UNIVERSITY OF NOTTINGHAM DISSERTATION FOR DEGREE OF MASTER OF LAW (LLM) LLM in MARITIME LAW

DEVIATION IN MARINE INSURANCE AND CONTRACTS OF CARRIAGE BY ROSHNI MANUEL Student id-4112652

Candidate of the 2010 LLM Programme School of Law, University of Nottingham

I hereby declare that I have read and understood the Regulations governing the submission of postgraduate Dissertations, including those relating to length and Plagiarism, as contained in the LLM Manual and that this Dissertation conforms to those regulations.

DEVIATION IN MARINE INSURANCE AND CONTRACTS OF CARRIAGE

CONTENTS INTRODUCTION .1 CHAPTER -1 2 DEVIATION IN MARINE INSURANCE (ATTACHMENT AND ALTERATION OF RISK) WHAT MARINE RISK CONVEYS DESCRIPTION OF THE VOYAGE AT AND FROM ATTACHMENT OF RISK DELAY IN COMMENCING THE RISK ALTERATION OF RISK (CHANGE OF VOYAGE,DEVIATION,DELAY) CHAPTER-211 HELD COVERED CLAUSES AND ICC 2009 HELD COVERED CLAUSES THE ICC PRACTICALITY NOTICE ADDITIONAL PREMIUM UTMOST GOOD FAITH

CHAPTER-3 19 DEVIATION IN CONTRACTS OF CARRIAGE DEPARTURE FROM DIRECT ROUTE FOR NAVIGATIONAL REASONS DEPARTURE FOR BUNKERING PURPOSES JUSTIFIABLE DEVIATION (COMMON LAW AND HAGUE-VISBY RULES) o SAVING HUMAN LIFE o AVOIDING DANGER TO SHIP OR CARGO o LIBERTY CLAUSES o EFFECTS OF DEVIATION o BREACH AND WAIVER o WAIVER IN MARINE INSURANCE DEVIATION AND GENERAL AVERAGE POST HAIN CASE

CHAPTER-4.34 COMPATIBILITY BETWEEN CARRIAGE CONTRACTS AND MARINE INSURANCE WHERE THERE IS EXPRESS AUTHORIZATION BY AGREEMENT IMPLIED COVER BY THE POLICY SAVING LIFE INVOLUNTARY DEVIATION UNINSURED PERIL COMPATIBILITY BETWEEN MARINE INSURANCE AND CONTRACTS OF CARRIAGE CONSEQUENCES OF EXCUSED DEVIATION AND DELAY RESTRICTIVE SCOPE, CESSATION OF EXCUSE AND CONTINUATION OF THE CONTRACT VOYAGE

CONCLUSION.45 BIBLIOGRAPHYI-II CASES REFERREDIII-VII

Introduction If a boat captain violated the itinerary to which it was committed and thereby brought about the loss of the boat, he shall measure out to its owner as much as the boat, and its hire- Sumerian tablet, circa 1800 B.C1. Deviation is a subject of importance in both marine insurance and contracts of affreightment. Deviation means, any departure from the insured adventure sufficient to constitute a variation of risk.2The doctrine has its origin in marine insurance law; whenever a vessel deviated from the route insured, the legal position used to be that she was uninsured from the time she deviated as the voyage is different from that which was insured.3 Concept arose from disputes on insurance policies where either the ship or the cargo or may be both were lost during the voyage and insurance claims were shielded by the insurers on the fact that the voyage insured for, was never performed. Where a ship without lawful excuse, deviates from the voyage contemplated by the policy, the insurer is discharged from liability as from the time of deviation, and it is immaterial that the ship may have regained her route before any loss occurs.4 In common law its origin is attached with Davis v. Garrett as it applies to contracts of carriage. There is a duty in the owner of a vessel whether a general ship or hired for the special purpose of the voyage, to proceed without unnecessary deviation in the usual and customary course5 and this should be followed in the absence of a liberty clause.

The Deviating ship- by Steven F. Friedell .32 Hastings L.J. 1535 (1980-1981); J. Pritchard, Ancient near eastern texts relating to the Old Testament 525 (3d ed J. Finkelstein trans, 1969). 2 Oswell v Vigne (1812) 15 East 70; provides idea on the concept. 3 15 (Lord wright) Rendall v. Arcos (1937)43 Com Cas 1 (HL), Hain Steamship Co v Tate & Lyle (1936) 55 Ll LR 159 (HL), 173 (Lord Atkin) 4 The Marine Insurance Act 1906, s.46(1) 5 Davis v. Garrett (1830) 6 Bing. 716 ,725 per Tindal C.J

Chapter-1- Deviation in marine insurance (attachment and alteration of risk) From its inception two factors where vital in deviation, firstly the act which amounts the breach (geographically deviating from agreed voyage) and secondly the business competence linking the cargo interests and the shipowners. The geographical deviation still means the same but the business efficiency linking the cargo interests and ship owners have evolved tremendously. The carrier inserted clauses which allowed them to sail, proceed and sky... at certain ports and in response to such clauses the cargo owners tried to confine the significance of these clauses within the frame by insisting upon the description and rationale behind the departure from the direct route. What marine risk conveys The assured should have an insurable interest in the subject matter insured only then he would be indemnified under a marine insurance policy and the risk attaches from the moment the subject matter insured embarks upon the voyage contemplated in the policy. If the risk is limited by time, the policy is a time policy6 and if it is points of locality, then it is a voyage policy.7This discrepancy is important to note, as the period for which the subject matter is insured depends on whether it is written on time or voyage basis. Every marine policy must either be a time policy or a voyage policy or combination of both, and it cannot be something else 8. There is implied warranty of seaworthiness in voyage policy and unless it is mentioned in the contract, there is no implied warranty in time policy.9 Some general principles applied to voyage policies will not apply to time policy; the doctrine of deviation, delay and change of voyage will affect only policies written on voyage basis. In a voyage policy the place where the risk commences terminus a quo is usually the port of departure, for the ship and for goods it is the port of loading; the place where the risk ends terminus ad quem is the destination port or port where cargo should be discharged.10

6 7

Arnoulds Law of Marine Insurance and Average (17THedn). chapter 14 para -02 MIA 1906 s.25 (1). 8 The Eurysthenes (1977) Q.B 49,73; 9 Arnoulds para 13-02; MIA 1906 S. 39. 10 Ibid Para 14-03.

Description of the voyage The insured voyage must be described in the voyage policy i.e. terminus a quo and terminus ad quem should be stated and described in such a way that parties should know when exactly the subject insured is within the cover. And if the vessel is to stop at intermediate ports, the policy should contain a clause providing conditions in which the ship is allowed to halt. But in time policies, the policy will cover any voyage the ship pursues and loss resulting from insured perils for the time covered and once the risk is attached the insurer will have right to the full premium.
11

The

venture begins and ends with the term. But at times, the policy is worded: during the expiry of the term, if the ship is at sea, the ship will be held covered to her port of destination (continuation clause)12 then in such cases the policy ends at port of destination. Time policy may be written with local limits and in that case if the vessel leaves the area specified in the policy there wont be any cover. If insurance is stated to have started from one date to another date, then the risk would not attach unless the first date stipulated has begun and the cover will end on the last date given.13 And the actual time the risk will attach and terminate depends on the place where contract is executed, unless a different time is computed. 14 At and From there is an implicit requisite that the adventure would commence within a reasonable time under a voyage policy and the matter would be insured at and from or from a specific place and if the voyage has not been commenced the insurer may avoid the contract15. Under the S.G form, the insured voyage would commence at and from rather than simply from the terminus a quo, its because when it is simply from the terminus a quo the risk would not attach unless it sailed for the insured voyage. But when it is at and from, the vessel is deemed to be protected during the time she spends at the port preparing for the insured voyage 16. The MAR 91(commonly used) states voyage or period of insurance. However with the advent of transit clauses even this is

11 12

Tyrie v Fletcher (1777) 2 Cowp. 666; Institute time clauses (hulls) cl.2 13 Isaacs v Royal Ins Co (1870) L.R. 5 Ex.296 (fire policy) 14 Walker v Protection Ins Co, 29 Maine R. 317 (1849); 1 Phillips, S.949. English courts follow the same. 15 S.42 MIA 1906; Arnoulds Pg 437. 16 Motteux v London Ass Co (1739) 1 Atk.545 ; Forbes v Wilson (1800) Marshall, Ins. 206; 1 Park 472.

less significant. But, if the hull cover is on voyage basis, it is necessary to define the particular point at which the cover begins and not merely from the port of departure. Attachment of risk The risk attaches only if the vessel embarks upon the insured adventure; this applies to both time and voyage policies. Thus, Where the place of departure is specified by the policy and the ship instead of sailing from that place sails from any other place, the risk does not attach17 And similarly if the ship sails for other destination than the one covered in the policy risk do not attach.18 And so is unreasonably delayed commencement of insured voyage.19 A different voyage from what is insured, attaches no risk. In Simon, Israel & Co v Sedgwick20 the cargo cover for the voyage at and from Mersey, to any port or ports in Portugal and/or Spain, this side Gibraltar, and/or at or from thence by any inland conveyance, to any place or places in the interior, any deviation or change of voyage covered on an additional premium. The goods where shipped from Bradford to Madrid and their discharge were anticipated this side i.e. west of Gibraltar after the voyage at Seville. But the shipment was in fact for discharge at Cartagena by error, on other side of Gibraltar. The vessel was lost before it could reach the west coast and the assured rendered additional premium for the mistake. The bills of lading (cargo) indicated for Cartagena and this means that, goods were never on the insured voyage and thus the risk never attached to the lost cargo and the deviation clause could not be invoked. The insurers refused to accept the additional premium in this case and the court upheld their right to do so. Herein although the additional premium was paid, the risk did not attach; hence the assured may be entitled to restitution by reason of a total failure of consideration under s.84 (1) of MIA. Similarly, in Sellar v MVicar21 the insurers were held not liable as the ship did not engage upon voyage insured. Herein the moment master undertook to carry cargo from Demerara to Berbice which did not lie in the

17

MIA 1906 s.43. Wooldridge v Boydell (1778) 1 Doug 16. 19 Maritime Ins Co v Stearns [1903] 2 KB 912. 20 (1893) 1 QB 303 (CA) 21 (1804) 1 Bos & Pul( NR) 23.
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ordinary course of voyage from Demerara to London, the vessel is said to have departed from the insured voyage. Again, if the vessel does not embark upon the insured adventure, although the route stipulated in the policy is followed; the underwriters would not be liable. In Way v. Modigliani22 the policy was from any port in Newfoundland to Falmouth or ports of discharge in England at and from 20 october. The vessel did pursue the voyage from Newfoundland to England. But the insurers were held not liable as the vessel went on a fishing voyage rather than sailing directly to England. The initial attachment of risk

would be there as the vessel did pursue the voyage from Newfoundland to England; but the underwriters were not liable because of the deviation from insured adventure. The subject matter insured is expected to embark upon the insured voyage and if that voyage is not pursued the risk would not attach and in the absence of a cover, it would be a burden for the carrier if the deviation is not justified or else it should be given cover by payment of additional premium. But what happens if the loss occurs before the dividing point i.e. whilst in common route. This was discussed in Wooldridge v Boydell 23 where insurance cover commenced at and from Maryland to Cadiz. But the vessel sailed to Falmouth and was lost in the initial common route. In such cases normally if the loss had occurred before the deviation when the ship was in fact in the voyage insured, cover should be given as there was initial attachment of risk. But herein evidence showed that Cadiz was never considered to be the destination port. there cannot be a deviation from what never existed.24 In Simon,Israel & Co v Sedgwick, although the insurance policy worded, from the time of leaving the warehouse in UK ;the argument that risk attached from the time the goods left the warehouse in Bradford and the consequent error of loading for a port beyond Gibraltar fell within the purview of the clause permitting deviation on the payment of additional premium was rejected on the ground that, even if cover could be
22
23

