agreement with Sir Mustill and would endeavour to say that if the loss is

due to an insured peril than the underwriters must be held liable to pay. The Marine Industry is

very conservative in its approach to the Law of Marine Insurance hence change should come

from the Parliament, thus I boldly comment here that it is high time that the subsection be

amended and the principle of causation be included where if the ship suffers from an insured

peril and that is not caused due to the unseaworthiness at the commencement the policy

should not be allowed to be void.

4 d) PortworthinessThe term Portworthiness is the invention of the Learned Author Hodges (1999, pp 302-303)

which basically means that the vessel should be able to withstand the strains of the port. This is

the logical meaning that flows from s 39 (2) and the section only bites impliedly though, if the

policy attaches “at and from” to the vessel.

The common law interpretation is based on the simple literal interpretation of s 39 (3) as

evident in the case of Reed (AE) & Co v Page, Son & East Ltd (1927)Scrutton LJ held

that,

35


“It is enough if, before she sails, she has completed her equipment and repair. But

she must be fit as a ship for the ordinary perils of lying afloat in harbour, waiting to

sail. She must, in my view, be fit as a ship, as distinguished from carrying a

warehouse, at each stage of her contract adventure, which may... commence before

loading. ”

In case a subject matter is insured by a policy that attaches “from” a particular place than the

portworthiness will not be issue, and the policy attaches after the vessel leaves the port and

embarks upon its journey. The Institute Cargo Clauses (ICC) in the Clause 8 (1982 type A, B, C)

states that the policy attaches from the time the goods leave the warehouse or its place of

storage so the implied warranty of portworthiness becomes irrelevant there. However the

Institute Voyage Clauses Hull (IVCH) policy attaches “at and from” while the vessel is in the port,

hence s39 (2) will bite if the voyage is under this policy and vessel found unportworthy.

Soyer (2006, pp. 115-116) states that portworthiness is a relative term and takes an insight into

the relative nature of the term portworthiness, and states that the vessel Portworthiness

depends on many factors, though the Learned Author specifically mentions that the degree of

fitness required for portworthiness is lesser than the degree of fitness required in

seaworthiness [my emphasis]. Firstly, the Learned Author mentions that the class of a ship in

which it is registered determines the portworthiness of a vessel, the common example being a

certain cargo ship may be portworthy in a port whereas a pleasure boat in the same port may

be unseaworthy. Similarly as Soyer (2006, pp.115-116) further mentions that portworthiness

may vary from port to port, a lesser degree of fitness is required of a vessel in a port that is in a

river or a bay, and a relatively high degree of fitness is required in a port in the sea shore where

the tides and the waves poses a strong tidal effect on the vessel. A vessel portworthy in the

summer may become non portworthy in the winters though the port is constant, therefore as

Soyer (2006, pp.115-116) has elucidated by examples, that the question whether a certain

vessel is portworthy is a question of fact, and to add more, portworthiness can only be

determined when a particular vessel that is thought to be unportworthy, is compared to a

portworthy vessel in the same port in the same conditions. Most importantly as in the words of

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Soyer (2006, p.116) “”the wording of s 39 (2) is sufficiently clear to support the assumption that

the vessel need only be portworthy at a specific point in time. Hence it is not a continuing

warranty and once the policy attaches and the vessel is portworthy at that specific time than

the underwriters will be liable if due to any reason it becomes subsequently unportworthy. This

area of law and quite unproblematic and needs less attention largely from the reason that it

seems always well covered in the concluded contracts of the parties!

4 e) What if the Voyage is completed in Stages? It might be the case that a voyage is divided into different stages. More frequently in the

modern times many voyages involve a mixture of land and sea journey. In such a scenario the

questions that come into ones mind are that, whether the seaworthiness of the ship will be

assessed just at the commencement of the voyage albeit the journey is completed into stages?

Whether the ship needs to carry all that she needs right at the commencement of the voyage?

Can the voyage be divided into parts, and before the commencement of each journey can she is

just made ready for that stage only?

S39 (3) gives birth to a doctrine of stages which is explained as follows;

Soyer (2006, p.78) argues that in the case of Bouillon v Lupton (1863) Cockburn CJ firstly

formulated the doctrine of stages. The facts are a bit complex and they go as, three vessels

were insured by the applicant French Company with the defendant, all for voyages from Lyons

to Galatz. The vessels; river steamers, covered their journey in two parts. They started at Lyons

and when they reached the Marseilles they stopped which was at the coast of the

Mediterranean Sea and from there continued their journey, unfortunately all of them sank

while crossing the Black Sea. The boats initially at Lyons were not properly equipped for a

voyage in the sea but were river navigational worthy, and at Marseilles the vessels were made

seaworthy with a proper crew, a master and the required machinery. The defendants argued

that the vessel lacked proper equipment and a crew so was unseaworthy at the

commencement of its voyage, whereas the plaintiff on the other hand claimed that the voyage

37


was supposed to be covered in two parts and before the ship went into the sea it was equipped

with a proper crew and a captain and hence made seaworthy. Cockburn CJ put a question

before the jury for a verdict saying that,

“Whether there had been any unreasonable delay, and in particular, whether under

the circumstances and considering the peculiar nature of the vessels intended as

they were for the navigation, it was unreasonable that they all should wait until the

equipment for sea before they left the mouth of the river. ”

The jury answered by saying that it was reasonable for the vessel to wait for the equipment

before embarking on the journey. From this verdict of the jury a reasonable lawyer can infer

that wherever a voyage involves different journeys its important that before the

commencement of each journey the ship is made seaworthy for that voyage.

MIA 1909 s 39 (3) as given above codifies Bouillon v Lupton (1863) into a statute.

Further in Thin v Richards and Co. (1892) a ship under a charterparty had to carry a

certain cargo from Oran to Garston, with the liberty to call at any port in any order. The ship left

Oran with an insufficient supply of coal, and called at an intervening port; Huelva, but due to

the miss calculation of the engineer loaded insufficient coal, eventually running ashore. To a

claim against the non supply of cargo because the ship was not seaworthy, the charterers

replied that the voyage was covered in stages and hence it was seaworthy when it commenced

the first stage of the voyage. Fry LJ in the Court of Appeal held that the law imposes and

absolute warranty of seaworthiness for the whole voyage contemplated by the parties, and the

ship owner should not be allowed to escape liability by dividing the voyage into stages. Soyer B

(2006, p.78) uses this case to establish that a vessel’s mere stopping at intervening ports does

not necessarily make it into a staged journey.

Therefore every stoppage in a voyage is not a journey by stage and to make this area more

certain, legal scholars having analyzed the decisions in many different cases and have come up

with two categories where a journey by stage can be probable and possible, given as follows;

Physical factors

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Certain voyages as mentioned above contain the carriage of goods via river, sea and roads etc

and hence the single voyage is divided into many stages due to the presence of different

physical factors, as river navigation will require a different vessel than the sea navigation. In

such a scenario it is more recognized as per Bouillon v Lupton (1863) that the voyage be

divided into stages and the vessel made ready for the prospective voyage at each stage.

