“6 PERILS 6.1 This insurance covers loss of or damage to the subject-matter insured caused by: 6.1.1 perils of the seas… 6.2 This insurance covers loss of or damage to the subject-matter insured caused by: … 6.2.3 negligence of Masters Officers Crew or Pilots… provided such loss or damage has not resulted from want of due diligence by the Assured, Owners or Managers.”
“1. In consideration of an additional premium this insurance is extended to cover… 1.2 loss or damage to the Vessel caused by any accident or by negligence, incompetence or error of judgment of any person whatsoever. 2 The cover provided in Clause 1 is… subject to the proviso that the loss or damage has not resulted from want of due diligence by the Assured, Owners or Managers…”
“In general the word “fortuitous”, as interpreted by the cases, carries the connotation that the cause of the loss should not have been intentional or inevitable.”
“In my view, the unintentional admission of seawater into a ship, whereby the ship sinks, is a peril of the sea. There is no warranty in this policy against negligence; there is no exception of negligence; and the fact that the unintentional admission of water into the ship is due to negligence is, in my opinion, totally and absolutely immaterial. There is a peril of the sea whenever a ship is afloat in the sea and water from the sea is unintentionally admitted into her which causes a loss, either to the cargo or to the ship.”
“Nevertheless it is clearly established that a chain of causation running – (i) initial unseaworthiness; (ii) adverse weather; (iii) loss of watertight integrity of the vessel; (iv) damage to the subject-matter insured – is treated as a loss by perils of the seas, not by unseaworthiness: see, for example, Dudgeon v Pembroke (1874) 9 Q.B. 581, per Mr Justice Blackburn at p.595, and (1877) 2 App. Cas. 284, per Lord Penzance at p.296, and Frangos v Sun Insurance Office(1934) 49 Ll.L.Rep 354, at p.359.”
“Where there is an accidental incursion of seawater into a Vessel at a part of the Vessel and in a manner where seawater is not expected to enter in the ordinary course of things and there is consequent damage to the thing insured there is prima facie a peril of the seas. The accident may consist of some negligent act, such as improper opening of a valve, or a hole made in a pipe by mischance, or it may be that seawater is admitted by stress of weather or some like cause bringing the sea over openings ordinarily not exposed to the sea, or even without stress of weather, by the Vessel heeling over owing to some accident or the breaking of hatches or other coverings. These are merely a few among many possible instances in which there may be a fortuitous incursion of seawater. It is the fortuitous entry of the seawater which is the peril of the sea in such cases……….There are many deck openings in a Vessel through which seawater is not expected or intended to enter and, if it enters, only enters by accident or casualty. The cowl ventilators are such openings. If they were not closed at the proper time to prevent seawater coming into the hold, and seawater does accidentally come in and do damage, that is just as much an accident of navigation (even though due to negligence, which is immaterial in a contract of insurance) as the improper opening of a valve or other sea connection.”
“The accident may consist of some negligent act, such as improper opening of a valve, or a hole made in a pipe by mischance”
“It is the fortuitous entry of the seawater which is the peril of the sea in such cases……”
“If the respondents were preferring a claim under a contract of marine insurance, expressed in ordinary terms, I should be clearly of opinion that they were entitled to recover, on the ground that their loss was occasioned by peril of the sea within the meaning of the contract. When a cargo of rice is directly injured by ……… crew of the vessel, the sea has no share in producing the damage, which in that case, is wholly due to a risk not peculiar to the sea, but incidental to the keeping of that class of goods, whether on shore or onboard of a voyaging ship. But in the case where …….one of the crew leaves a port-hole open, through which the sea enters and injures the cargo, the sea is the immediate cause of the mischief, and it would afford no answer to the claim of the insured to say that, ……… had careful hands been employed, the sea would not have been admitted and there would have been no consequent damage.”