Hence no cover and held that

(1787) 2 TR 30

(1778) 1 Dougl 17 24 Ibid 18 per Buller J.

extended to incidental land or inland water transit, subject matter of the insurance is the designated sea voyage.25 This reasoning was followed in The Prestrioka26 where a cargo of rice was insured for an adventure from Kohischang, Thailand to Dakar port, Senegal and it incorporated institute cargo clauses (A). The goods were taken on board of

Prestrioka and bill of lading was issued for Dakar. However ship never reached its destination and was never known of but strong evidence showed that it was a Phantom vessel destined before departure for disappearance and/or destruction having carried its cargo to a port far from that anticipated by the cargo owners.27The CIF purchasers of rice claimed under the insurance which under the transit clause would cover risk from the time the goods leave the warehouse or place of storage for commencement of transit. But the court on the basis of s.44 stated that risk would not attach unless the vessel embarks upon the insured voyage. The evidence in this case shows no intention to embark upon the insured adventure. By following Simon, Israel v Sedgwick it was held that marine adventure did not commence until the vessel carrying the subject matter insured leave the named port to pursue the voyage insured. Moreover, where an insurer invokes s 44,the court will conduct ex post facto exercise to determine not simply the contractual, but the actual, destination of the ship at the time of sailing, which exercise depends upon the acts and intentions of the owners/or a master at the time of its departure. If the court determines that, at the time of sailing, vessel and cargo were in truth bound for a terminus ad quem other than that identified in the policy as definitive of the voyage insured, then s 44 will apply and the risk which prima facie attached when the goods left the warehouse will in the event be held not to have attached.28The risk would not attach if the subject matter was never intended to embark upon the voyage insured. It is clear through these cases that a clause in the policy cannot change the fundamental nature of the policy.29This operates on the assumption that the insured adventure takes place and on that basis addresses the
25 26

MIA 1906,ss 1-3. Nima SARL v Deves Insurance plc ( The Prestrioka) (2003) 2 Lloyds Rep 327 27 Ibid Para 59 Per Potter LJ. 28 Ibid Per Potter LJ Para 53-54. 29 Howard Bennett-The Law of Marine Insurance (2nd edn) 2006; pp 18.12.

question of the commencement and termination of the risk 30 and if assured varies it the underwriter is discharged.31 (The prestrioka and ICC 2009 will be dealt in next chapter) Delay in commencing the risk The policy will attach at the place of departure and the vessel wont be covered there indefinitely. In Chitty v Selwyn32it was held that if all thoughts of the voyage are laid aside, and the ship lies there five, six or seven years, with the owners privity, it shall never be said that the insurer is liable; for it would be absurd to make him suffer for the whim or caprice of the owner, who chooses to let the ship lie and rot there33. This approach was followed in Grant v King34 To discharge the policy there must be a clear imputation of waste of time, mere length of time elapsing between the sailing of the vessel and the underwriting of the policy, is not of itself sufficient to avoid the policy; it is capable of explanation. 35 However this kind of delay whether for the purpose of voyage, or not should be considered and should be clarified. Furthermore, the delayed voyage should be in terms with policy agreed for and not deviate from it36. Alteration of risk (change of voyage, deviation, delay) -Any departure from the voyage insured is sufficient to cause a variation of risk.37Change of voyage is a voluntary change of the destination from that contemplated by the policy after the commencement of risk38. To identify change of voyage, identifying the insured voyage, liberty clauses and the voluntary nature of it is necessary. Here the assured has no intention to complete the voyage insured i.e. Termini ad quem would be changed. In Simon, Israel & Co v Sedgwick39 - a held covered clause cannot be invoked if the policy does not attach and this means there can be change of voyage only after the risk has
30

Nima SARL v Deves Insurance plc( ThePrestrioka) (2003) 2 Lloyds Rep 327. Per Potter LJ at para 48; Nam Kwong Medicines & Health Products Co Ltd v China Insurance Co Ltd (2002) 2 Ll Rep 591 (Hong Kong High Court) 31 Per Blackburn J. Company of African Merchants ltd v British & Foreign Marine Insurance Co.Ltd (1873) LR 8 Ex 154,157. 32 Chitty v Selwyn(1742) 2 Atk 359 33 Ibid Per Lord Hardwicke. 34 Grant v King (1802) 4 Esp 175,176-7 35 Ibid 176-7 per Lord Ellenborough. 36 The law of marine insurance (2nded) Howard Bennett. Pg 521.
37
38

Birrell v Dryer (1884) 9 App Cas 345 (1893) 1 QB 303;

39

MIA 1906,s 45(1).

attached.40 In Thames & Mersey Marine Insurance Co Ltd v HT Van Laun & Co - the test for determining whether an interruption of voyage amounts to a deviation only or is it a change of voyage, is to identify whether the ultimate terminus ad quem remains the same41.But if the master not acting on his own initiative, but on orders which morally as a good subject he ought not to have resisted42 is an excepted peril. Under s. 45(2), unless the policy otherwise provides, where there is change of voyage, the insurer is discharged from liability as from the time of change of voyage.... provision stipulates unless a policy otherwise provides and an example of such a policy is Cl-2 IVCH (83) the held covered clause states; Held covered in case of change of voyage; provided notice be given to the underwriters immediately after receipt of advices and any amended terms of cover and any additional premium required by them be agreed. When a ship is insured at and from a given port, the probable continuance of the ship in that port is in the contemplation of the parties to the contract. If the owners, or persons having authority from them, change their intention, and the ship is delayed in that port for the purpose of altering the voyage and taking in a different cargo , the underwriters run an additional risk if such a change of intention is not to effect the contract.43 The unlawful departure from the route insured without changing the terminus ad quem amounts to deviation in Marine insurance and discharges the insurer under the contract. The risk will not re-attach if the ship rejoins the insured route after the deviation 44. In deviation the vessel departs from her usual and customary route but there is intention to complete the insured voyage by returning to the course insured. Here the termini ad quem is not changed. Deviation from the voyage insured arise from after thoughts, after interest, after temptation; and the party who actually deviates from the voyage described, means to give up his policy. However, a deviation merely intended but never

40 41

Law of Marine Insurance- Susan Hodges (1996) Pg 60. Thames & Mersey Marine Insurance Co Ltd v HT Van Laun& Co (1917) 23 Com Cas 104,110 per Lord Davey 42 Richard v Forest Land, Timber & railway Co ltd (The Minden) [1942] AC 50,109 per Lord Porter. 43 Tasker v. Cunninghame (1819) 1 Bligh 87. Per Lord Chancellor 44 Elliot v Wilson (1776) 4 bro PC 470.MIA 1906 .s 46(1).

carried into effect is no deviation45. In all the cases of that sort, the terminus a quo and ad quem, were certain and the same.46 If the policy doesnt specify any route the insured route would be the usual and customary route47. It is the duty of a ship, at any rate when sailing upon an ocean voyage from one port to another, to take the usual route between those two ports. If no evidence be given, that route is presumed to be the direct geographical route, but it may be modified in many cases for navigation or other reasons, and evidence may always to be given to show what the usual route is, unless a specific route be prescribed by the (contract).48 Clauses are inserted in the contract of carriage which gives liberty to touch and stay at some specific ports and this liberty is to halt at only those ports prescribed in the clause and those ports must be visited in the order given in the policy and if the order is not mentioned then geographical order should be followed 49. It also abstains from halting at a port which might be sanctioned by usage in the absence of express contractual term.50Furthermore such clauses would be construed in a way that the vessels could touch those ports only in connection to the voyage.51 Once the vessel embarks upon the insured voyage, there is cover for that particular voyage and cover ceases to exist when there is actual deviation and not merely intention to deviate.52 From the point the vessel deviates the cover is lost and the insured route pursued till the deviating point will be covered. However if evidence prove that a different destination was ventured upon then no cover as the insured adventure is the subject matter of marine insurance. And it is immaterial that the ship may have regained her route before any loss occurs.53A deviation never puts an end to the

45 46

MIA 1906, s.46(3) Wooldridge v Boydell (1778) 1 Doug 16, 18 47 MIA 1906- s. 46(2). 48 Reardon Smith Line Ltd v Black sea & Baltic general insurance co ltd (1939) AC 562,584. 49 Beatson v Haworth (1796) 6 TR 531; Marsden v Reid (1803) 3 East 572; The Dunbeth (1897) P 133; MIA 1906 s. 47(1 &2); Law of Marine Insurance (2ndedn) 2006- Howard Bennett, Pg-528; 50 Elliot v Wilson (1776) 4 Bro PC 470; Law of Marine Insurance (2ndedn) 2006- Howard Bennett, Pg-528. 51 Hammond v Ried (1820) 4 B &Ald 72; MIA 1906, Sch 1 , R 6. 52 MIA 1906, S.46 (3) 53 MIA 1906, S.46 (1)

insurance, unless it be the voluntary act of those who have the management of the ship.54 Unreasonable delay in conducting the voyage insured might result in the termination of the policy in the same way as in the case of change of voyage and deviation. S.48 requires the adventure to be prosecuted with reasonable dispatch. Whether this prosecution is with reasonable dispatch is a question of fact.55And reasonableness is to be determined not by any positive and arbitrary rule, but by the state of things existing at the time at the port where the ship happens to be 56- Phillips v. Irving. If without lawful excuse the insured adventure is not prosecuted, the insurer is discharged from liability as from the time when the delay became unreasonable.57 Delay is considered to be reasonable if it was a result, to obtain a permit from authorities 58 or shortage of tonnage in wartime and more importantly the delay should be to promote the insured voyage.59 Deviation and delay are considered to be grounds for termination of the policy and it could be excused in certain circumstances; by referring to s.46 and s.48 it is clear that in deviation the departure without lawful excuse and in delay prosecution of adventure without reasonable dispatch might bring the policy to an end (ICC cl 18 avoidance of delay is a reflection of this section) S.49 deals with excuses for deviation or delay (discussed in chapter -4) .The assured will not lose cover in cases where deviation or delay was due to necessity.

54 55

Scott v Thompson (1805) 1 B & P NR 181, 186 per Sir James Mansfield CJ. S.88 MIA 1906; Bain v Cove (1829) 3 Car & P 496. 56 Philips v.Irving [1844] 7 Man & G 325 at 328 Per Tindal CJ 57 S.48 MIA 1906., 58 British- American Tobacco Co Ltd v. HG Poland (1921) 7 Lloyds law Rep 108. 59 Niger Co Ltd v. Guardian Assurance Co (1922) 13 Ll law Rep 75; Law of marine insurance- Howard Bennett (1996) pg 530.

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Chapter-2 Held covered clauses & ICC 2009 Held covered clauses; The held covered clauses came into existence in the late nineteenth century.60 These clauses protect the assured by extending the cover within the limits of the cover agreed and it works on the, discretionary right to demand an additional premium and/or amended terms of the cover.61 The whole object of the clause is to keep the underwriter on risk, notwithstanding that, in the absence of the clause, he would be discharged from liability or the risk would fall outside the policy.62 The departure from the insured adventure agreed to be protected by h/c clause should be viewed strictly in conjunction with the wording of the clause invoked. The institute cargo clauses (a) (b) (c) ICC (examples of h/c clauses)An example of clauses which lessen the doctrine of alteration of risk include ICC (A), (B), (C) Cl 8,9 & 10 and they should be considered together. Cl 8.3 states this insurance shall remain in force (subject to termination as provided for in clauses 8.1.1 to 8.1.4 and to the provisions cl 9 below) during delay beyond the control of the assured, any deviation, forced discharge, reshipment or transhipment and during any variation of the adventure arising from the exercise of a liberty granted to carriers under the contract of carriage Under the Institute cargo clauses 1/1/09, the risk attaches the moment goods are first moved in the warehouse or at the place of storage (at a place named in the contract of insurance) for the purpose of immediate loading into or unto the carrying vehicle or other conveyance for the commencement of transit and this means the cover begins from the time its shelf to unloading.63 And terminates (Cl 8.1.1) on completion of unloading from the carrying vehicle or other conveyance in or at the final warehouse or place of storage at the destination named in the contract of insurance, (same effect as 82 clause).
60 61

Held covered clauses in marine insurance- Prof. Rhidian Thomas. Pg -1. Ibid Pg -2; Bennett, The law of marine insurance (2006,OUP,Oxford) pp,308-316; 62 Liberian Insurance Agency Inc. v. Mosse(1977) 2 Ll Rep. 560,567; Per Donaldson J. 63 Insuring cargoes in the new millennium: The Institute Cargo clauses 2009 by John Dunt and William Melbourne, Pg 120.