Stages of coaling and bunkering

Ships need bunkering to be able to carry the cargo to the contracted destination and it is

possible that some times as it is more pragmatic and expedient that the vessel stops at

different ports specifically for the purpose of bunkering, in a voyage that has to be covered by

only a single vessel. In such a scenario the ship will not be unseaworthy if it does not have

enough bunkering for the whole voyage but it will suffice if it has enough fuel to travel from

one stage to another. This approach can be supported by the words of Lord Esher MR in Thin v Richards (1892) quoting Lord Wensleydale in Dixon v Sadler (1839) as,

“If the voyage be such as to require a different complement of men, or state of

equipment, in different part of it, as if it was a voyage down a canal or river, and

thence across to the open sea, it would be enough if the vessel were, at the

commencement of each stage of the navigation, properly manned and equipped for

it.”

This area though is greatly influenced by the commercial exigencies erupting in long voyages.

Bennet (2006, p.575) adds very eloquently that since Bouillon v Lupton (1863); which is evident

from the speech of Collins LJ, that the law lays down emphasis on two things, firstly, that at the

commencement of the voyage a particular equipment was carried rather than carrying every

needed piece of equipment since the start of the journey, and secondly, the test of stopping of a

ship is commercialness rather than reasonableness or necessity.

39


40


Chapter 5: Time Policies Part 1: Seaworthiness and Time Policies

5a) Time Policy, a Bouncerball for the Marine Insurance World[Merkin R (2005, p.33)]S 25 (1) identifies the time policy is formed when a contract is for the

insurance of the subject matter for a definite period of time. The distinction between the

voyage policy and time policy given here would have added more spice into this chapter but I

have avoided it, simply to save extra to be able to wrap a sea in a kettle!

This area of law has generated considerable problems for the insurance providers and the

courts in specific. The primary concern is that in a time policy, the ship can undergo many

voyages, and the Academia wonders whether the imposition of an implied warranty of

seaworthiness has to be in respect of the continued maintenance of the vessel for a whole

calendar year unless she meets an extra-ordinary peril, or just at the commencement of the

voyage, or at the time when the policy attaches where ships are more than often already in the

middle of another voyage [my emphasis]. These all difficulties that have created an uncertain

world of hope; for the insurers who look up to the Academia, and a very safe heaven for ship

owners to get away with big blunders [my emphasis]. The crux of the problem lies in the

proviso of s39 (5) that implied warranty of seaworthiness only applies when the ship is sent to

sea in an unseaworthy state with the privity of the assured. This area has aroused attention

from the courts; where the House of Lords have clarified to a great extend this looming tsunami

especially in regards to the privity of the assured, from the Academia; especially the works of

distinguished Author Dr. Anderson Phil whose model will be analyzed later in the next chapter

and I my self have had a shot at it with my research [idea developed from the arguments of

other Academics who are properly referred] albeit I have not suggested a draft model but have

endeavored to identify the elements that could play a key role in the resolution of the imbroglio

[please see the next chapter].

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5b) Marine Insurance Act 1906The MIA 1906 s (39) (5) states that,

“In a time policy there is no implied warranty that the ship shall be seaworthy at any

stage of the adventure, but where, with the privity of the assured, the ship is sent to

sea in an unseaworthy state, the insurer is not liable for any loss attributable to

unseaworthiness.”

5d) The Common Law Developments w.r.t Seaworthiness in Time PoliciesIt is important to discuss here the meaning of the s 39 (5) and the interpretation given to it by

the courts. Further it will be more interesting to observe the reason of the warranty of

seaworthiness implied in the voyage policies whereas as the same it is not implied in the time

policies.

The seminal case of Gibson v Small (1853) (Parson, 1859, pp.211-213) embodied the

modern law as far as seaworthiness in time policies is concerned. Prior to this case it was

assumed that the warranty of seaworthiness was implied in both time and voyage

charterparties. A brief facts of the case are that, a vessel; Susan, was insured for “Lost or not

lost” for twelve months starting from September 25 1853. The defendants claimed that the

vessel was unseaworthy at the time when the policy attached, on 25 th September when the risk

commenced.

The mood of the Court towards the warranty is well reflected in the words of Parke B who

stated before the House of Lords that,

“We are far from saying that there is no warranty of seaworthiness at all, - or so to

hold would be to let in the mischief which the law provides against by the implied

warranty of seaworthiness in the voyage policies, - or that there is not the same

warranty in the case of a time policy, according to the situation in which the ship

may be at the commencement of the term of the insurance; that is, that the ship is,

or shall be, seaworthy for that voyage, if the ship then be about to sail on a voyage;

42


if in port that she was in a proper condition for such a port; if she be at sea, that she

was sea-worthy when the voyage commenced; in short that the obligation of the

assured is just the same in time policy as if the service in which the vessel was, or

was intended to be engaged, or might be engaged, during the term, was inserted in

the policy. If then, a ship were insured in terms, from a given day for the remainder

of the then voyage to a foreign port back to England, until another given day, there

may be warranty of seaworthiness when the voyage commenced.”

Parke B further stated that if a vessel had been damaged, and it was pragmatic for the owners

to have repaired it prior to the commencement of the risk but they failed to do so, the policy

would not attach, and the main concern of the court was to identify the circumstances where

exactly at the commencement of the risk should the policy attach. Parson (1859, p.148 FN 1)

states that this plea was not adequately met by the Law Lords who deemed it as unnecessary. It

will suffice to state the Law Lords were looking for a single dogma rather than customized

solutions.

Lord Campbell CJ, one of Law Lords11, was strongly against the imposition of any implied

warranty of seaworthiness in time policies. He further argued that for simplicity and clarity in

the commercial transactions the law must be unqualified and exception free, which on one

hand would keep the law uniform and certain; since it will be free of idiosyncrasies and

exceptions, and on the other hand free the court from looking into the perplex issue of whether

at the inception of the policy the ship in the middle of the sea has had to be seaworthy, when

her condition of seaworthiness is unbeknown to the assured i.e. the owner. His Lordship further

explaining said that the owner will be in no situation to remedy the defect. Lord St Leonards

agreed with Lord Campbell as far as not implying the warranty of seaworthiness in the time

policies but proposed an exception to be included that, “if however the ship was to sale on a

particular voyage and a time policy was affected, instead of a policy on the intended voyage… I

11 The decision was adjudicated by nine Law Lords who debated the issue of whether seaworthiness should be implied in time policies, and out of the nine judges, seven were of the opinion that the warranty of seaworthiness should not be implied into time policies whereas two Law Lords held otherwise.

43


think that a condition could be implied that that the ship was seaworthy at the commencement

of the voyage.”