“In the case at the bar the loss resulted from the sinking of the ship due the ingress of sea-water. This loss would not have occurred on land. The requirement that the accident be “of the sea” is therefore met. The respondents argue that the cause of the loss was the corrosion and that this could have occurred anywhere, including on land. But the test is not whether the defect which started the causal chain which led to the loss is one that could occur exclusively at sea, but rather whether the accident itself – in this case the sinking of the ship – is one which could only occur at sea. Many sinkings result from causes which could occur on land……”
“This conclusion creates an immediate difficulty for the claimants, because they have not pleaded any specific facts that they say were both the reason for the initial incursion of water into the engineroom and which would also amount to one of the insured perils, as they acknowledged in par. 1 of their closing submissions. They are therefore forced to resort to two arguments. The first is that the vessel was seaworthy at the time of her loss and the incursion of seawater into the engine room is unexplained, so therefore there is a rebuttable presumption that the cause of the incursion of seawater is "perils of the sea". This argument necessarily presumes that the initial incursion was the proximate cause of the loss. The second argument (and I think their principal one) takes the opposite line. It is that the initial incursion of seawater into the engine room was not the proximate cause of the loss of the vessel; the proximate cause was the incursion of the water into the aft accommodation and the cause of that is both pleaded and, they say, proved. ”
“Third, as to "debility". Where a ship sinks through its own inherent weakness, there is no loss recoverable under the ordinary form of policy. It is not enough for this purpose that the vessel is unseaworthy. The loss must be disassociated from any peril of wind or water, even if these form the immediate context of the loss, and constitute the immediate agency (for example, the percolation of water through an existing flaw in the hull) by which the loss takes place. As Lord Buckmaster said in Grant, Smith v. Seattle Construction, sup., the policy is not a guarantee that a ship will float. See also Fawcus v. Sarsfield, (1856) 6 E. & B. 192, in relation to the first loss; Merchants' Trading Co. v. Universal Marine Insurance Co., (1870) 2 Asp. M.L.C. 431, the direction of Mr. Justice Lush approved by the Court of Common Pleas; Ballantyne v. MacKinnon, [1896] 2 Q.B., 455; Sassoon v. Western Assurance Co., [1912] A.C. 561. Finally, as to the requirement that a loss by perils of the seas shall be "fortuitous". There may be philosophical problems here, possibly compounded by the placing of more weight than it was intended to bear on the apophthegm of Lord Herschell in Wilson, Sons & Co. v. Owners of Cargo per the " Xantho",((1887) 12 App. Cas. 503 at p. 509) that – . . . the purpose of the policy is to secure an indemnity against accidents which may happen, not against events which must happen. There can be few losses of which it can be said that they must happen, in the sense that this accident is bound to happen in this way at this time. Indeed, in some of the leading cases it could hardly have been predicted that the loss was bound to happen at all, whilst the policy was on risk. It is, however, unnecessary to enter into this problem. When the vessel succumbs to debility, the claim fails, not because the loss is quite unattended by fortuity, but because it cannot be ascribed to the fortuitous action of the wind and waves. A decrepit ship might sink in perfect weather tomorrow, or it might not sink for six months. To this extent a loss tomorrow is not inevitable. But if the ship does sink, there is no external fortuitous event which brings it about. In respect of such losses, the ordinary marine policy does not provide a remedy.”
“The view that the proximate cause of the loss when the Vessel has been scuttled is the inrush of the sea water, and that this is a peril of the sea, is inconsistent with the well-established rule that it is always open to the underwriter on a time policy to show that the loss arose not from perils of the seas but from the unseaworthy condition in which the Vessel sailed: see Arnould on Marine Insurance, s. 799. When the Vessel is unseaworthy and the water consequently gets into the Vessel and sinks her, it would never be said that the loss was due to the perils of the sea. It is true that the Vessel sank in consequence of the inrush of water, but this inrush was due simply to the unseaworthiness. The unseaworthiness was the proximate cause of the loss. Exactly the same reasoning applies to the case of scuttling; the hole is there made in order to let in the water. The water comes in and the Vessel sinks. The proximate cause of the loss is the scuttling, as in the other case the unseaworthiness. The entrance of the water cannot be divorced from the act which occasioned it.”
“ …. So it is in cases on time policies, where the loss is directly caused by unseaworthiness, for then it is plain that the loss was a certainty, whatever the state of the weather or the sea, and, as has been often said, perils of the sea refer to things that may happen, not to things which must happen in the ordinary course of navigation …..”
“… the loss sustained was not occasioned by a peril of the sea, for in our judgment the loss complained of arose solely by reason of the inherent vice of the subject-matter insured : we mean the insufficiency of coal with which the ship started upon her voyage, the consequence of which was that what in fact did happen must have happened, namely that the ship ran short of coal, no sea peril bringing this about in any shape or way, or placing the ship in a position of danger thereby.”
“If it is known that a ship was seaworthy when she set out, and she has never been seen since and nothing has been heard of her crew, then on the balance of probabilities she must have sunk and, on the balance of probabilities, the sinking must have been due to “perils of the sea” because she was seaworthy when she set out But if it was not shown that the ship was seaworthy when she left on her last voyage, the presumption does not apply since it cannot be held on the balance of probabilities that her presumed sinking was due to perils of the sea rather than to her unseaworthy condition.”
“Please make sure that all waterlines are drained and do not contain any water. Also make sure that temperature in the bow thruster room is kept above zero degrees Celsius. This in order to prevent frozen lines.”