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(cl 8.1.2) on completion of unloading from the carrying vehicle or other conveyance in or at any other warehouse or place of storage, whether prior to or at the destination named in the contract of insurance, which the assured or their employees elect to use either for storage other than in the ordinary course of transit or for allocation or distribution, or (cl 8.1.3)-when the assured or their employees elect to use any carrying vehicle or other conveyance or any container for storage other than in the ordinary course of transit, (these clauses refer to the election to store in warehouses and also to store in vehicles or in containers other than in the ordinary course of transit). (cl 8.1.4) on the expiry of 60days after completion of discharge over side of the subjectmatter insured from the oversea vessel at the final port of discharge, whichever shall first occur64 (Termination of cover, on expiry of 60 days after discharge from the vessel). This revision in cl.8 provides wider cover i.e. policy covers any loss incurred within the warehouse if stored for immediate loading for commencing the contemplated transit. However, The policy does not attach if the adventure insured is for carriage by a named vessel and the goods are never appropriated by a contract of carriage to that insured voyage but are shipped by some other vessel. 65The insurance will cease to exist if the goods remain in the carrying vehicle and the assured or its employees elect to use it for storage other than ordinary course of transit. And this transit should be pursued with reasonable dispatch stipulated in s.48 and cl.18 of ICC. According to cl.9, it would be considered prudent for an assured to inform the insurers in the happening of a serious casualty or possible delay, instead of waiting till the notice of termination is received and under the prompt notice referred to in this clause the insurers are entitled to charge an additional premium but under clause 10.1 referred below, the same term refers to reasonable market rate and reasonable market terms. There is a difference in the approach of these two clauses but the similarity is in the fact that they deal with change of circumstances once the insurance is attached under cl 8.

64 65

Institute cargo clauses 2009 Arnoulds law of marine insurance and average- (first supplement to the 17thedn by Jonathan Gilman QC, Professor Robert Merkin ) Pg 83; The prestrioka;

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ICC cl -10.166 once the destination is changed after the attachment of this insurance, the assured should provide prompt notice to the insurer so that rates and terms could be agreed at. But if the loss occurs prior to such agreements, the cover could be obtained only if it is available on reasonable commercial market rates on reasonable market terms67. This part of the clause covers held covered provision. But after the revision of this clause in 2009, usage of the term held covered have been avoided because of misunderstandings related to the ambit of the term as it was misconstrued as guaranteed cover even in situations where cover was not available on reasonable commercial market rates.68 The revision made the clause understandable for the assured with no knowledge about the operation of held covered clause and MIA 1906. It explains the ambit of the additional cover available i.e. whenever such cover was commercially available in market and this avoids the misconception of treating the held covered as guaranteed cover, even in situations where cover is not available at reasonable commercial market rate; the clause also stipulates the results where loss occur before the rates have been agreed for the continuation of cover. The assured seeking the benefit of the clause must give prompt notice to underwriters of his claim to be held covered as soon as he learns of the facts which render it necessary for him to rely upon the clause and clause only applies if the premium to be arranged would be such as could properly be described as a reasonable commercial rate.69 Clause 10.2 of ICC solves the Phantom ship70 problem and accordingly where the subject matter insured commences the transit contemplated by this insurance (accordance with cl 8.1), but, without the knowledge of the assured or their employees

66

ICC 2009 Cl. 10.1 Where after attachment of this insurance, the destination is changed by the assured, this must be notified promptly to insurers for rates and terms to be agreed. Should a loss occur prior to such agreement being obtained cover may be provided but only if cover would have been available at a reasonable commercial market rate on reasonable market terms. 67 Clause 10.1 (voluntary change of voyage) ICC 2009; Held covered clauses in marine insurance- Prof. Rhidian Thomas. Pg -131. 68 Liberian Insurance agency v. Mosse [1977] 2 Lloyds Rep 560 per Donaldson J at p.568. 69 Liberian Insurance Agency Inc v Mosse (1977) 2 Ll Rep 560 per Donaldson J 70 A phantom vessel is a ship with no traceable registration, controlled by fraudsters and used to steal cargoes- Bennett, para. 18.12, fn.17

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the ship sails for another destination, this insurance will nevertheless be deemed to have attached at the commencement of such transit. This provision came to being after The Prestrioka. In this case S.44 was applied and the assured could not get cover for the theft of their cargo. The ground on which they were rejected cover was that the risk never attached (did not embark upon the insured voyage); hence the warehouse to warehouse cover (transit clause) could not be relied. It was decided that the transit clause did not displace or avoid s.44. The transit clause is an example of the extension of a marine insurance policy to a land risk incidental to the sea voyage as permitted by s.2 of MIA and it does not alter the fundamental nature of the marine insurance policy. The clause operates on the assumption that marine adventure takes place and if that adventure is never embarked upon, the insurer will not be liable under s.44. (cl 10.2) wording This insurance will nevertheless be deemed to have attached will operate to cancel the effect of s.44. Now if the vessel sails for another destination than the one prescribed in the policy the risk will attach under cl 8.1 of the transit clause. But this is conditional to the fact that the vessel should sail for such other destination without the knowledge of the assured or their employees. Furthermore, in Institute war clauses (cargo) cl 6, Institute strike clauses (cargo) cl 7 the change in voyage is held covered provided certain conditions are accomplished. Other examples of h/c clauses include change of voyage clause IVCH 83 & 95 -Cl.2 Held covered in case of deviation or change of voyage or any breach of warranty as to towage or salvage services, provided notice be given to the underwriters immediately after receipt of advices and any amended terms of cover and any additional premium required by them be agreed. ITCH 83 & 95- Cl.3 Held covered in case of any breach of warranty as of cargo, trade, locality, towage, salvage services or date of sailing,

provided notice be given to the underwriters immediately after receipt of advices and any amended terms of cover and any additional premium required by them be agreed Practicality-The insurer will indemnify the assured only to the extent specified in the policy. Even the policy which covers all risks is not what it appears to be on its

14

face.71Firstly, the risk undertaken by the insurer would be limited to the subject matter of the insurance, say ship, cargo, freight or any other interest. In Overseas Commodities Ltd v. Style72the cargo did not bear the markings which formed the part of the subject matter insured and as a result h/c clause which was incorporated in the cargo policy ceased to operate. It was held that the assured could not correct the wrong marking and considered this a sufficiently valid reason for not applying the clause 73and this was also upheld in Hood v. West End Motor Car Parking Co.74 Furthermore, the subject matter insured should be stated in the policy with reasonable certainty75 and the construction of the words must be in conjunction with MIA, trade, market usage and more importantly the intention of parties76. Secondly, the insurer would indemnify the assured only against risks that are insured and in order to recover, the loss should be caused by an insured peril and it should also appropriate a test of causation. If it is not an insured loss, there is no right of recovery under the policy. 77But a well constructed h/c clause may safeguard the limitations of the policy. In Greenock Steamship Co. Ltd v. Maritime insurance Co.Ltd78 the clause stated, held covered in case of.....unprovided incidental risk...at a premium to be hereafter arranged the effect of the clause was an issue and it enabled the assured to get additional cover for incidental risk not stipulated in the policy. Incidental is construed in a restricted sense and would not cover risks which are wholly independent. But it would cover risks which are incidental to the risks already covered under the policy79. In this case the held clause was to apply even when the matter for which the ship was held covered wasnt discovered until the loss occurred and the additional premium the insurer would demand has to be calculated as if the

71

British and foreign Marine insurance Co. v. Grant ( 1921) 2 A.C.41; Held covered clauses in marine insurance- Prof. Rhidian Thomas (vol.2) pg 13. 72 (1958) 1 Lloyds Rep .546. 73 Overseas Commodities Ltd v. Style (1958) 1 Ll Rep .546; ; Held covered clauses in marine insurance- Prof. Rhidian Thomas pg 14; 74 Hood v. West End Motor Car Parking Co (1916) 2 K.B. 395 (CA); In this case goods which were not intended to be covered by the policy were shipped. 75 S. 26(1) MIA 1906. 76 MIA 1906, First schedule , Rules for construction of policy, rules 15-17, S.26(3-4). 77 MIA 1906, s.55 (1). 78 (1903) 1 K.B. 367. 79 Held covered clauses in marine insurance- Prof. Rhidian Thomas (vol.2) pg 15.

15

parties had known of the deviation at the time that it happened. 80 Thirdly, Risks of maritime nature could be underwritten in time or voyage basis or may be a combination of both.81 In present times, policies in voyage basis are more in cargo insurance, and in case of hull and machinery insurance voyage-based risk are taken only in particular circumstances. S.42-49 of MIA deals with the voyage and the effect of these provisions is to define the risk taken up by the underwriter when the policy is on voyage basis. In a voyage policy, place of departure and destination are stipulated and the voyage should be pursued with reasonable dispatch throughout without delay, deviation unless they are excused. If the actual voyage performed is not according to the policy then the underwriter would not be liable. Fourthly, risks underwritten in time basis; in time policy the insurer takes up the risk for a specific period of time. Earlier it was twelve months and now it depends upon the contract; and the time from which cover commences and terminates is dependent on the construction of words in the policy. Only loss falling within insured period is covered i.e. pre- or post-date losses will not be covered. Sometimes the attachment of cover depends on assureds duty of utmost good faith in case of ante-dating of the cover. And when ship is at sea when policy ends there should be h/c continuation clause to give extended cover. ITC (Hulls) cl 2 provides for h/c in such situations. This h/c clause would apply, if at the time of the termination of policy the vessel insured is at sea and in distress or at port and in distress; Furthermore, notice should be served by the assured before the expiry of the original cover and pro-rata monthly premium should be paid too.82 Time policies are common in hull and machinery insurance and also in mutual cover provided by P & I clubs.83 Fifthly, the insurance has territorial limits and its connection with additional cover is such that by the payment of additional premium and after giving notice the vessel insured can move out of the territorial limits (eg: Institute war and strikes clause (cl 6) 84) and Finally the subject matter in risk insured might have certain specific ways through which they should be
80 81

(1903) 1 K.B. 367; Law of marine insurance by Susan Hodges p.62(1996) S.25(1) MIA 1906. 82 Held covered clauses in marine insurance- Prof. Rhidian Thomas (vol.2) pg 20. 83 The insurance runs for 12months from noon GMT on 20th February. 84 Held covered subject to prompt notice and a premium to be arranged, in the event of the named storage vessel proceeding outside the limits of the area specified in this insurance

16

employed and it would be contemplated in the policy if the assured employs it in a contradicting manner there wont be any cover. But again this could be tackled with the help of a h/c clause ( eg: Institute clauses hulls cl 1.4). Notice Under h/c clause due notice must be given by the assured on receipt of advice of a deviation. In Mentz, Decker & Co v. Maritime insurance Co 85 Question arose as to whether a notice given after the loss was effective and following the Greenock steamship Co v. Maritime insurance, the court held that notice given by the assured, though given after loss, was sufficient to satisfy the terms of the clause. It was opined that delay should not prevent the assured from recovering under the policy if nothing practical could be done on receipt of the notice.86Moreover it is an implied term of the provision that reasonable notice should be given that it is not competent to the assured to wait as long as he pleases before he gives notice and settles with the underwriter what extra premium can be agreed upon- Thames and Mersey Marine Insurance Co v. Van Laun.87 But under IVCH(83) the term reasonable notice has no implication and rather immediately stipulated in cl 2 applies and it demands urgency than reasonable time . Hence once the assured is aware of the happening of the event he will have to give the notice to the insurer. Additional premium-The insurer can demand an additional premium for the additional cover he provides through h/c clauses. The underwriter by adding h/c clauses extends the purview of the cover and accepts additional risk by accepting additional premium, here understanding the wording of the clause against which h/c clause provides cover is important as the extended cover depends on it. Therefore a clause which covers change of voyage and deviation will not operate where the risk never attaches.88Depending on the construction of the clause, it could be understood whether there is a conditional obligation to the assured, with additional premium payable only when it is demanded by,

85 86

(1910) 1 KB 132 Ibid per Hamilton J pg 135. 87 (1917) 23 Com Cas 104 at p 109,HL per Lord Halsbury LC 88 Wooldridge v. Boydell (1778) 1 Doughl 17; Simon Israel & Co v. Sedgwick [1893] 1 Q B 303; Maritime Insurance Co. v. Stearns [1901] 2 K B 912; Bennett, The law of marine insurance (1996,OUP,Oxford) pg 558.