Further to cut a long trial of developments short, in the case of Dudgeon v Pembroke (1877) Lord Penzance in the House of Lords held that,

“… the case of Gibson v Small, supplemented as it was by the two cases of

Thompson v Hopper and Fawcus v Sarsfield, must be considered to have

set at rest the controversies on this subject, and to have finally decided that the new

law does not, in absence of special stipulations in the contract, infer in the case of a

time policy any warranty that the vessel at any particular time shall have been

seaworthy. ”

This finally settled the law in equilibrium of clarity and non haphazardness andIt is not

necessary that the party feels suffocated by S39 (5), they still have their right to contract freely

and can expressly include seaworthiness in time policies if they wish to do so, as in the case of

Martin Maritime Ltd v Provident Capital Indemnity Ltd (1998); The Lydia Flag.

5e) Defense for the ship owner under S39 (5)S 39 (5) MIA 1906 has got only one exception which goes as,

“where with the privity of the assured, the ship is sent to sea in an unseaworthy

state, the insurer is not liable for any loss attributable to unseaworthiness.”

Here the insurer can completely escape his liability to pay for the damages suffered by the

assured, if he can prove that the;

The assured is privy to the that the ship was sent to sea in an unseaworthy state

And the loss occurred was attributable to that unseaworthiness.

5 e i) Privity of the AssuredThe Dictionary Meaning of Privity

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The Oxford dictionary defines the meaning of privy as sharing in knowledge of something (some

thing secret). This doesnot help much as some thing secret can be very difficult to prove!

The Common Law Interpretation of Privity

The meaning of privity has received considerable judicial attention throughout the history of

the Marine Insurance Act. The following are the key cases important for analyzing the concept

of privity of the assured.

1. Compania Maritima San Basilio SA v Oceanus Mutual Underwriting Association

(Bermuda) Ltd, the Eurysthenes (1977); [hereinafter referred to as The Eurysthenes

(1977)].

The relevant facts are that the plaintiff, who was the owners of the Eurysthenes, had insured

their ship with the defendant’s P&I club against Class 1 risks. The ship got stranded whilst on a

voyage from the Us to Philippines while carrying a cargo.

Plaintiff’s case was simple that they asked the P&I Club to pay for the damage that the ship had

sustained and also the loss that was suffered by the cargo owners. Defendants on the other

hand argued that the ship was not seaworthy at the start of the venture as, the ship did not

have, firstly, her full crew i.e. required number of deck officers, secondly, proper charts, thirdly,

a serviceable echo sounder, and finally an operative boiler.

The relevant questions before Donaldson J in the court of first instance that needed to be

answered in order for the dispute to be resolves were that,

incase the defendants prove that the ship was sent in a unseaworthy state by the

privity of the plaintiff s 39 (5), will this suffice as a defence,

To satisfy the requirement of privity do the defendants prove, (i) negligence and/or

(ii) Knowledge of the assured of the unseaworthiness of the ship, and/or (iii) some

deliberate or reckless conduct of the assured in sending the ship to sea in an

unseaworthy state.

The Learned Judge answered the first question as a yes and with respect to the second question 45


held privity given in 39 (5) would be proved if the defendant proves personal knowledge on

part of the assured of the facts constituting unseaworthiness, or if he can prove that the

assured deliberately or recklessly sent the ship to sea in an unseaworthy state. Further any

proof of the assured personal negligence would be totally irrelevant, however, proof of

personal negligence may be helpful in establishing actual personal knowledge on the part of the

assured of the unseaworthiness of the ship.

The Learned J held so after stating that the proviso in s39 (5) required knowledge and

participation from the owner and incase of a company, the knowledge of unseaworthiness by

the alter ego. Donaldson J did stress that knowledge of the unseaworthiness would suffice and

proof of the assured realization of the consequences of unseaworthiness was not necessary. He

further threw light on the meaning of knowledge which he said can be divided into three

categories i.e. actual, shut eye and constructive knowledge. Actual knowledge as per him was

self explanatory, shut eye knowledge he said was best explained by Devlin J in Taylors central Garages (Exeter) Ltd v Roper (1951) as “secondary Knowledge” is proved

when some one deliberately refrains from knowing either because of a lack of interest or

because of no interest at all. Finally constructive knowledge exists when a person ought to have

known if he had made reasonable inquiries but it does not involve deliberate or reckless

refraining from getting informed.

The Plaintiff appealed to the Court of Appeal, where Denning MR, Roskill and Geoffrey Lane LJJ

adjudicated over the case. The Court of Appeal was not satisfied by the proof of privity test

given by Donaldson J, if I may say so and all the judges coined a definition from their own

understanding the of privity so each judgment is discussed accordingly.

Denning LJ in his judgment firstly out lined the stance that each counsel had taken towards the

meaning of privity and these arguments are indeed noteworthy here [my emphasis]. Firstly His

Lordship said that both parties agree that for privity to be established personal knowledge on

part of the owner [NB incase of a company the owner would be the alter ego] of the

unseaworthiness was vital. Mr. Mustill the counsel for the ship owners produced the digest of

Sir McKenzie Chalmers called the “The Digest of Law” which was written five years prior to the

drafting of the MIA 1906 by Sir McKenzie. He argued that in his digest Sir McKenzie Chalmers 46


proposed a concept of seaworthiness in time policies that later became s39 (5) and supported it

by a reference from McArthur‘s The Contract of Marine Insurance (1890, p.18) that said,

“… if the assured knowingly sends the vessel to sea in an unseaworthy state and she

be lost in the consequence there of, the loss will not be recoverable, though the

direct cause of loss be peril insured against, but it was originally caused by the

wrongful act of the assured”

McArthur supported his statement by the decision given in Thompson v Hopper (1856) wherein Lord Campbell CJ held that,

“Here we have a personal misconduct charged upon the plaintiff, which caused the

loss… the assured cannot seek indemnity for a loss produces by their own wrongful

misconduct.”

Here Mr. Mustill linked and equated personal misconduct with the knowledge and willful

misconduct of the assured himself and argued that it was a key element [my emphasis].

Mr. Mustill further backed himself up by saying that the MIA 1906 s39 (5) privity equals

up with s 52 (a) willful misconduct.

Here Mr. Mustill have made a very credible argument and backed up his case, his

meaning of privity was not accepted by the courts but incase the court had accepted, I

think it will have made life difficult for the underwriters. The chief reason being that

willful misconduct on the part of the owner will have been evidentially difficult to

satisfy, mainly because the underwriters are confined with in their offices and to obtain

information out of a shipping company specially if it is a sole ownership against the

owner or the alter ego themselves would have been a near to impossible task and

clearly unjust to the underwriters.

Mr. Lloyd, on the other hand, for the P&I club discussed the cases from 1734 onwards

and argued the meaning of privity to be established if the ship owner was found guilty

of negligence, and with due respect for Mr. Lloyd Denning LJ did not agree with that as

well.