“There are still problems with pumping water out in the hold. We are not able or hardly able to pump water out of the hold in the aft of the ship. This is life-threatening and remains so.”
“UNDERSTAND. IF THERE IS TIME THEN WE WILL TRY TO REPAIR THIS. BUT IT REMAINED THE CASE IN BOLNES THAT IT IS EXTREMELY DIFFICULT TO DO THIS AND WAS AGREED TO DO THIS TEMPORARILY WITH THE SUBMERSIBLE PUMP.”
“At the last inspection from nnpc [the P & I Club] it was assumed by the inspector that this was working. He had tested this, we had had a problem. The bilge pumping gear fore was rectified with the emergency fire pump. This works properly, but aft ….???? When pumping out with a small pump, it is accompanied by a shot of oil. So all valves need to be tackled thoroughly. Managers: “WE LOOKED AT THIS IN BOLNES AND AGREED THAT THE LADS WOULD DO THIS ON BOARD DURING THE JOURNEY. Crew: “An injector has been brought on board, but has never been fitted, due to lack of time and lack of fitters in Bolnes.”
“IT WAS AGREED IN BOLNES TO TEMPORARILY POSTPONE THIS.”
“This point remains a hot item !!!!!!! Portside sump sometimes work, but starboard side bilge sump does not work !!! Managers: “GET HENK TO HAVE A LOOK AT THIS HERE”
“Hold bilge pump system Tested while washing the hold and found to be in good working condition. The floors of the sumps were contaminated with old cargo/rust.”
“We also have a portable pump – capacity about 50 metres cubed per hour. Electric. Armoured tube for suction was in hold. We use it if bilge is blocked.”
“Where a ship is damaged, but is not totally lost, the measure of indemnity, subject to any express provision in the policy, is as follows:— (1)Where the ship has been repaired, the assured is entitled to the reasonable cost of the repairs, less the customary deductions, but not exceeding the sum insured in respect of any one casualty …”
“The fraudulent assured must not be allowed to think: if the fraud is successful, then I will gain; if it is unsuccessful, I will lose nothing”
“……the policy of the rule is to discourage any feeling that the genuine part of a claim can be regarded as safe - and that any fraud will lead at best to an unjustified bonus and at worst, in probability, to no more than a refusal to pay a sum which was never insured in the first place.”
“I think the authorities establish the following propositions: First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shewn that a false representation has been made (1) knowingly, or (2) without belief in its truth, or (3) recklessly, careless whether it be true or false. Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states. To prevent a false statement being fraudulent, there must, I think, always be an honest belief in its truth. And this probably covers the whole ground, for one who knowingly alleges that which is false, has obviously no such honest belief. Thirdly, if fraud be proved, the motive of the person guilty of it is immaterial. It matters not that there was no intention to cheat or injure the person to whom the statement was made.”
“Unhappily such fraudulent claims are now legion. They occupy the court time of District Judges and Circuit Judges in West Yorkshire literally week in and week out. My own judicial experience reflects, I have no doubt, that of many of my brethren throughout the country. Just about every variant of a fraudulent claim comes before the court, including deliberately staged collisions, damage caused to vehicles which have never been in collision at all, claims deriving from the most trivial touching of vehicles, and claims in which a driver will assert that his car was carrying other members of his family including his children, when in fact none were present but all of whom have reported to a hospital or their General Practitioner that they have been injured, and who are then able to produce an apparently independent expert's report confirming the fact of such injury. The cost to the insurance industry and to other honest policy holders must be very substantial. In addition, and of more relevance to these proceedings, the cost in court time in trying such cases is very high, with the added knock-on effect of casting suspicion onto many genuine claims so that claimants are put to proof of their legitimate and genuine claims for compensation when in other circumstances they might not have been called upon to do so.”
“We have reached the conclusion that notwithstanding the decision and clear reasoning of the Court of Appeal in Ul-Haq, the court does have jurisdiction to strike out a statement of case underCPR 4.3 (2) for abuse of process even after the trial of an action in circumstances where the court has been able to make a proper assessment of both liability and quantum. However we further conclude, for many of the reasons given by the Court of Appeal, that, as a matter of principle, it should only do so in very exceptional circumstances.”
“The draconian step of striking a claim out is always a last resort, a fortiori where to do so would deprive the claimant of a substantive right to which the court has held he was entitled after a fair trial. It is very difficult indeed to think of circumstances in which such a conclusion would be proportionate. Such circumstances might, however, include a case where there had been a massive attempt to deceive the court but the award of damages would be very small.”