17

the insurers89; and in such cases the phrase if required would be used. 90 However, some clauses are drafted in a way which makes it obligatory for the assured to pay additional premium and this depends on the construction of the words implied in the clause. Furthermore, h/c clauses show that insurers can either accept or reject the premium depending upon the risk they have to cover but courts would require strict language before recognizing that the underwriters had lost their right of election. 91At times the additional premium paid to the insurer would be more than the indemnity assured seeks to recover; in Greenock steamship Co v. Maritime Insurance Co Ltd the vessel was unseaworthy (inadequate fuel) and in order to avoid danger, master burned the ships fittings, spars and cargo which resulted in a general average sacrifice which the insurance covered on the happening of breach of warranty; and the court in this case holds the opinion that the parties must assume that the breach was known to the parties at the time it happened, and must ascertain what premium it would then have been reasonable to charge92 here the breach was not discovered until the loss occurred. Accordingly the insurer would reasonably charge the parties a premium worth the value of the sacrifice and an additional premium for the increased risk of the loss of vessel. Furthermore, the insurer is expected to charge reasonable additional premium depending on the extra risk undertaken and may not amend the terms of the cover unreasonably for his benefit under h/c clause. Utmost Good Faith A condition precedent to the application of the clause93 and to

obtain the protection of held covered clause, the assured must act with the utmost good faith towards the underwriters, this being an obligation which rests upon them throughout the currency of the policy.94However, this duty is limited to the prudent underwriters assumption in extending the cover under the clause.

89 90

The term Insurers replaced the term underwriters in clause 9 of ICC 2009. Examples: Institute cargo clauses (A), (B) and (C), Clause 9. 91 Held covered clauses in marine insurance- Prof. Rhidian Thomas. Pg -38. 92 Per Bingham J. (1903) 1KB 367 at 375; 93 (1977) 2 Ll Rep 560 per Donaldson J at 567 94 Overseas Commodities Ltd v Style (1958) 1 Ll Rep 546,559 Per McNair J

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Chapter-3 Deviation in contracts of Carriage

Deviation from the Latin word De via, from the way, has two significant meanings (1) wandering from the way of course or the act of turning aside (English concept mostly confined to this) and (2) is to err or transgress (U.S concept). 95 If the ship deviates, the entire bill of lading is invalidated, and the warranty that the goods will reach at the destination securely on time, is substituted. The carrier by making variation in the risk releases the underwriter. This invalidity of the contract makes the carrier a common carrier (carrier becomes insurers). Unreasonable delay, in performing the contract is deviation as it increases the risk of the voyage but the delay should be such as to substitute an entirely different voyage for that contemplated by the bill of lading96 Usually, the shipowner undertakes that the vessel will pursue the route contracted for the performance of the contract; any intentional and unreasonable change in the geographic route of the voyage contracted97 would amount to deviation. To find

whether a deviation has occurred, the precise route envisaged in the contract of affreightment should be ascertained. In common law the shipowner is under an obligation to follow the usual and customary course. 98 And this route is presumed to be the direct geographical route between the port of loading and discharge99 and the direct geographical route or customary route should be followed in the absence of an express provision in the charterparty. Direct geographical route should be followed, but the shipowner can prove that a different route is the customary one;
100

the voyage pursued

could vary for navigational reasons, such as, the necessity to avoid harsh weather conditions or the draught restrictions for a particular vessel. The departure for bunkering is justified101 and so is call at intermediate ports by vessels operating in liner trade; however, if a vessel deviates from the route because of negligence, it will not be a
95 96

11 JILE 147 (1976-77) Deviation in the law of Shipping- U.S, U.K. and Australia a comparative study. Brandt v Liverpool S.N.Co (1924) 1 K.B. 575 Per Atkin LJ at 661 97 Tetley p 1812. 98 Davis v. Garratt (1830) 6 Bing 716,725; 99 Reardon Smith Line v. Black sea and Baltic general Insurance (1939) 64 Ll LR 229 per Lord Porter 100 Ibid; Achille Lauro Fu Gioacchino & Co v. Total Societa Italiana Per Azioni (1969) 2 Ll LR 65, 67-668 ( Lord Denning MR) 101 Ibid 101

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deviation and the shipowner will be able to raise the defence of negligence in navigation102.The performance of the contracted voyage via the direct geographical route between two ports is expected; and in order to avoid such an obligation, contracts of carriage may include clauses to allow other routes other than the direct geographical route. example: Clause 5 of Conebill 2000. Departure from direct route for navigational reasons -vessels do not pursue the exact direct route in practice and are required to follow only the ordinary sea track of such a voyage according to a reasonable construction of that term.103 The precise route may differ for navigational purposes i.e. to avoid hurricanes or ice or to avail favourable weather conditions. And such departure would not fall under departure from usual and customary route.104 Departure for bunkering purpose -Some voyages do have this feature. If calling at ports for bunkering purpose is a usual practice (provided the bill of lading is consistent with it) for the vessels in a particular trade or line, then calling at those ports for bunkering during the course of the voyage will not be deviation and departure of this kind would be considered as part of usual and customary route105. Justifiable deviation (a) common law (b) hague visby rules (a) Common law permits deviation from direct route in few circumstances and they are: Saving human life or to communicate with a vessel in distress - deviating to assist and save human life on seas doesnt invalidate the contract rather it is considered as a moral duty. Deviation for the purpose of saving life is protected and involves neither forfeiture of insurance nor liability to the goods owner in respect of loss which would otherwise be within the exceptions of peril of the seas. And as a necessary consequence of the forgoing, deviation for the purpose of communicating with a ship in

102 103

(1939) 64 Ll LR 229 ;Hague-Visby Rules Leduc v. Ward (1888) 20 Q.B.D 475,481 per Lord Esher 104 Morrison v. Shaw Savill (1916) 2 K.B 783,797 per , Phillimore L.J; also cited in Reardon Smith v. Black sea Insurance per Lord wright 105 Voyage charters (Lloyds shipping law library) chapter 12,pg 236; (1888) 20 Q.B.D 475; (1916) 2 K.B 783.

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distress is allowed, in as much as the state of the vessel in distress may involve danger to life. However deviation for the sole purpose of saving property is not thus privileged, but entails all the usual consequences of deviation. If therefore, the lives of the persons on board of a disabled ship can be saved without saving the ship, as by taking them off, deviation for the purpose of saving the ship will carry with it all the consequences of an unauthorised deviation.106 In this leading case, the vessel not only deviated to save the crew but also tried to earn salvage. And whilst towing she was lost and grounded with all her cargo. Such a deviation was held unjustifiable and the charterers (claimants) could recover the value from the shipowners(defendants). Thus it is established in common law that deviation for saving life is justified but not saving property. However in cases where there is more than one reason to deviate, the court should look into the primary motive and check whether such motive is to save life or to save property. Furthermore, there is a statutory duty prevalent in several countries, which obligates saving life at sea principally during distress. An example of the same is S-93 of Merchant Shipping Act 1995. This obligation is applicable to masters of UK ships and on the masters of foreign ships when in UK waters and the breach of this obligation would result in summary conviction, imprisonment for a term not exceeding six months or a fine not exceeding the statutory minimum,or both. 107However, this obligation applies only in territorial waters and not in high seas. Avoiding danger to ship or cargo; The danger to ship or cargo should be of a reasonable permanent nature. The master of the ship may deviate justifiably if the safety of the ship and its cargo is at jeopardy. In The Teutonia108, war broke out and the master deviated to make inquiries. It was held that the whole situation should be taken into account to understand whether or not deviation is in fact justified and it could be even obligatory in certain situations and hence justified. The Anastasia109- it was held that disobeying the orders of a charterer where the master knew that following it would
106 107 108 109

Scaramanga v. Stamp (1880) 5 CPD 295 (CA), 304.per Cockburn CJ. S.93(6) of The Merchant shipping Act 1995. Duncan v. Koster ( The Teutonia) (1872) LR 4 PC 171 The Anastasia (1971) 1 Ll Rep 375

21

result in danger to the vessel would not amount to an unlawful deviation and the master has a duty to exercise his own judgement and she should not perform his duties merely at the whim and dictat of the vessels owner or charterer (apprehension of peril not justified in MI). In Kish v Taylor, the vessel was overloaded with deck cargo which made it unseaworthy and she deviated from her contracted route to a port for repairs. It was decided that deviation would be justified although it resulted from initial

unseaworthiness for according to them justification should be given to the existence of a danger and not in its cause (U.S courts contradictory view- held that deviation not to be justified where the shipowner was aware of the unseaworthy condition of the vessel before it sailed110). However compensation in the form of damages would be available for any loss including delay resulting from the initial unseaworthiness 111. The rationale followed is that, it is the peril and not its cause which determines the character of the deviation. On the same, Carver112 and Payne & Ivamy113 are of the view that if/when the ship becomes unseaworthy, and once the shipowner know of the vessels poor state on sailing, the master must not be forced to choose between risking the life and property concerned and changing courses to maximize safety. Furthermore, Carver114 views, that if the safety of the adventure requires the master to go out of course, then he is not only justified in doing so, but it might become his duty in performance of the contract made with the owners of the cargo. However, there is uncertainty in law regarding situations where the risk is to cargo alone. If the continuation of voyage would result in substantial damage to the cargo, the master might be under a duty to deviate to protect the interests of the cargo owners- The Rona (No 2)115 and it was also decided in this case that seaworthiness must exist at the commencement of the voyage and it is not a breach of condition of seaworthiness if the ship later falls below standard. Similarly if essential repairs require deviation, the

110 111

The Louise (1945) AMC 363 (1912) AC at pp 618-619 112 3 Carver, British Shipping Laws 601 (2 ed. 1963) 113 L. Payne and E.Ivamy, Carriage of goods by sea 19,29 (1972) 114 3 Carver, British Shipping Laws 598 (2 ed. 1963) 115 The Rona (No 2) (1884) 51 LT 28