Mr. Lloyd’s arguments of negligence if accepted would have made the job of proving

privity by the underwriter’s way to easy and makes the duty to disprove privity very

47


burdensome. This would have created a rift between a ship owner and the underwriter

which would have certainly obliterated the commercial successfulness of the business

for both.

His lordship, than gave his own historical analysis of the words privity and came to the

conclusion that the terms originate from the Merchant Shipping Act of 1734, where the owners

of the ship were not liable for unseaworthiness in time policy where the loss occurred “without

the privity and knowledge” of the owner. He then stated that the old common lawyer

understood the term that the ship owner knew of the unseaworthiness before hand had

assented to the commencement of the voyage in that state. This ruled out the interpretation of

willful misconduct and to the disappointment of Mr. Mustill ruled out the connection between

39 (5) and 52 (a).

Therefore the true interpretation of the term privity becomes personal knowledge of the

seaworthiness and accent to the occurrence of the event by the assured. Further he elaborated

upon knowledge as not just constituting positive knowledge but the “blind eye knowledge”

which He defined objectively as, a person who suspicious of the truth, but turns a blind eye

towards it, and refrains from holding enquiry then he ought to be regarded as knowing the

truth. The degree of blind eye knowledge was distinguished from negligence by His Lordship, by

stating that it was far more blame worthy than negligence. After stating all of it, His Lordship

gave the deadly blow to the impregnable development of the meaning of the privity by saying

that, if the ship owner satisfies the court that he did know the facts or did not realize that these

facts rendered the ship unseaworthy than he is not privy to the unseaworthiness he is merely

negligent. Regarding this Anderson (2005) argues very convincingly that the law favours the

negligent and penalizes the cautious ship owner.

It is interesting to note that for the underwriter to prove that ship is unseaworthy and that the

owner was privy is an uphill or impossible task, because he is sitting in his office and has very

infinitesimal means of getting evidence which is in the possession of the owner, and the

problem is aggravated immensely in the case of the company where the insurer might have

48


serious difficulty in proving the alter ego, and then proving his or her privity of the

unseaworthiness.

The question that comes up to ones mind is that how easy would it be for an owner to say that

he was never privy? And further in the case of a big company the owner can easily get away by

saying he was negligent and was not privy to the unseaworthiness. How can ever an

underwriter than satisfy the burden of proving privity of the assured. The problem was

identified in STAR SEA by the House of Lords and the anecdote provided will be discussed

therein.

His Lord Lordship then turned his attention to Thomas & Son Shipping Co Ltd v The London and Provincial Marine and General Insurance Co Ltd (1913) where

Bentley LJ has stated that privity of the assured to mean that, “… where the ship owner was

privy to the state of the things which infact rendered the ship unseaworthy, and not where he

formed the opinion that she was unseaworthy”. His Lordship Held that the real interpretation of

the words of Bentley LJ should be taken to be as the shipowner should not be allowed to

recover under the policy when he says not only that “I myself formed the opinion that she was

unfit to be sent to sea” but when the ship owner is also privy to the state of things which show

that the ship was unfit.

Roskill LJ firstly tried to deal with the problem of construing S 39 (5). He relied upon the dicta of

Lord Herschell in Bank of England v Vagiliano Brothers (1891) where He had stated

that,

“I think the proper course in first instance to examine the language of the statute

and to ask what is its natural meaning, uninfluenced by any considerations derived

from the previous state of the law, and not to start inquiring how the law previously

stood, and then assuming that it was probably intended to leave it unaltered, to see

if the words of the enactment will bear an interpretation in conformity with this

view… I am ofcourse, far from asserting that the resort may never be had to the

previous state of law for the purpose of aiding in the construction of the provision of

the code. If, for example, a provision of the doubtful import, such resort will be

49


perfectly legitimate…what, however, I am venturing to insist upon is, that the first

step taken should be to interpret the language of the statute, and that an appeal to

earlier decisions can only be justified on some special grounds. ”

Therefore what He meant was that the MIA 1906, s39 (5) required a fresh interpretation and it

was not ambiguous enough for the courts to resort to the previous case law.

Roskill LJ agreed with Mr. Mustill’s interpretation of privity as “conscious realization of the facts

making the ship seaworthy” and further as far as meaning of knowledge was concerned He

agreed with Denning LJ and held that,

“if the facts amounting to unseaworthiness are there staring the assured in the face

so that he must, had he thought of it, have realized their implication upon the

seaworthiness of the ship, he cannot escape from being privy to that

unseaworthiness by blindly or blandly ignoring those facts or by refraining from

asking relevant questions regarding them in the hope that by his lack of inquiry he

will not know for certain that which inquiry must have been made plain beyond

possibility of doubt.”

Geoffrey Lane LJ explained the concept of privity by saying that if a ship owner questions

himself that a reasonably prudent owner would send a ship with a crew of 12 to sea, so he

would send a crew of 12 as well; in that case the ship owner is not privy to the unseaworthiness

even though an arbitrator would hold that a crew of 14 should be send, which would make the

owner negligent but not privy to the unseaworthiness. But if the owner knows that a

reasonably prudent owner will send the ship with a crew of 12 but he sends the ship into the

sea with a crew of 10, then the owner will be privy to the unseaworthiness. This doesnot throw

much light on the evidential requirement of proving privity of the assured.

2. The House of Lords Approach in the Manifest Shipping Co. Ltd. V Uni- Polaris

Insurance Co. Ltd. La Reunion Europeen, TheStar Sea (2001)

The material facts of the case are that the vessel called the star sea was arrested in Zeebrugge

and faced cargo claims. At the port of arrest the ship was inspected by Belgian port authority

that identified that the emergency pump system was not working and advised the master to

50


rectify it. The chief engineer in a failed attempt on repairing the default negligently cut the

suction pipe passing through the forepeak ballast tank to a non-return valve in the ship’s side.

Later the emergency fire pump was repaired but the suction pipe was never repaired.

Later in May 27, 1990 the star sea sailed from Corinto for Zeebrugge of banana, mangoes and

coffee, and while approaching the Panama Canal, a fire started in the engine room that spread

to all other parts and finally consumed the whole ship making it a total constructive loss. The

trial J; Tuckey J, did accept that the ship was unseaworthy in two respects, the first being that

the CO2 emission system was defective and all the four tanks containing CO2 could not be

emptied at once to extinguish the fire and the effect of the CO2 was further weakened by the

fact that the doors needed to seal the engine room were defective as well. The second respect

was that the master did not know how to operate the CO2 system.

The plaintiff claimed insurance cover as per the insurance contract. The defendant put forward

a number of pleas before the court and for our purpose; the relevant one is that the ship was

sent to sea in an unseaworthy state with the privity of the assured, in the sense that the

assured had blind eye knowledge of the unseaworthiness of the vessel. FULL DEFENCE CASE

Tuckey J held that the owners were privy to the unseaworthiness and held that the

underwriters were not liable, whereas the Court of Appeal reversed this decision and the Court

of Appeal decision was upheld by the House of Lords.

