Judgment - Reinsurance Focus

More documents

Recommendations

Info

$G:\Carlisle M&O 11-08.wpd - Reinsurance Focus$

circumstances? (2) Did the London insurers, by reason of the terms of the Builders' Risks Policy, waive disclosure of the said circumstances? Issue 8: Did Sembawang suffer no loss as a result of any alleged breach of duty on the part of NHM on any of the grounds set out in paragraph 9(1) of the Amended Defence and Counterclaim [i.e. because it was not liable to make good the damage to the vessel]? Issue 9: Did CPL suffer no loss (by way of a liability to Sembawang for breach of clause 15.12 of the Completion Contract) as a result of any alleged breach of duty on the part of NHM on the grounds set out in paragraph 16C of the Amended Defence and Counterclaim [i.e. because CPL was itself entitled to recover the full amount of the loss under the policy]? [I have added the words in brackets to assist in understanding the nature of the issues.] The policy 7. It is convenient at this point to refer to the salient terms of the London market policy. As is commonly the case, the contract is to be found in a market slip to which each of the claimants subscribed. The slip describes the type of cover as 'Marine Hull' and the form of policy as 'MAR 91 / Slip Policy'. It does not appear to have been envisaged, therefore, that a formal policy wording would be produced and none was. 8. The following clauses are of particular importance: “ASSURED: SEA TRUCKS (NIGERIA) LIMITED and/or DIESEL POWER (NIGERIA) LIMITED and/or DOLPHIN OFFSHORE (NIGERIA) LIMITED and/or WALVIS (NIGERIA) LIMITED and/or WEST AFRICAN DRYDOCK LIMITED and/or Subsidiary, Affiliates, Associated and Interrelated Companies and/or Joint Ventures as may be required as their respective rights and interest may appear. PROJECT/ PERIOD: INTEREST: Attachment hereon with effect from 21 st May 2003 whilst at Sembawang Shipyard, Singapore, undergoing completion, outfitting, commissioning and testing during period of approx. 6½ months, expected final delivery date after sea trials, mid January 2004. HULL AND MATERIALS etc., MACHINERY OUTFIT etc., and everything connected therewith nothing excluded. Sum Insured:-
CONDITIONS: Hull Value & Equipment: US$ 21,000,000 Final Contract Value: US$ 70,800,000 Institute Clauses for Builders' Risks 1 st June 1988 (C1.351). Institute War Clauses Builders' Risks 1 st June 1988 (C1.349). Institute Strikes Clauses Builders' Risks 1 st June 1988 (C1.350). Institute Extended Radioactive Contamination Exclusion Clause 1 st November 2002 (Cl.356A). Institute Chemical, Biological, Bio-Chemical, Electromagnetic weapons and cyber attack exclusion clause (Cl.365). Including Assured, interest of Mortgagees (and Notices of Assignment in respect thereof), Loss Payees, Additional Assureds and Waivers of Subrogation as may be required. Any amendments and/or agreements and/or alterations and/or increases (not exceeding written line) or decreases in value to be agreed slip leading underwriter only and to be binding on all others hereon subject to adjustment of premium at expiry. Brokers Cancellation Clause as attached. Several Liability Notice LSW 1001 (Insurance) as attached. Premium Payment Clause LSW 3000 (45-days).” 9. In the light of the policy terms I turn to consider the issues that arise on the appeal. Issue 1: Was Sembawang a co-assured under the Builders' Risks Policy on the grounds set out in sub-paragraph 7(7) of the Amended Defence and Counterclaim? 10. Two quite separate questions arise under this issue: (a) on the true construction of the slip was Sembawang one of the assured; and (b) if not, was Sembawang entitled to enforce the contract as an undisclosed principal? (a) Was Sembawang an assured? 11. Before the judge NHM argued on a number of different grounds that Sembawang was an assured under the terms of the policy. Before us, however, they relied on only one ground, namely, that Sembawang was an “additional assured” within the meaning of the clause in the slip which provides “Including Assured, interest of Mortgagees (and Notices of Assignment in respect thereof), Loss Payees, Additional Assureds and Waivers of Subrogation as may be required.” For convenience I shall refer to this as the “general extension” clause. In summary, the argument was that these words operate so as extend cover to any person who has an insurable interest in the vessel's hull and machinery insofar as it may be necessary for the named assured that such persons should be covered.
Page 1 and 2: Neutral Citation Number: [2006] EWC
Page 3 and 4: On 16 th May 2005 the insurers bega
Page 5: NHM contends that, by reason of the
Page 9 and 10: commercial needs, but nonetheless I
Page 11 and 12: which was to include Sembawang as a
Page 13 and 14: to me that the intention cannot be
Page 15 and 16: 24. Having regard to the circumstan
Page 17 and 18: ound themselves to waive their righ
Page 19 and 20: esulting from or arising out of or
Page 21 and 22: matter, whether the insurable inter
Page 23 and 24: Nonetheless, it does not follow tha
Page 25 and 26: 44. In Merrett v Capitol Indemnity
Page 27 and 28: cases do not turn on any principle
Page 29: under the policy and therefore had

Judgment - Reinsurance Focus

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?