22

particular route pursued may be acceptable even though only cargo interests are protected by the new route taken- Phelps v. Hill.116 But the chaos is in cases where the apprehended damage is slight or effects only part of the cargo, the popular view is that in such cases there is no requirement for a master to deviate for the sole purpose of saving a part of cargo.117 Moreover, such deviation being justified depends upon the comparison between the gravity of the danger and the inconvenience and expense of taking the avoiding action118.Again the ship could be taken into port to discharge dangerous cargo if it was loaded by the charterer without the knowledge of the shipowner. And if the charterer has breached the contractual duty to load full cargo, the master may duly be permitted to deviate to acquire more cargo119. (b) Under the Hague and Hague- Visby Rules The Hague/Visby Rules(Art IV rule 4)120 states deviation in saving or attempting to save property at sea and any reasonable deviation. The purpose is to protect the shipowners by adding deviations to save property and reasonable deviations to the existing list of deviations which are justifiable at common law.121 Any reasonable deviation.... referred herein depends on the facts in each case. In Stag Line v Foscolo, Mango & Co122, the vessel deviated to land two engineers who were taken on board for testing the fuel-saving apparatus. On leaving that port she stranded and cargo was lost. The deviation was not considered as reasonable by the House of Lords and the shipowner couldnt rely on the Hague rules protection. The question raised was whether a deviation could be reasonable if it was not in the interests of both ship and cargo and Per Lord Atkin- the true test seems to be what departure from the contract voyage might a prudent person controlling the voyage at the time make and maintain, having in mind all the relevant circumstances existing at the time, including the terms of the contract and the interests of all parties concerned, but without obligation to consider the interests of anyone as conclusive
116 117

Phelps v. Hill (1891) 1 QB 605 Notara v. Henderson (1870) LR 5 QB 346. 118 Wilson-P 19 119 Wallem v. Muller (1927) 2 K.B 99; Wilson- P 19 120 The Hague Rules are identical on this point. 121 Wilson- p 208. 122 (1932) AC 328

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There is Uncertainty regarding relation between express liberties to deviate contained in the contract of carriage and the provisions of Art IV rule 4. The courts considering those liberties to be reasonable within the meaning of art iv depends on the facts; and If those liberties do not fall within reasonable deviation in Art iv then they might fall under Art iii r- 8 which renders void any clauses which derogates from the protection offered by the rules. However the popular view which avoids such conflict is that, the object of the rules is to define, not the scope of the contract of service, but the terms on which that service is to be performed.123 Liberty Clauses Deviation from the contracted route would be justified by inserting express clauses known as liberty/ deviation clauses. Through these clauses the shipowners expand their right to deviate and to call at any port during the course of the voyage without being questioned about its reasonability. Here the shipowners come to an agreement with shippers, which grants them express liberty to deviate by inserting the liberty clause124. Paradoxically, it may so happen that such a liberty clause may limit the common law rights of the master to deviate if the provisions give the vessel an express right to deviate in situations not under the cover of the deviation in question and in such circumstances the shipowner may be estopped from relying on his implied right at common law to deviate on the principle expressum facit cessare taciturn i.e. a liberty which is in conflict with an expressed liberty will not be implied125. Nevertheless in present times almost all liberty clauses are worded in such a way as to include almost all kinds of deviation. In Leduc v. Ward126 the Bill of lading gave Liberty to call at any port in any order and to deviate for the purpose of saving life or property. The vessel deviated for the shipowners private business and was lost in a storm. The court held that the shipowner was liable because the clause merely gave right to call at any ports in the ordinary course of voyage. But the twist in inserting such a liberty clause is that it should be in rhythm with the voyage contemplated. The liberty to
123 124 125 126

Renton v Palmyra (1956) 1 QB 462 at p 510; Stag Line v Foscolo, Mango & Co (1932) AC 328 ; 11 JILE 147 (1976-77) Deviation in the law of Shipping- U.S, U.K. and Australia a comparative study. 3 Carver, British Shipping Laws at 602; United States Shipping Board v. Bunge y Born (1925) T.L.R. 174. (1888) 2. Q.B. 475

24

deviate and the described voyage must be read together and reconciled, and that a liberty, however generally worded, could not frustrate but must be subordinate to the described voyage.127 For example: Glynn v. Margeston & Co128, a case where liberty clause overlapped with that of the voyage contemplated. The clause suggested the liberty to proceed to and stay at any port or ports in any rotation. The cargo damaged because of the delay caused by deviation which was duly allowed as per the liberty clause. But by focussing on the conflict between general printed conditions (liberty clause) and special conditions, the court upheld that the shipowners were liable for the decayed cargo as it happened as a consequence to the delay and stated that, the general words must be limited so that they shall be consistent with and shall not defeat the main object of the contracting parties.129 Here the confusion was in the words in any rotation and in Leduc v Ward the words were in any order or any rotation and it was held that vessel may take only those ports which are substantially on the course of the voyage- Lord Esher. However, this effect of following the geographical routing could be cancelled if the clause gives clear direction as to the route to be followed. In Connolly Shaw Ltd v. A/S Det Nordenfjeldske D/S130, the carriage contract was to carry lemons from Palermo to London. The vessel went to other ports and then steamed for London. The liberty clause allowed to call at any port or ports, whether beyond the route of the port of delivery or not, which she could call at in the course of her voyage without frustrating the object of the voyage namely the safe carriage of a perishable cargo.131 This means the ship could go wherever she pleased but the purpose of the contract should not be frustrated. The cargo of Lemons did reach London in good condition but their price fell by the time the vessel reached London and this frustrated the contract.

127
128

Frenkel v MacAndrews & Co Ltd (1929) AC 545 per Viscount Sumner. (1893) AC 351 (HL). 129 (1893) AC 351 (HL) Per Fry L.J; (1934) 39 Com. Cas. 259, 268 Per Scrutton L.J, To call at any ports in any order whether in or out of the route should be limited by the purpose of the contract 130 (1934) 49 Ll LR 183 131 Connolly Shaw Ltd v.A/S Det Nordenfjeldske D/S (1934) 49 Ll LR 183 Per Branson J

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No two charterparties or bills of lading are the same; the liberty clause could be worded in any way as to make provision for any number of eventualities, including the possibility of strikes.132 In GH Renton & Co Ltd v. Palmyra Trading Corp of Panama (the Caspiana)133 the bill of lading stated, carriage to London or Hull so near thereunto as the vessel may safely get. The direct route was not stipulated. Strikes broke out in both London and Hull; so the shipowners ordered the vessel to proceed to Hamburg and discharge the cargo. The plaintiffs (the endorsees of Bill of Lading) claimed damages for breach of contract. Here the liberty clause was applicable and operative only during emergencies and the court found no conflict between the main object of the contract and liberty clause. The bill of lading stated to London or Hull and it did not specify the direct contractual route. Moreover, the liberty clause would operate only with the occurrence of epidemics, quarantine, ice, labour troubles, strikes, or lockouts such that would prevent the ship from leaving the loading port or reaching the discharge port but discharging the cargo in such situation at the port of loading or any other safe or convenient port was questionable. The court distinguished this clause from Glynn case by holding that there is a material difference between a deviation clause purporting to enable the shipowner to delay indefinitely the performance of the contract voyage simply because they choose to do so as, in Glynn and provisions-such as those contained in Renton which are applicable and operative only in the event of the occurrence of certain specified emergencies.134 It was also elucidated that, in Glynn the material difference was such that the master had the right to nullify the contract at will, but whereas in Renton, the clause stated that the rights and obligations of the parties in the event of obstacles arising beyond their control, which would impede the contract and only then would the shipowner be freed from liability by the clause. In Leduc, Glynn and Renton the court stressed on the main purpose of the contract than the liberty clause but in Connolly the liberty clause was given importance and thus the ship could go wherever she pleased but the purpose of the contract should not be frustrated. If this approach is
132 133 134

Stephen Girvin Carriage of goods by sea; Chapter -24 , Pg 315. (1956) 1 QB 462 (CA) (1955) 2 Lloyds List L.R 742, Per Jenkins L.J

26

not followed shipowners may well be able to nullify the contract at will.135And while interpreting liberty clauses the court will take account of the nature of the trade in which the vessel is known to be engaged.136 In Theiss v. Australian Steamships,137 a specific liberty to bunker was included. This does not confer any right to take on bunkers which were not necessary for the subject voyage and a deviation wouldnt be reasonable within the meaning of Art IV, Rule 4 HVR. The liberty clause should be read in conscience with the basic contract and the trade practices as well. The liberty to deviate for other purposes, held to be restricted to purposes connected with the contracted voyage138. Effects of Deviation The unjustifiable deviation from the usual and customary route has been traditionally regarded as fundamental breach of the contract of affreightment at common law. It is considered as an implied undertaking and not a warranty as in marine insurance (discussed below in the light of Thorley v. Orchis). If a vessel deviates from the contracted course, the shipowner becomes liable for the delay and would be taken responsible for any damage or loss that happens to the goods resulting from such delay, unless the owner of goods have waived the deviation. The cargo owner after knowing about the deviation may elect to treat the contract as subsisting and once the contracted is treated as affirmed the cargo owner is entitled to damages for the loss caused by such deviation. It was held in Hain S.S Co v. Tate & Lyle139 that an obligation not to deviate is a contract condition and the breach of such a condition entitles the goods owner, if he so desires to treat the contract as repudiated. The shipowner wouldnt be protected by the exceptions in bills of lading; will have to carry the goods as a common carrier and would most definitely be liable for the damage and loss resulted by delay/deviation. For exemption, he will have to prove that such loss or damage was occasioned by either an

135 136 137 138 139

W. Poor, Charter Parties and Ocean Bills of Lading 195-207 (1968) ; ibid per Jenkins L.J Hadji v. Anglo- Arabian (1906) 11 Com. Cas. 219. (1955) 1 Ll Rep. 459 Stag Line v. Foscolo, Mango (1932) A.C. 328 (1934) 39 Com Cas 259 Per Scrutton L.J

27

act of God, by Kings enemies or by inherent vice of the goods and the loss would have equally happened even had the ship not deviated.140 Firstly, an unjustified deviation would lead to damages in favour of the aggrieved party. In Heron II141 the ship had to load sugar and proceed in full speed to the port of discharge. But there was a delay as the vessel called at several ports en route to the port of discharge. During this period, price of sugar fell. The delay was admitted to be in breach of charterparty even though the shipowners did not know that the appellants had an intention to sell off the sugar as soon as it arrived. It was decided that the shipowners ought to have foreseen that such delay would possibly result in the price fall of sugar and they awarded damages. The difference between the price the cargo of sugar ought to have fetched if it had arrived on time and the price which it in fact fetched was awarded as damages. Secondly, Deviation might result in displacement of contract. The moment the vessel departs from her contracted route, the shipowner loses the benefit of clauses which exempts from liability. In James Morrison v Shaw, Savill & Albion 142 the vessel deviated to deliver other cargo and during the act of deviating she was sunk by enemy submarine in World War I and the shipowner couldnt rely on kings enemies. In Joseph Thorley Ltd v. Orchis Steamship Co Ltd143, a conract to carry beans from Limassol to London. The beans were damaged during unloading. The shipowners relied on the exception clause which exempted them from liability or loss arising fromAny act,

neglect or default whatsoever of the pilot, master, officers, engineers, crew, stevedores, servants, or agents of the owners, in the management, loading, stowing, discharging or navigation of the ship or otherwise. On knowing that the vessel had deviated from the proper route the plaintiffs pleaded deviation. It was held that shipowner couldnt rely on exception as a deviation is such a serious matter and changes the contemplated voyage so essentially that a shipowner guilty of deviation cannot be considered as having
140 141 142 143

11 JILE 147 (1976-77) Deviation in the law of Shipping- U.S, U.K. and Australia a comparative study Koufos v. C Czarnikow Ltd (The Heron II) (1969) 1 AC 350. (1916) 1 K.B 783 Joseph Thorley Ltd v. Orchis S.S. Co.(1907) 1 K.B 660 (CA)