Lord Hobhouse of Woodborough firstly outlined the defense under 39 (5) that firstly, the vessel

must be unseaworthy at the time the vessel was sent to sea, secondly, the unseaworthiness

must have been causative of the relevant loss and thirdly, the assured must have been privy to

sending the ship to sea in that condition [my emphasis]. He further accepted the “blind eye

knowledge” test put forward by the Court of Appeal in the Eurysthenes (1977) but held that

there the test was perceived to be objective, but in fact it should be a subjective test, and the

question that should be asked is, “did the assured have direct knowledge of the

unseaworthiness or an actual state of mind which the treats as equivalent to such knowledge?”

He then referred and approved of what Branson J said in the case of Gloria (1935) that,

“I think if it were shown that an owner had reasons to believe that his ship was infact

51


seaworthy, and deliberately refrained from an examination which would have turned his belief

into knowledge, he might properly be held privy to the unseaworthiness of his ship. But the

mere omission to take precautions against the possibility of the ship being unseaworthy cannot,

I think, make the owner privy to any unseaworthiness which such precautions might have

disclosed. ”

Lord Scott of Foscote expressed his reservations with the test proposed by Roskill LJ in the

Eurysthenes (1977); given above, and said that he has used the words “had he thought of it”

that shows that if the assured never thinks of the unseaworthiness, than it is not possible that

he would have realized the implications of the unseaworthiness. He preferred the test given by

Geoffrey Lane LJ which is discussed above and held that it was same as the test that was

proposed by Branson J in The Gloria (1935). He then held the proper test for “blind eye

knowledge” should be that the firstly the owner should have reasons to believe that the ship

was unseaworthy, and he then deliberately refrained from an inquiry which would have turned

his belief into knowledge. However, the mere omissions to take certain precautions against

unseaworthiness of the ship should not make the owner privy to unseaworthiness. He then

further agreeing with Lord Hobhouse held that suspicion or realization had to both of the

aspects and not just one the relevant aspects, as the owner should have suspected the relevant

unseaworthiness and then made a conscious decision of not inquiring into the matter.

Therefore Tuckey J; in the court of first instance, missed out on the requirement of making a

deliberate inquiry by the owner which is vital for the establishment of “blind eye knowledge”.

Further he held that suspicious mind is a particular state of mind which one extreme is a vague

feeling of unease and on the other extreme shows a very firm belief in the existence of certain

relevant facts. For “blind eye knowledge” to be present the word suspicion should mean the

existence of specific facts i.e. the later of the two meanings given above. He held otherwise, if

suspicion of untargeted facts be sufficed as proof of “blind eye knowledge” than negligence or

gross negligence would be enough to prove privity.

Lord Clyde, Lord Steyn and Lord Hoffman agreed that made this a unanimous decision and

settled the meaning of privity.

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5 e ii) The Rule of AttributionThomas R ed. (Hodges, 2002, p217)) states that the Sir Mackenzie has not used the word

“proximately caused” in s39 (5) rather used the word “attributable” and the word attributable

has far wider scope than the word proximately caused. The word proximately caused has a well

defined and technical meaning whereas the word attributable is a blunt word that might be

taken by an ordinary person to mean caused by. In the case of George Cohen, Sons and Co v

Standard Marine Insurance Co (1925) it was held by Roche J that if the assured is privy to the

matter of unseaworthiness, is a cause or part of the cause for the underwriters to avoid the

policy. Therefore the Learned Author Hodges S comments that the English Law has carefully

chosen a less specific criterion for the privity rule as compared to the law of proximate cause,

therefore the balance the ship in favour of the underwriters who will be exempted from paying

once the seaworthiness becomes a cause.

I believe there are still problems in applying the “blind eye knowledge test” and the criticisms

and changes are discussed in the next chapter.

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Chapter 6: Time Policy Part II: a CritiqueThe House of Lords definition of the “blind eye knowledge” in the Star Sea (2001) clarified the

interpretation of the s39 (5) of the time policy in the MIA 1906. However there are some

criticisms that arises once the decision is read in details and without discussing them it will be a

bit difficult to discuss the changes that I endeavour to identify some changes [ofcourse based

on the studies of the distinguished authors which are referred properly] and above all not to

forget to state the works of the distinguished Author Dr Anderson, P. largely based on the

incorporation of the ISM CODE in English Law.

6a) Criticism against the Star Sea (2001) There are certain facts that still make the academia wonder that could have maneuvered easily

the decision in favour of the underwriters [my emphasis].

Firstly Lord Hobhouse of Woodborough himself stated in his judgment that fact that prior to

the Star Sea becoming a wreck due to engulfment by the fire, the assured had two other vessels

that were part of the Kollakis Fleet and that had suffered the same fate.

The first vessel called the Centaurus was in the port of Wilmington; Delaware, in February 1989

when a fire erupted in the engine room. The vessel had a CO2 fire extinguishing system, but the

Korean crew did not use it because they held the extraordinary belief that the use of CO2 would

affect the engine but by the time they used it the engine room could not have been sealed

properly. The fire brigade was called but only after 15 hours when the vessel was rendered a

total constructive loss.

The second vessel called the Kastora just two months later, in April 1989 was intruded by fire in

the engine room and the Korean crew (Perhaps this time it was a different crew but Korean!)

while she was in the Caribbean Sea. The crew did use the CO2 pump after half an hour of the

engine room catching fire, but the CO2 was not effective because the funnel dampers were not

closed whose job was to stop the influx of oxygen to cramp the fire. A report of the surveyor

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said that the funnel dampers did not close because of its poor condition that failed to seal the

ventilator trunking. The fire washed vessel again rendering it a total constructive loss.

The same incident occurred with the Star Sea in just after nine months of the two incidents.

This was the facts that the lawyer for the underwriters had argued before the court, and Tuckey

J kept this in his mind while giving the judgment for the underwriters holding the owners privy

for the unseaworthiness of the ship this time. Lord Hobhouse did discuss this issue but then he

held that the owner had employed a Cyprus crew this time and the master was more

experienced. I notice that this shows that the owners had started to take interest in the affairs

of the Star sea and this shows of a high probability that the owners were aware of the day to

day affairs of the ship, and similarly to the survey that was conducted by Belgian Port

Authorities, basically proving that the owners were aware of the unseaworthiness of the vessel

and hence privity proved! However Lord Hobhouse held otherwise saying that the owners have

brought changes and the managers of the fleet were negligent in the sense that they never

inquired if the captain knew how to use the CO2 pump.