“On that basis, the Board has no hesitation in upholding the judge’s conclusion that, quite apart from any question of arson, the respondent was entitled to reject the appellant’s insurance claim (as it did) on the ground that the appellant had sought to promote it in May 1992 by lying to the respondent about the position, and his state of mind, regarding any attempt to sell the house prior to the fire. The materiality of such matters to the respondent’s investigation and evaluation of this insurance claim is not challenged and is, as the judge indicated, obvious.”
“After further internal investigation due to the problems onboard DC Merwestone we will inform you as follows. Facts Floating visual by crew28 January 2010 around 21.00 hrs. Bilge alarm from bow thrusters and engine room have the same alarm point so nobody can see exact which area gives alarm. First alarm was going off around noontime due to rolling vessel (weather SSE 7) vessel rolling. No investigation in bow thruster room. When bilge alarm activate during rolling nobody has controlled this due the rolling. ……………. Due to the weather circumstances the first bilge alarm has go gone of off [sic] in the morning. If there was leakage or due to rolling we are not sure. ……….. Conclusion 1. starting time of leakages is around 13.00 hrs on 28 of January”
“(2)(a) What evidence do Owners rely on that the bilge alarm operated around noon on 28 January? (b) Who heard it and when? (c) Who acknowledged it? (d) Who took the decision not to investigate it?”
“2(a) Owners were told by the vessel’s captain that the bilge alarm operated around noon on 28 January. 2(b) Owners believe it was the watchkeeper/Master on the bridge and the Engineer in the engine room. They thought the alarm was routine. For further information, Owners suggest Underwriters refer to their own interview notes. 2(c) Owners do not know. They suggest that Underwriters refer to their own interview notes. 2(d) Owners assume it was the Master. It was in any event not possible to go forward. Temperatures were minus 10 to minus 20, and the vessel was shipping heavy seas and water over the fore deck. Furthermore, Underwriters have interviewed the crew members.”
“Whilst at sea, in SSE’ly Beaufort force 7 winds, at about noon on 28th January the bilge alarm sounded. There is a bilge alarm fitted in the Bow Thruster Room and the Engine Room however the alarm is connected to a single buzzer/warning light in the Engine Room and on the Bridge. If the alarm sounds it is necessary to verify the bilge levels by visual inspection. The vessel was rolling, and due to the adverse weather (which would have been just aft of the port beam), the alarm was accepted without anyone going forward to inspect the Bow Thruster Compartment. The crew’s experience was that the alarm is sometimes triggered when the vessel was rolling and they were not unduly concerned. The bilge warning light would have remained on.”
“No crew member report this. But according the last ism report it was working so theoretical it have to be working. Also at that time. We have to be aware the report which was send by owners was a report about the situation which most probably happened, not the one who happens. Looking to the weather forecast and wind direction the vessel was rolling at that time, so from experience we have the idea what has happened. No crew member has report this.”
“2a. According to the last ISM report it was working properly 2b. no crew member reported this to us 2c. nobody 2d. we cannot say if this decision was made at all as no comment was made on this alarm.”
“In the morning a bilge alarm went off do you know roughly at what time and what did you do and why? If I say the following can you go along with it think about what you stated earlier. [this part was in Dutch, the remainder was in English] Please be aware the report we sent was based on brief information from various persons. Based on the information we sent the message as what could happen based on this info When vessel starts rolling after leaving Klaipeda we had bilge alarm. This is a combined alarm between bow thruster room and engine room. We check the engine room but this looks in normal condition. Due to the rolling we take it as a fact bilge alarm was from bow thruster room and activated due to rolling. Alarm sound is on the bridge and in the engine room so watch keeping person should have heard this Acknowledgement has to be done in the engineroom We can not give a clear answer on the last questions. It should be motorman or officer of watch.”
“The further edited version. Read your corrected item two (a/b/c/d) very carefully again! If I see things from the point of view of the insurers, I would still have a question about why the bow thruster room was not checked? Possible reply could be weather on board too bad and therefore dangerous?????”
“We as owners have asked the crew why they have not checked the bow thrusters. Answer weather was very bad se 7/8 see log book. Vessel was rolling water covers deck and hatches tempeture -20 degrees, so it was not safe for crew to go outside”
“This email is strictly confidential, please do not forward. ….. Important; nobody can say “the insured is to blame” (in the sense of the shipowner, let’s say “Werkendam”). That would unleash a discussion about the final sentence in 6.2.5 of the policy conditions, namely; Provided such loss or damage has not resulted from want of due diligence by the Assured, Owners or Managers. On the other hand, it will probably not come to that; after all, we’ve got nothing to hide. However, the men (crew) must not screw things up at the expense of the office. Admit mistakes. Everybody makes mistakes once in a while, especially if there is a bit of panic, and errors by the crew (crew’s negligence) is covered.”