28

performed his part of the bill of lading, but something fundamentally different. He therefore cannot claim the benefit of stipulations in his favour contained in Bill of lading144 Furthermore, it was reasoned: like marine insurance contracts, deviation altered the risk in a serious manner that the agreed terms of contract could not be applied to the deviating voyage. The principle would be that, the undertaking not to deviate has the effect of a condition, or a warranty in the sense in which the word is used in speaking of the warranty of seaworthiness, and, if that condition is not complied with, the failure to comply with it displaces the contract. It goes to the route of the contract and the shipowner cannot set up the exception clause in the bill of lading contract, which only exists for his benefit. If he has not performed a condition precedent upon which his right to rely on that contract depends- Lord Collins MR. This simply means that once there is deviation. The contract is displaced and the shipowner will not be able to rely on exemption clauses which are in his favour, including the exceptions in HVR art iv145 wherever applies. Thus the shipowner becomes strictly liable for the loss incurred as he is put to the position of insurer. He will be held liable until the cargo-owner treats the contract as repudiated. But the cargo-owners claim for damages could be defeated if the shipowner invokes any of these defences: Act of God, the Queens enemies, inherent vice, defective packing or general average sacrifice. However these defences would be valid only for the shipowner who has performed his contract. If he has broken it by deviation they might fail146. But on the contrary if the shipowner proves that such a loss was likely to occur on the proper route as it did on the deviating one 147, he will succeed. Thirdly, an unjustified deviation may result in a discharge of contract by breach. In Hain Case, The vessel had to proceed to two ports but owing to a failure to communicate by the owners agents, the master was not informed of the nominated port; hence he proceeded to two other ports, loaded sugar and went to Queenstown and awaited further
144 145

(1907) 1 K.B 660 (CA) at 669 Per Moulton LJ Chorley & Giles- Shipping law (8th edn) 1988 at pp 276 146 International Guano v. MacAndrew & Co. (1909) 2 K.B 360. 147 Ibid 146

29

instructions. Shipowners and charterers found out the error and the master was asked to return to load the remaining cargo and after leaving the port, the vessel ran aground and part of cargo was lost and the remainder was transhipped on another vessel for completion of the voyage to the UK. Tate & Lyle took delivery of the cargo upon the endorsement of bills of lading covering the cargo without knowing about the deviation. It was held that deviation constituted fundamental breach of contract entitling the cargo owners to treat the contract as repudiated148 and the true view is that the departure from the voyage contracted is a breach by the shipowner of his contract, the breach of such a serious character that, however slight the deviation, the other party to the contract is entitled to treat it as going to the root of the contract, and to declare himself as no longer bound by any of the contract terms.- Lord Atkin. If this perspective is followed, then breach by deviation would not cancel the express contract, If not the shipowner, by his own wrong would be able to get rid of his own contract149. This makes the effects of unjustifiable deviation in Hain clearly different from those espoused in Joseph Thorley Ltd v. Orchis Steamship Co Ltd. In particular the innocent party would have an election as to whether he was to be bound by the contract. He could, if he desired, treat himself as no longer bound or he could elect to maintain the contract, reserving his right to damages.150 Furthermore, the effect remains the same even if the ship regains the contracted course after deviation. But in cases where the cargo is damaged by an excepted peril before deviation occurred then the carrier can rely on the exception clause. In Hain case it was held that the charterer can treat the contract as at an end as from the date of repudiation (i.e. from the moment of deviation) and with regard to the effect on freight it was decided that he will have to pay full freight if the cargo owner doesnt consider the contract as repudiated. However if the contract is treated as repudiated and goods reach the destination, reasonable freight would be payable on quantum meruit basis.

148 149 150

Stephen Girvin- Carriage of goods by sea, at 318; (1936) 55 Ll LR 159 (HL) (1936) 55 Ll LR 159 at 173-174. Ibid per Lord Wright.

30

The effects of waiver In the context of Hain case, the charterers were aware of the facts and elected to waive the breach i.e. affirmed the contract. Here the cargo owner can elect to treat the contract as subsisting; and if he does this with full knowledge of his rights, he must in accordance with the general law of contract be held bound 151 and in such situations when any claim is made by the charterers, the shipowners shall rely on the exception clause, including for peril of the sea for protection 152. In Hain case the bill of lading was endorsed to the claimants and it was decided that they were not bound by any waiver on the part of charterers and, for this reason, the shipowners were unable to rely on the bill of lading exceptions as a defence to any cargo claim brought by the consignees. Moreover, all parties were aware of the mistake in this case. The court held that, as the charterers without protest sent the vessel back to San Domingo, that very act shows that they have waived the deviation. The waiver in this case is like any other breach of a fundamental condition, which constitutes the repudiation of a contract by one party, i.e. the other party may elect not to treat the repudiation as being final, but to treat the contract as subsisting and to that extent may waive the breach with any right to damages being reserved.153 The applicability of this doctrine depends upon the affirmation of the contract by the goods owner and there must be acts by him which show that he intends to treat the contract as subsisting. 154 The waiver should be Unequivocal, definite, clear, cogent and complete.155 Waiver in Marine Insurance A similar view is followed in marine insurance when there is a breach of warranty. Prima facie breach of warranty discharges the insurer from liability but the insurer can waive the breach and remain liable.156 In marine insurance contracts the insurer will gain nothing by continuing the contract after deviation, and this is because he earns his premium once there is attachment of risk; however marine policies do make express provision for deviation through an extension clause which would come

151 152
153 154 155 156

Ibid per Lord Atkin. The carriage of Goods by sea- Stephen Girvin, Para 24.22
(1936) 55 Ll LR 159 Per Lord Wright (1936) 55 Ll LR 159 at 355 per Lord Atkin McCormich v. National Motor Ins. (1934) 40 Com.Cas 76, 93 per Slesser L.J. MIA 1906 ss 33, 34(3)

31

into effect on the discharge of the contract and provides for the continuation of cover on agreed terms. It is uncertain whether an unjustifiable deviation can be excused by subsequent waiver; there is no declared excuse in the statute. In this context, if waiver can operate, it must be unequivocal157; In Redman v London158 the insurer agreed to insure with knowledge that the ship has sailed and had deviated, held- liable for the loss occurring prior to the deviation and the insurer was not bound by waiver of a postdeviation loss; this reveals that even if the insurer is notified it would not serve as an excuse and there must be unequivocal evidence of a waiver for the insurer to be bound. However, it is uncertain that in the case of ordinary repudiatory breach of contract the contract remains operative, subject to the innocent partys election to terminate; but that, where a contract has been discharged there is nothing left to affirm by subsequent waiver. However a breach of warranty can be excused by subsequent waiver MIA 1906 ss. 33(3), 34 (3) and the same should be arguably be true in the case of deviation.159 Deviation and general average- When there is a common danger to the vessel or cargo and if some part of the vessel or cargo is sacrificed or if an extra expenditure incurred while averting that danger, the loss and expense thus incurred would fall within general average contribution and the apportionment would be between the ship and cargo depending their salved values.160 Furthermore, the ship owner can claim as a common carrier at common law and should be successful if the loss would have occurred even if there had been no deviation161. And if there is waiver for the breach of the contract by deviation (Hain case) the shipowner can claim general average contribution. Post Hain Case: Fundamental breach developed further in the context of cases falling within contract law.162. In Suisse Atlantique163, it was held correct approach to fundamental breach was constructive and that exempting clauses were to be viewed in the context of the entire contract. And in Photo production Ltd v. Securicor
157 158 159 160 161 162 163

According to F.D Rose (1813) 3 Camp 503 F.D Rose- Law of Marine Insurance. L. Payne and E.Ivamy Carriage of goods by sea; at 161 (1972) Carver at 614,615 Treitel (2003),225 Suisse Atlantique Societe dArmament Maritime SA v. NV Rotterdamche Kolen Centrale (1967) 1 AC 361

32

(Transport)164 the doctrine of fundamental breach was given its formal burial but they opined that deviation cases should be considered as a body of authority sui generis with special rules derived from historical and commercial reasons.165 In The Antares Nos 1 & 2, a quasi deviation166 case, where the shipowner relied on the 1 yr time bar, it was decided that the doctrine of fundamental breach, which displaced exception clauses altogether, no longer existed167 and an unauthorised loading of deck cargo could not be considered as a special case and thus on the true construction, art III r 6 of HVR applies and the carrier will be discharged from all liability unless a suit is brought within one year. Similarly in The Kapitan Petko Voivoda 168 (quasi deviation) this reasoning was accepted. Through these cases it was strongly suggested that whenever the court reconsider the doctrine of deviation, it would not survive as an independent legal concept. Furthermore, in Astrazeneca UK Ltd v Albermarle International Corp & Ors.169 Even if the breach of its obligation (deliver the product) had been a deliberate repudiatory breach,the question whether any liability for damages for that breach was limited by the (exclusion clause) would simply be one of the construing the clause. Thus the doctrine is put to snooze.

164 165 166 167 168 169

(1980) AC 827 Photo production Ltd v. Securicor (Transport) (1980) AC 827 Per Lord Wilberforce at 845 Cases which did not concern a deviation from geographical route. Girvin- p320 fn 79 Kenya Railways v Antares Co Pte Ltd (The Antares Nos 1 & 2) (1987) 1 Ll Rep 424 (CA) Per Lloyd LJ at 430 (2003) 2 Ll Rep 1 (2011) EWHC 1574 (Civ)

33

CHAPTER-4 (COMPATIBILITY BETWEEN CARRIAGE CONTRACTS AND MARINE INSURANCE s.49 REASONABLENESS) s.46 (1) and s.48 declare that only a delay or deviation without lawful excuse discharges the insurer from liability. In s.49 justifiable excuses are identified; it refers to the consequences where there is a deviation or delay (unreasonable) without lawful excuse.170 But the examples of lawful excuse prescribed are neither generally nor mutually171 exclusive172. Moreover, the act does not make any distinction between excuses which prevent departure from the prima facie method of performance from becoming a deviation in the first place and those which excuse what is prima facie unjustifiable conduct;173 and the duty falls on the assured to prove that deviation is justified.174 Excusable deviations stipulated in S.49 are discussed below: where there is express authorization by agreement - Firstly, the provision deals with authorisation by a special term in the policy- s.49(1(a); this means, if there is authorisation and if it is evident from the policy that the vessel can halt or visit a port apart from the insured route, then such departure would not amount to deviation requiring excuse and would very much fall within the voyage contemplated by the policy; it is in principle always permitted rather than excused 175.This is the case with liberty clauses in contracts of carriage and with Institute Cargo Clauses, cl 8.3.176 Any deviation authorised by policy would not amount to deviation within s.46 or delay (unreasonable) within s.48 and cl.8.3 is a clause authorising deviation or delay. A deviation in existence could also be sanctioned by a special agreement, although it is not expressly provided, it could be done by amendment to the policy.177 The function of these express terms is to

170

MIA 1906 ss 46 (1), s 47 (in the absence of any usage or sufficient cause to the contrary); Marine Insurance law and Practice- F.D Rose (2004) 171 Eg: barratry may be excused either generally under s.49 (1) (b) or specifically under s.49(1)(g); and sickness of the crew may be excused specifically under s.49(1)(f) or where the safety of the ship is imperiled, under s.49 (1)(d); Marine Insurance law and Practice- F.D Rose (2004) pp 11.50 172 Marine Insurance law and Practice- F.D Rose (2004) pp 11.50 (The act does not link the possibility of lawful excuse in s.46(1) and s.48 with the excuse listed in s.49) 173 Bennett- s.49 excuses as ones which prevent the relevant conduct becoming an unjustifiable deviation or unreasonable delay 174 Woolf v. Claggett (1800) 3 Esp 257 175 Marine Insurance law and Practice- F.D Rose (2004) pp 11.23-11.28 176 ICC 2009 discussed in chap- 2 177 Weir v. Aberdeen (1819) 2 B & Ald 320