Thomas R ed. (Hodges S (2002, pp215-216)) argues that the House of Lords have erred when

they accepted a subjective test, rather than an objective test. The test for the “blind eye

knowledge” should have been, “whether the suspicion of the assured ought to have been,

aroused rather than when his suspicion has infact aroused.” The Learned Author argues that if

the suspicion of the prudent owner would have been aroused, let say in a particular situation

than it is for the assured to prove otherwise. Therefore the test should have been an objective

one. Further the Author states the approval of Lord Scott of the distinction drawn by Lord

Blackburn in Jones v Gordon (1877) between a person who was “honestly blundering and

careless” and another person who “refrained from asking questions, not because he was an

honest blunderer or a stupid man, but because he thought in his own secret mind- I suspect

there is something wrong, and if I ask questions and make further inquiry, it will not longer be

my suspecting it, but my knowing it, and then I shall not be able to recover, ” and then asks a

question, that how can a person ascertain the secret mind of the shipowner? She answers by

saying that only the charisma of an objective test can determine the plausible and reasonable

55


state of mind of the owners. I think this is a totally pertinent argument as the most important

thing is that prove of the state of mind here, and the courts must ensure that fair play is

endured amongst the ship owner the underwriters. Otherwise the underwriters would indulge

into a psycho analysis of the ship owners to prove whether they are being honest or are simply

lying!

The Learned Author than discusses the Nelson analogy used by Lord Scott where He held that

Nelson in the Battle of Copenhagen deliberately placed the telescope to his blind eye so that he

could avoid seeing what he would have seen if he had placed the telescope to his good eye. The

Author here makes a point stating that the better course for Nelson would have been to be lazy

or do nothing rather than placing the telescope to the blind eye and that would have sufficed.

In this regard Lord Scott himself expressed that if the owner “did not enquire because he was

too lazy or he was grossly negligent or he believed that there was nothing wrong than privity

has been made out.” Therefore as per the Author states that the result of the application of the

subjective test would be to punish the attentive and vigilant, and reward the sleazy, lazy and

the uncaring ship owner.

6b) Dr. Anderson, P.’s s 39 (5) Privity Solution However the Star Sea being a refrigerated cargo vessel did not come under the axe of Chapter

IX of SOLAS (the ISM CODE applied from 1st July 2002) that requires the vessel to have the

appropriate Document of Compliance to the ISM CODE and the Safety Management Code of

the company; in other words it is compulsory on the company to train their crew in the usage

of the safety systems on board. The post ISM CODE analysis is well made by Dr. Anderson P as

stated earlier.

For the test of Privity that has been explained by Dr Anderson P it is important to give a very

brief out line of the ISM CODE. The ISM CODE it self is quite detailed but it will be helpful to

state the relevant area that is relevant to the topic of this dissertation.

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The ISM CODE is generally divided into 13 Sections where most of the stress is on the safety

management system and that the relevant documents of safety have been complied with the

company. Section 4 is of particular interest that states that,

“To ensure the safe operation of each ship and to provide a link between the Company and

those on board, every company, as appropriate, should designate a person or persons ashore

having direct access to the highest level of the management. The responsibility and authority of

the designated person or persons should include monitoring the safety and pollution-prevention

aspects of the operation of each ship and ensuring that adequate resources and shore-based

support are applied, as required. ”

Here lies the solution of the Privity, and lets apply this to the problem of The Star Sea (2001)

where Anderson P (2005, p.247-250) eloquently states in this regards that court would have

little difficulty in determining the “blind eye knowledge” when they have the designated person

before them. The DP is responsible for the safe operation, and then he has to make sure that

the management of the ship knows of any shortcomings or the overall running of the ships and

should have access to the highest level of management [my emphasis]. Here as per the

distinguished Author, that the courts need to get hold of the DP and inquire about the default

in the CO2 pump, and if, as per the ISM CODE, he should have told the owners or the later ego

about the fault and immediately they would have known that the ship is unseaworthy. Of

course this all is not that simple but here atleast the owners cannot claim complete negligence

to the unseaworthiness. Obviously the underwriters should be shrewd enough to involve in

their contract this problem, and should be able to argue successfully by the policy being void if

the DP has erred in his duties.

Here another big issue of who the assured is solved, that in it self is not an issue but does

lengthen the course of the trial and makes the issues more complex unnecessarily. In The Star Sea (2001) Lord Hobhouse of Woodborough identified the owners for the purpose of privity,

the person with the directing mind. He said that Tuckey J identified Mr. Stefanos as the assured,

whereas the Court of Appeal held Mr. Nicholaidas to be the assured, the reason being that

Captain Stefanos role was subordinate to Mr. Nicholaidas. His Lordship held that both of them

57


were assured for the purpose of s39 (5). However this does bring a bit uncertainty as to who

should be really the assured. The DP solves this problem as well, since he has access to the

management, so the court can simply ask him to tell who is the directing mind or the alter ego.

Soyer (2006, p.220) states that the affects of ISM CODE can only be concluded after it has been

interpreted by the courts, but I beg to differ by stating that the wordings of ISM CODE is pretty

clear and the Learned Author Anderson has what I would call a realistic approach.

The virtues of ISM CODE are even more, and the work of Dr Anderson, P. is quite detailed but I

have a word limit to observe and I hope that I have coined his view point well in my succinct

abstract.

6c) the necessary changes to s 39 (5) Time of assessing unseaworthiness

(From Parson, 1859, p.147) I think the exact time of seaworthiness should be assessed is at the

time when the time policy attaches and if that time the ship is already in a voyage then

seaworthiness should be assessed at the commencement of the subsequent voyage and the

insurer should be discharged if the ship commences its journey with the privity of the assured,

but if the loss is unconnected with the unseaworthiness than the insurers should be made

liable.

Objective test rather than subjective test

Thomas (2006, p.215) states the view of Susan Hodges, who argues that the test of “blind eye

knowledge” should be that, whether the suspicion of the prudent assured ought to have been

aroused. This will allow the underwriters to discharge the burden by just claiming privity, and

then would require from the assured to prove that, why were his suspicion not aroused in the

circumstance under issue. Therefore agreeing with Susan Hodges, I would propose that the Star

Sea (2001) subjective test of the “blind eye knowledge” should be replaced by the objective test

of the Roskill LJ in the Eurysthenes (1977). However this is up to the House of Lords to consider

it when the issue comes up in the future!

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59


ConclusionFinally I would conclude by holding that the MIA 1906 is more than a century old and it needs

an update version like any other act especially when in the last quarter of the hundred years

mankind have excelled high in technology. The business in today times is vaster and further

expanding. There are certain areas pertaining to my dissertation that need utmost attention of

the parliament. For example the different legal regimes discussed in the third chapter are areas

where the courts will have to decide complex issues that will involve making new principles.

The latent reason, in my opinion, for the act to have survived too long is because the courts

have been updating the specific provision with the changing time, by applying their wisdom

through interpretation, but in the highlighted areas of voyage policies and time policies

parliament should introduce some reforms.

Below are some of the reforms that are suggested.

Voyage policiesThe unfortunate consequence of the policy becoming rubbish if the ship commences its journey

in an unseaworthy state is a rule that needs another look. Perhaps the rule could be made more

fair by changing s 39 (1) altogether and inserting provisions that holds the policy good until the

unseaworthiness at commencement was causative of the loss of the vessel, or any subsequent

damage. A pecuniary fine could be imposed on the ship owner in favour of the underwriters

where the ship commenced journey in an unseaworthy state. To emphasize my point the

underwriters will be liable even if the ship was unseaworthy at the commencement of the

voyage but a different cause led to damage to the vessel while at sea.

Time PoliciesAs per the test laid down in Thomas v Tyne and Wear Steamships Freight Insurance Association (1917) it was held that the word such should be inserted before

Unseaworthiness in the 39 (5) in the phrase, the insurer is not liable to the any loss attributable

60


to unseaworthiness [my emphasis]. The simple reason being that there might be other causes

to unseaworthiness but the assured will be penalized only in respect of causes he is privy.

Therefore though insignificant the parliament should add this word into the s 39 (5).

Soyer (2006, p.219-221) advocates for the reforming of s39 (5). The proviso of privity of the

assured is in reality a tough burden that is difficult to satisfy evidentially. An implied warranty of

seaworthiness could be imposed in time policies and the Learned Author here mentions the

suggestions of William Gow [for further reading on this topic please read Sea Insurance (by W

Gow)] who states that the provision should be changed to,

“A time policy shall be subject to the same warranty of seaworthiness as if the vessel

were insured for different voyages”

Here whence the vessel has completed the first voyage in a seaworthy the policy will extinguish

and for the proceeding voyage the policy will apply again in the same respect. In case the vessel

is sea worthy and suffers damage so the underwriters will cover, and if the vessel kicks off in an

unseaworthy state, and that unseaworthiness results in damage to the loss, the underwriters

will not be liable to pay. This will increase the workload for the underwriters but atleast bring

certainty to the law.

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Reference ListBooks

Anderson. P, (2005) LLOYD’S PRACTICE SHIPPING GUIDES ISM CODE: A PRACTICAL GUIDE

TO THE LEGAL AND INSURANCE IMPLICATIONS Second Edition, Informa Professional 37-

14 Mortimer Street, London W1T 3JH.

Beale, H., Bishop, W and Furmston, M (2008) Contract Cases and Material Fifth Edition,

Oxford University Press, Great Clarendon Street, Oxford OX2 6DP

Boyd, S. Burrows, A. and Foxton, D. (1996) SCRUTTON ON CHARTERPARTIES, Twentieth

Edition, Sweet and Maxwell London.

Chen-Wishart, M. (2008) CONTRACT LAW Second Edition, Oxford University Press, Great

Clarendon Street, Oxford OX2 6DP

Bennett, H. (2006) The Law of Marine Insurance Second Edition, Oxford University Press

Girvin, S. (2007) CARRIAGE OF GOODS BY SEA Oxford University Press, Great Clarendon

Street, Oxford OX2 6DP

Hill, C. (2003) LLOYD’S PRACTICE SHIPPING GUIDES MARITIME LAW Sixth Edition,

Informa Professional, 37-14 Mortimer Street, London W1T 3JH

Him, S. (1983) THE QUEST FOR SEAWORTHINESS PhD thesis, University of Wales,

Institute of Science and Technology.

Hodges, S. (2004) Cases and Materials on Marine Insurance Law Reprinted Cavendish

Publications Ltd. The Glass House, Wharton Street London, WC1X 9PX, UK

McArthur (1890) The Contract of Marine Insurance Second Ed.

Merkin, R. (Ed.) (1997) COLINVAUX’S LAW OF INSURANCE Seventh Edition, Sweet and

Maxwell Ltd, 100 Avenue Road London, NW3 3PF.

Noussa, K. (2004) THE ‘PRINCIPLE OF INDEMNITY’ IN MARINE INSURANCE CONTRACT: A

COMPARATIVE STUDY PhD Thesis, University of Southampton.

O’May, D. (1993) MARINE INSURANCE, LAW AND POLICY Editor: Hill, J., Sweet and

Maxwell London.

62


Parson, T. (1859) PARSON’S A Treatise on Maritime Law First Edition, Vol II Pub: The Law

Book Exchange Ltd New Jersey 2004.

Poole, J. (2005) Casebook on Contract Law Seventh Edition, Oxford University Press,

Great Clarendon Street, Oxford OX2 6DP.

Rose, F. (2004) MARINE INSURANCE, LAW AND PRACTICE Informa Professional

Schoenbaum, T. (1999) KEY DIVERGENCIES BETWEEN ENGLISH AND AMERICAN LAW OF

MARINE INSURANCE. A COMPARATIVE STUDY 1999” First Edition, Cornel Maritime Press

Centreville, Maryland.

Soyer, B. (2006) Warranties in Marine Insurance Second Edition, Cavendish Publishing

Press.

Strathy, R. and Moore, C. (2003) Law and Practice of Marine Insurance in Canada

LexisNexis Canada Inc.

Tetley, W. (2002) INTERNATIONAL MARITIME AND ADMIRALTY LAW International

shipping Publication.

Thomas, R. (2006) MARINE INSURANCE: THE LAW IN TRANSITION Informa Professional,

Informa House 30-32 Mortimer Street London. WC1N 7RE Great Britain.

Thomas, R. (Ed) (2002)THE MODERN LAW OF MARINE INSURANCE Vol II Informa

Professional, Informa House 30-32 Mortimer Street London. WC1N 7RE Great Britain.

Wilson, F. (2007) CARRIAGE OF GOODS BY SEA Sixth Edition. Pearson Education Ltd,

Edinburgh Gate, Harlow Essex, CM20 2JE, England.

STATUTE BOOKS Brown, H. (2005) WEATHERBY’S ENCYCLOPAEDIC DICTIONARY OF MARINE INSURANCE

incorporating DICTIONARY OF MARINE INSURANCE TERMS AND CLAUSES Sixth Edition,

Witherby’s Publishing, London, Witherby & Co. Ltd. 32-36 Aylesbury Street, London,

EC1R 0ET.

Merkin, R. (2005) MARINE INSURANCE LEGISLATION Third Ed., Informa Professional

Informa House, 30-32 Mortimer Street London, W1W 7RE

63


Gould, B.(Ed.) (2007) Halsbury Laws of England Lexis Nexis Butterworth, Reed Elsevier

UK Ltd

ARTICLES Hare, J. (1999) The Omni Potent Warranty, England v The World Nov University of Cape

Town published in MARINE INSURANCE AT THE TURN OF THE MILLENIUM Vol 11 Editor:

Huy Brechts M, THE EUROPEAN INSTITUTE OF MARITIME AND TRANSPORT LAW

Sir Mustil, M (1988) Fault and Marine Losses LMCLQ 310

WEBSITES www.Lexisnexis.com

www.westlaw.com

64

http://www.westlaw.com/

http://www.Lexisnexis.com/


Further ReferenceBOOKS

Ambrose, C. and Maxwell, K. (2002) LONDON MARITIME ARBITRATION Second Edition,

Informa Professional, 37-14 Mortimer Street, London W1T 3JH, UK.