34

nullify the effect of deviation by authorizing the conduct. In practice cover is given to unjustified deviation by means of h/c clauses; Arnoulds state that common h/c clauses do not authorise deviation or delay: they merely protect the assured from consequences of deviation or delay upon the fulfilment of certain conditions. Implied cover by the policy Delay in commencing a voyage, to be justifiable, should have been a delay for the purpose of the voyage, as waiting for a wind, provisions, or the like.178 Few illustrations in s.49 (1), regardless of the act, states that deviation/ unreasonable delay would be permissible if there is implied cover by the policy. Firstly, when it is reasonably necessary in order to comply with an express or implied warrantys.49(1)(c). Such a situation arose in Bouillon v. Lupton179 insurance on a voyage from Lyons to Galatz and there was sea voyage and river voyage. The vessel was not equipped for the sea voyage; so the vessel sailed after the warranted sailing date. The court held that dividing the voyage into two stages was customary and both river and sea voyages required different equipment and no seaworthiness warranty have been infringed as the vessel was ready for each stage and the sailing warranty was fulfilled when the voyage begun from Lyons on time. Secondly, when it is necessary for the safety of the ship or subject matter insured- s.49(1)(d). First part deals with safety of the ship; Deviation for repairs necessary for the ship to facilitate safe voyage is excused under this provision180. Deviation occasioned by force, and deviation occasioned by necessity are the same, for necessity is force. It is the want of repair, or any other immediate danger, which renders the deviation necessary. When the deviation is necessary and unavoidable, it has no effect on the obligation of the insurer. 181 And reasonable necessity refers to the standard of the reasonably competent and skilful master.182 The second part of the provision deals with the subject matter insured; and accordingly if the deviation is for saving the cargo which is not the subject matter insured, then such deviations would not be excused. However in few cases masters
178 179 180 181 182

Palmer v Fenning (1832) 9 Bing 460 Bouillon v. Lupton (1863) 15 CB (NS) 113. Motteux v London Assurance Co (1739) 1 Atk 545; Smith v Surridge (1801) 4 Esp 25 Scott v. Thompson (1805) 1 B & P (NR) 181 at 186 per Sir James Mansfield CJ. Phelps, James & Co v Hill (1891) 1 QB 605

35

duty to care for the cargo was successfully invoked (would be discussed under Compatibility below). Thirdly, s.49 (1) (f) Excuses deviation where reasonably necessary for the purpose of obtaining medical or surgical aid for any person on board the ship. In Woolf v Clagett183 it was decided that for successfully invoking this clause it should be proved that (1) a proportion of the crew are afflicted and the difficulty to navigate the vessel (2) there should be evidence showing that the vessel had adequate medical provision fit for the voyage undertaken. In this case the insurer was discharged as there wasnt any evidence proving the conditions prescribed. Presently illness to one person (crew or passenger) would excuse the deviation (s.49(1)(f)).184 Another important factor is the extent of warranty of seaworthiness which is implied in voyage policies. In Kish v. Taylor , despite the fact that an overloaded deck rendered the vessel unseaworthy and she had to deviate for necessary repairs for safe voyage; such a deviation was held justified but the shipowners right under the charterparty for breach of the terms existed.(i.e. the charterers failed to provide full cargo). Thus the excuse prevailed. Furthermore, an action necessarily taken to avoid a threat to the adventure is simply a proper method of carrying out the adventure rather than a deviation -Hyderabad (Deccan) Co v Willoughby185 Another aspect is, as the course of the voyage and reasonable despatch referred to in the act be defined by usage, such usage should be regarded as an excuse for otherwise unjustifiable conduct.186 Moreover, as per s. 49(1)(g) it would be excused if deviation is caused by the barratrous conduct of the master or crew,if barratry187 be one of the perils insured against. This means, even if there is no authorisation by the contract of insurance, an assured may recover in spite of the deviation from the voyage contemplated if that particular deviation falls within perils insured by it and barratry is also an excuse under s.49(1) (b).

183 184

(1800) 3 Esp 257 Bennett-law of marine insurance pp 536 185 (1899) 2 QB 530 per Bingham J. 186 Marine Insurance law and Practice- F.D Rose (2004) pp 11.54. 187 Barratry- In one sense refers to, deviation by the captain for fraudulent purposes of his own- Ross v Hunter (1790) 4 TR 33 per Buller J

36

Saving life

Deviation/delay for saving human life or aiding a ship in distress where

human life may be in danger is excused and articulated in s.49(1)(e); Saving human life and saving property incidental to saving human life is justified at common law and contracts of carriage governed by HVR sanction any deviation in saving or attempting to save life or property at sea or any reasonable deviation.188 However, a licence prescribed in contract of carriage will not justify conduct under a contract of insurance.189 To save human life when in peril is one of the most beneficial instincts of humanity, and is nowhere more salutary in its results than in bringing help to those who, exposed to destruction from the fury of the winds and waves.and is a uniform practice of the mariners of every nation.and there is neither injustice nor hardship in treating both the merchant and insurer as making their contracts with the shipowner as subject to this exception to the general rule of not deviating from the appointed course. 190 Saving property as distinct from saving human life would be of interest to insurers, shipowners and merchants for the law of salvage rewards the successful abundantly. 191 Thus it would be most unjust if the shipowner could thus take a chance of highly remunerative gain at the risk and possible loss of the merchant or the insurer neither of whom would derive any benefit from the preservation of the property saved 192 Clause 1.1 of IVCH83 & 95 provides for liberty to assist and tow vessels or craft in distress but these towage services should be consistent to the object of the contract.193 Similarly in the absence of threat to human life, the underwriters were held liable under this clause; Per Pollock B you must not so construe a condition as to make it eat up the contract.194 Furthermore under s.93 of The Merchant Shipping Act there is a general duty vested in the master of the ship to deliver assistance to vessels in distress; it is for the common advantage of all persons, underwriters and others to give and receive assistance to and

188 189 190 191 192 193 194

Carriage of goods by sea act 1971, s.1(2),Sched, art iv, r.4. The Goring (1988) AC 831 ; F.D Rose Restitution of the Rescuer (1989) 9 OJLS 167. Scaramanga & Co v. Stamp (1880) 5 CPD 295, 304-305 per Cockburn CJ. Bennett- Law of Marine Insurance pp 535 Ibid 189 John Potter & Co v Burrell & Son (1897) 1 QB 97 Stuart v British & African Steam Navigation Co (1875) 32 LT 257

37

from each other in distress -Lawrence v. Sydebotham.195 Some jurists do think that, in principle there is a wider public policy justification of deviation to save property and perhaps it is not confined to the narrower statement of licence under s.49(1)(e) to save life.196 However the Lawrence case justification of deviation for the benefit of the underwriters, function in favour of the underwriters of salved rather than the salving interests.197Moreover this traditional perspective on the limited scope of the excuse, clubbed with the free will of parties to insurance contracts to extend the excuse by express provision for deviation, makes it improbable for condoning the deviation for property salvage under marine policies198. Involuntary deviation s.49 (1)(b) portrays the principle that, only a voluntary and unexcused departure from the course of voyage discharges the underwriter from all subsequent loss199 and this means that deviation is excused if caused by circumstances beyond the control of the master and his employer for example, compulsion by the crew200 or force of weather201 and these constitute involuntary deviations. However the act of a master who deviates simply because of ignorance of the proper route 202 is not involuntary. The rule which is given effect in s. 49(1)(b) and (d) of the act is that a deviation if necessitated either by moral203 or physical force, or reasonably necessary for the safety of the ship or of the subject matter insured, will never discharge the insurer204 ; and there is not probably any exception to be met with to the application of the general rule, that if the vessel departs from the usual course of the voyage from

195 196

(1805) 6 East 45,54 per Lawrence J. F.D Rose- marine insurance law pp 11.56 197 (1805) 6 East 45, 54 per Lawrence J. 198 This view referred in- Company of African Merchants v. British and Foreign M I Co Ltd (1873) LR 8 Ex 154 199 Arnoulds statement The provisions of ss 46 and 49 have necessitated a change of language and the act seems to regard even an involuntary departure from the proper course as a deviation, though excusable by reason of s.49(1)(b) 200 Elton v. Brogden (1747) 2 Str 1264 where the crew with the letter of marquee insisted to return to a port with the prize captured); Driscol v. Bovil (1798) 1 B & P 313 ( the crew refused to proceed on the voyage insured for fear of Moorish Cruisers. 201 Delany v. Stoddart (1785) 1 TR 22. 202 Phyn v Royal Exchange Ass Co (1798) 7 TR 505 (it was held deviation) 203 Bennett, 277 Moral imperative; Arnould, 494 Moral Force 204 Arnoulds- Law of Marine Insurance; Roccus; nn.52,53 cited 2 Emerigon, cl 13,s.15, p.94

38

necessity, and departs no further than that necessity requires, the voyage will still be protected by the policy- Robinson v Marine Insurance Co.205 Under s.49, deviations resulting from circumstances within the control of the master and employee are excused under one or the other heads206. Arnoulds difficult to determine (1) what degree of force or constraint will amount unavoidable necessity as, on that ground to justify a departure from the course of the voyage; (2) what circumstances, short of such unavoidable necessity, will excuse the ship in departure from, or delaying, the usual course of the voyage. Elton v. Brogden207 is an example for a situation that would amount to unavoidable necessity. Herein the crew sailing with letters of marque rebelled against the master and insisted to return home with the prize he had taken rather than continuing the voyage. The master had to submit to this remonstration and return home; Held- such a deviation by the master did not discharge the insurers. Whereas in Phelps v Auldjo208 the master without any remonstration and without any threat or force to another submitted to the captain of the kings ship by deviating to examine the strange sail bearing enemy colours. Held- amounts to deviation. Therefore when a deviation is required to be justified on the ground of unavoidable necessity, it must be shown that a degree of force was exercised towards the captain, which either physically he could not resist, or morally as a good subject, he ought not to resist. 209 Uninsured peril Arnoulds The functioning of uninsured peril does not discharge the

insurer; peril insured is irrelevant to whether it generates a necessity denying voluntariness- Bennett . It is excusable if caused by circumstances beyond the control of the master and his employer but expenditure would not be met because incurred for the purpose of averting or diminishing a loss not covered by the policy.210 In OReilley v. Royal Exchange Assurance Co211. The ship was not ready to face capture (expressly

205 206

2 Johns. 89 (1806) per Chancellor Kent. Kish v Taylor, Sons & Co (1912) AC 604; MIA 1906 s.55(2)(a) 207 (1747) 2 Strange 1264. 208 (1809) 2 Camp. 350 209 Ibid Per Lord Ellenborough at 351 210 Expense would not be recoverable under suing and laboring clause. S.49(1)(b), s.78 (3);Duty of assured clauses in Institute clauses- same effect- Arnoulds pp 14-85. 211 (1815) 4 camp 246

39

excluded peril). For avoiding seizure the vessel was at sea before she was properly loaded, and was forced was put to a port out of the course of voyage and she wrecked held- insurers not liable (warranty of the policy) as the loss was the result of an undertaking to avoid a risk, which the underwriters had predetermined to be not liable (contained f.c&s.clause). In OReilley v Gonne
212

, same ship but claim for freight and

there was no f.c.&s.clause; held, insurers liable and produced a different result from that of the first. By applying s.49 (1)(d), the insurer would not be discharged for deviation. However, when a peril is specifically excluded and not included in the policy, the assured would not be able to recover on that ground. Compatibility between MI and Carriage of goods-Firstly, under common law, Hague Visby rules and insurance, saving human life, or aiding a ship in distress where human life may be in danger is justified (s.49(1)(e)). In Scaramanga v Stamp it was held that such a liberty will not apply to deviations for the sole purpose of saving property and this rule is applied in contracts of insurance as well; saving property does not carry the same moral imperative213 as that of saving life. Although there is no moral imperative, it is highly rewarding to save property at sea (successful salvors). Secondly, saving property -The master has the duty to take reasonable care of the cargo and deviation would be justified if the danger is of a reasonably permanent nature.214 However there is uncertainty in law, regarding the masters duty to take reasonable care of the cargo entrusted to him and extending this obligation to deviate in the interests of preserving the cargo alone, in the absence of any danger to the vessel. The MIA excuses deviation or delay in prosecuting the voyage contemplated by the policy, where reasonably necessary for the safety of the ship or subject matter insured. Under common law saving property alone was considered unreasonable but saving ship was justified and under Hague-Visby rules art iv r.4 deviation to save property at sea and any reasonable deviation was included. In UK the courts gave a very restricted approach towards the

212 213
214

(1815) 4 camp 249

Bennett. 18.52
Hand v. Baynes (1839) 4 Wharton 204

40

term reasonable deviation and generally what amounts to reasonable deviation is treated as a question of fact. The house of lords held that the true test would be what the departure from the contract voyage might a prudent person controlling the voyage at the time make and maintain, having in mind all the relevant circumstances existing at the time, including the terms of the contract and the interests of all the parties concerned, but without obligation to consider the interests of anyone as conclusive 215. So this means the prudent master should choose by observing all relevant

circumstances, terms of contract and insurance of the parties.