Bashford. A (A Master Mariner) (1989) MARINE LIABILTIES, Guidelines to Exposure and

Insurance of Port Authorities and other port related Industries or Activities First Edition

Witherby’s and Co. Ltd 32-36 Ayles Bury Street London. EC1R 0ET.

Jackson, D. (2005) ENFORCEMENT OF MARITIME CLAIMS Fourth Edition. Informa

Professional UK.

Legh-Jones, N. (Ed.) (2003) McGillivray on Insurance Law Tenth Edition. London Sweet

and Maxwell. 100 Avenue Road, Swiss Cottage, London. MW3 3PF.

Li, K. and Ingram, C. (2002) MARITIME LAW AND POILICY IN CHINA Cavendish

Publication Ltd., The Glass House, Wharton Street, London, WC1X 9PX, UK

Michael, K. (2004) War, Terror and Carriage by Sea Informa Professional, UK

Pamborides, P. (1999) International Shipping law Legislation and Enforcement Ant N

Sakkoulas Publishers, 69, Solomon Street, 106 79 Athens, Greece.

Turner, H. (1986) THE PRINCIPLES OF MARINE INSURANCE Seventh Edition, Stone and

Cox (Publications) Ltd, 44 FLEET STREET, LONDON

65


Case ListUK Cases

Amstelsot [1963] 2 Lloyd’s Rep 22

Annen v Woodman (1810) 3 Taunt 299 ; Vol 128 ER 119

Aktieselskabat de Danske Sukker Fabrikker v Bajamar Compania Naveira SA (The

Torenia) [1983] 2 Lloyd’s Rep 210

Bank of England v Vagiliano Brothers [1891] AC 107

Behn v Burgess (1863) 3 B & S 751

Bouillon v Lupton (1863) 33 LJ PC 37

Burgess v Wickham (1863) 3 B & S 669

Carter v Boehm (1766) 3 Burr. 1905

Cehave v Bremer [1976] Q.B. 44

Chandelor v Lopus

Compania Maritima San Basilio SA v Oceanus Mutual Underwriting Association

(Bermuda) Ltd, the Eurysthenes [1977] 1 QBD 49

Compania Naviera Vascongada v British and Foreign Marine Insurance Co Ltd (The

Gloria) (1936) 54 L1 L Rep 35

Dixon v Sadler (1839) 5 M & W. 414

Dobell v Rosemore (1895) 2 QB 408

Douglas v Scougall (1816) 4 Dow 269

Dudgeon v Pembroke (1877) 2 App Cas 284

Fawcus v Starsfield (1856) 6 E & B 192

Friends Provident Life Pensions Ltd. v Sirius International Insurance [1995] EWCA Civ

601, CA

Foley v Tabor (1861) 2 F & F 663

Haughton v Empire Marine Insurance Co [1866] LR 1 Ex 206

HIH Casualty and General Insurance Ltd. v New Hampshire Insurance Co. [2001] 2

Lloyd’s Rep 16166


Hong Kong Fir Shopping Co. v Kawasaki Kisen Kaisha Ltd. [1962] 2 QR 26

Jones v Gordon (1877) 2 APP Cas 615

Kopitoff v Wilson (1876) 1 QBD 377

Lloyds Instruments Ltd. V Northern Star Insurance Co. (The Miss Jay Jay) [1985] 1 Lloyd’s

Rep 264

Manifest Shipping Co. Ltd. v Uni-Polaris Insurance Co. Ltd. and La Re’union Europeen ,

The Star Sea [2001] 1 Lloyds Rep 389

Martin Maritime Ltd v Provident Capital Indemnity Ltd [1998] 2 Lloyd’s Rep 652

Mills v Roebuck

New Castle Fire Insurance Co. v Macmorran & Co. (1815) 3 Dow 255

Oscar Chess Ltd v Williams [1957] 1 All ER 325, CA

Parfitt v Thompsons 13 M & W 392

Parmentor v Cousins [1809] 2 Camp 235, Vol 170 E R 1141

Project Asia Line Inc v Shone (The pride of Donegal) [2002] EWHC 24 (COMM); [2002] 1

Lloyd’s Rep 659

Quebec Marine Insurance Co. v Commercial Bank of Canada [1870] LR3 PC 234

Reed (AE) & Co v Page & East Ltd [1927] 1 KB 743

Rio Tinto Co. Ltd v The Seed Shipping Co. Ltd (1926) 24 L1 L Rep 316

Smith v Faber [1893] 1 QB 340

Taylor Central Garages (Exeter) Ltd v Roper (1951) WN 383

The Eurasian Dream [2002] EWHC 118 (Comm); [2002] 1 Lloyd’s Rep 389

The Manifest Shipping Corp. v Uni- Polaris Insurance Co. Ltd and La Union Europee (The

Star Sea) (2001)

The Subra Valour [1995] 1 Lloyd’s Rep. 509

The Toledo [1995] 1 Lloyd’s Rep. 40

Thin v Richards and Co [1892] 2 QB 141

Thomas and Sons Shipping Co Ltd v The London and Provincial Marine and General

Insurance Co Ltd (1913) 29 TLR 736

Thompson v Hopper (1856) 6 E & B 172

67


Turnbull & Others v Janson (1877) 36 LT 635

Virginia Cardina Chemical Co. v Norfolk SS Co. (no.2) (1912) 17 Comm Cas 277

Vortigern [1899] p.140

Wallis, Son & Wells v Pratt & Haynes [1911] AC 394

Australian cases Oleo Pty Ltd v Vonguard Insurance Co Ltd (1991) Supreme Court of Western Australia

The Fireman’s Fund Insurance Co. v Western Australia Insurance Co. Ltd and Atlantic

Insurance Co. Ltd [1927] 28 L1 L Rep 243

American Cases Asbestos Corp. Ltd. V Comapagnie de Navigation Fraissinet et Cypre En Fabre [1972]

AMC 2581

CCR Fishing Ltd v British reserve Insuranve Co [1990] 1 SCR 814; [1990] AMC 1443

Huilever SA v The Otho [1943] AMC 210

Moores v Louisville Underwriters 14 Fed Rep 226

South Western Sugar and Molasses Co Insurance v Artemis Maritime Co Insurance

[1950] AMC 2054

Tidmarsh v Washington Ins. Co. (1827) 4 Mason 439

The Steel Scientist (1936) 82 Fed. Rep. 2 (d) 752

Wilburn Boat Co. V Fireman’s Fund Insurance Co. (1955) 348 US 31

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s3. web viewapproach towards the dissertation. my approach towards the dissertation has been...

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