This is the same in

Marine Insurance as reasonable necessity (s.49(1)(d)) refers to the standard of the reasonably competent and skilful master.216 In The Xantho it was held that the shipowner had an implied obligation to use due care and skill in navigating the vessel and carrying the goods 217 and such a duty on the master (who represents the shipowner) extends to take reasonable care of the goods entrusted to him, not merely in doing what is necessary to preserve them on board the ship during the ordinary incidents of the voyage, but also in taking reasonable measures to check and arrest their loss, destruction or deterioration, by reason of accidents and further a fair allowance ought to be made for the difficulties the master may be involved i.e. circumstances affecting risk, trouble, delay and inconvenience must be taken into account. 218Another case dealing with the same issue is Nobels Explosives Co v. Jenkins & Co. the carriers agreed to carry the goods which were contraband of war, from London to Yokohama under a bill of lading containing the exception of restraint of princes. War broke out when the vessel reached Hongkong, and had the vessel sailed from Hongkong with the goods, they would have been seized and confiscated by Chinese warships. So the master prudently landed the goods in Hongkong to preserve it. This conduct of the captain was justified by reference to the duty imposed upon him to take reasonable care of the goods entrusted to him. Whether he had discharged that duty depends upon the

215 216 217 218

Stag line v. Foscolo, Mango & Co (1932) AC 328 at 343 Per Lord Atkin Phelps,James & Co v. Hill (1891) 1 QB 605 The Xantho (1887) 12 AC 503 Per Lord Mcnaghten at 515 Notara v Henderson (1872) LR 7 QB 225.Per Willes J at 235

41

circumstances of each case and here if the goods had been carried forward, there was every reason to believe that the ship would be detained and the goods of the plaintiffs confiscated.219These cases do prove that deviation would be justified to the extent the duty exists under the contract of affreightment. But however the master who represents the shipowner who is presumed to be reasonably competent and skilful 220 is put into a position to choose between the duty to care and interests of all other parties. There were attempts to give the true meaning of this concept especially in contracts where HVR are incorporated; yet only in few cases the carrier was successful to invoke this defence. In Al Taha221 it was held that reasonable deviation within Art iv, r.4 could be a deviation planned before the voyage began or the bills of lading were signed. The boom was necessary if Al Taha was to be reasonably fit to discharge her cargo at her destination.And as the boom was not necessary to render the vessel seaworthy at the commencement of the voyage it was reasonable to plan to deviate to collect the boom en route rather to wait for the weather conditions to permit delivery; performance was within the liberty under art iv,r.4. Thirdly, problem of compatibility lies in the apprehension of peril. Commercial men should not be asked to wait till the end of a long delay to find out from what in fact happens whether they are bound by a contract or not; they must be entitled to act on reasonable commercial probabilities at the time when they are called upon to make up their minds (the Charterers called off the contract, when an excepted peril, restraint of princes was active and they were held justified; since the restraint was expected to prevent the shipowner from carrying out the charter for commercially unreasonable period of time).222 Similarly in Noble Explosives case, deviation caused by an apprehended peril which constituted a restraint, was excused under the traditional war risks exclusion in contracts of affreightment; for the vessel is not expected to run towards destruction to operate the defence under this exception to the contract. But, a
219
220

Nobels Explosives Co v. Jenkins & Co (1896) 2 QB 326 Per Mathew J Phelps,James & Co v. Hill (1891) 1 QB 605 221 The Al Taha (1990) 2 Ll Rep 117 Per Mr. Justice Philips at 118 222 The Embiricos principle and the law of Anticipatory Breach- J.W Carter, The Modern Law Review (vol .47, No. 4 1984 pp 422-436) Embiricos v Sydney Reid & Co (1914) 3 KB 45,54 Per Scrutton J

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mere apprehension of peril, though well founded with successful measures to avoid it, is not adequate to give rise to a claim against underwriters; and the only circumstance where such evasive measures may possibly be said to give rise to a claim on insurance are those where there is an actual existing state of a peril in the vicinity of the vessel.223There is difference in the marine insurance and contracts of carriage approach towards this matter. In insurance if adventure is lost because the shipowner with reasonable prudence orders the vessel to sail, trying to avoid the peril insured against, then it is not a loss within the terms of the policy224 and the proximate cause of the

consequential loss is attributed to, apprehension of the peril rather than the peril itself225; but if a ship deviates reasonably to evade hostile warships but incurred loss due to consequent retardation of the voyage ,then for such losses the carrier will sustain no liability and such deviation will not discharge any insurance policies; Moreover a nonperformance of a charterparty or bills of lading is uniformly excused under a restraints clause. But in marine insurance the proximate cause rule applies strictly and recovering a loss caused by avoiding an apprehended peril is denied. In San Roman- an apprehension of capture founded on circumstances calculated to affect the mind of a master of ordinary courage, judgement and experience justified delay.226 Whereas in MI the masters prudence to avoid the apprehended peril would be outside the cover; it is not a loss within the terms of the policy.227 Consequences of excused deviation or delay Firstly, the insurer will not be discharged from liability if there excused deviation or delay; but the loss incurred during a justifiable deviation is not recoverable if it is caused by an uninsured peril (s.49(1)(g)-where caused by the barratrous conduct of the master or crew, if barratry be one of perils insured against). Secondly, although the excuse would allow the assured with cover despite the unjustifiable deviation, it does not per se relieve him of other liabilities. Hence even an authorised deviation to avoid the initial unseaworthiness would still hold
223 224 225 226 227

Watts,Watts & Co v. Mitsui & Co Ltd (1917) AC 227 Hadkinson v. Robinson 3 B & P. 388 (1803); Restraint of Princes- Harvard Law Review (1919) Vol.32 No.7 The Bamburi (1982) 1 Ll Rep 312,316 The San Roman (1873) LR 5 PC 301 Per Sir Montague Smith at 305 Hadkinson v. Robinson 3 B & P. 388 (1803)

43

the shipowner liable to the cargo-owner for loss flowing from the initial breach of contract of carriage.228Thirdly, a vessel may during a justifiable deviation, involve in activities other than those for which deviation is justified; ex: to trade while calling at a port to obtain necessary provisions; but in such cases risk should not be increased229 and while executing such permissible incidental activities there is a strict obligation to commence the voyage as soon as possible.230 Fourthly, deviation caused by insured and uninsured231 perils might be excused. But no insurance if the policy specifically excludes peril which caused the deviation232 and in such situations, it would be unable to recover sue and labour charge for averting or minimising loss caused by an uninsured peril.233 Restrictive scope, cessation of excuse and continuation of the contract voyage The

excuses for deviation are authorised restrictively because deviation is prima facie outside the ambit of the policy. Once the object of justified deviation is satisfied or ceased, the original adventure as contemplated in the policy must be continued as soon as possible; s.49(2) states when the cause excusing the deviation or delay ceases to operate, the ship must resume her course and prosecute her voyage, with reasonable dispatch. Delany v Stoddart234- the vessel is not obliged to return to the point at which she deviated from the contract route in order to continue the voyage but may do what is reasonable to regain the contract route from the place where she is when the excuse for deviation ceases. It should be left to the prudence of the master to choose between retracing her route back to the point where she deviated or to move to the destination as soon as possible; subject to the true construction of the policy. Reasonable dispatch referred to in the provision, makes it necessary for the deviated ship to proceed towards destination rather than retracing the route which might again cause delay.

228 229 230 231 232 233 234

Kish v Taylor, Sons & Co (1912) AC 604 Raine v Bell (1808) 9 East 195. F.D Rose- Marine Insurance law and practice (2004) pp 11.67 Scott v Thompson (1805) 1 B & P NR 181 OReilly v Gonne( 1815) 4 Camp 249; OReilly v Royal Exchange Ass (1815) 4 Camp 246. MIA 1906 S.78(3) (1785) 1 TR 22.

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Conclusion Deviation is like a dormant volcano, although at repose it still has its effects once awake. This is still considered serious because an unjustifiable deviation contradicts the intention of the parties by displacing the contract. The MIA provides for loss of insurance in case of deviation from insured voyage (carrier becomes the insurer). The held covered clauses were introduced to mitigate this variation in risk. But there might be disputes over the appropriate additional premium (reasonable market rates) and the duty to render prompt notice if not properly constructed. The carrier by inserting exclusion clauses was allowed to deviate within the ambit of the clause. However the exclusion clause should not be contradictory to the main object of the contract and invoking such clauses depends upon how it is construed. Even a slight deviation which results in no loss of cargo, in common law is given a strict view as it displaces the contract-fundamental breach (the hain case is not overruled yet). However with the series of cases and Astrazeneca UK Ltd v Albermarle International Corp & Ors 235 the doctrine is at snooze. Furthermore, wherever Hague-Visby rules apply the carrier can take reasonable deviation, insert liberty clauses; without being completely deprived of all the rights. Presently deviation problems are of less significance as marine insurance policies contain held covered clauses through which the assured will be covered in case of deviation by payment of additional premium. But again there might be problems when a particular act is considered justified in contracts of carriage and unjustified in Marine insurance (ex: Apprehension of peril). The subject matter of the marine insurance is the insured voyage and it should be embarked upon with reasonable dispatch this should be viewed in conjunction with the policy; But, the policy does not displace the MIA 1906.

235

(2011) EWHC 1574 (Civ)

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BIBLIOGRAPHY

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1. Stephen Girvin- Carriage of Goods by Sea (Oxford University Press, 2007) 2. John F. Wilson Carriage of Goods by Sea (7th Edn. Harlow Longman, 2010) 3. Howard Bennett Law of Marine Insurance (2nd Edn. Oxford University Press, 2006) 4. Arnoulds Law of Marine Insurance and Average (17th Edn. Jonathan Gillman: 2008) Sweet & Maxwell,

5. Voyage Charters (Lloyds Shipping Law Library) 3 rd Edn. By Julian Cooke, John Kimball, Timothy Young, David Martowski, Andrew Tayler, LeRoy Lambert (2007) 6. The Modern Law of Marine Insurance- edited by Rhidian Thomas (2002) 7. Marine Insurance Law and Practice - by F.D Rose,2004. 8. Marine Insurance Clauses (4th edn) N.Geoffery Hudson and Tim Madge,2005. 9. Law of Marine Insurance-Susan Hodges 1996. 10. Marine Insurance and General Average in the United States (3rd ed)1991, by Leslie J. Buglass. 11. Scrutton on Charter Party and Bills of Lading (21 st edn) London ( Maxwell, 2008) 12. Shipping Law (8th edn) Chorley & Giles, 1988 13. 3 Carver, British Shipping Laws ( 2 Edn. 1963) 14. L. Payne and E. Ivamy, Carriage of Goods by Sea (1973) 15. W.Poor, Charterparties and Ocean Bills of Lading (1968) Sweet &

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Cases referred
1. Oswell v.Vigne (1812) 15 East 70. 2. Rendall v. Arcos (1937) 43 Com Cas (HL). 3. Hain Steamship Co v. tate & Lyle (1936) LlLR 159(HL). 4. Davis v. Garrett (1830) 6 Bing 716,725. 5. Palmer v. Marshall (1832) 8 Bing 317. 6. The Eurysthenes (1977) Q.B 49. 7. Tyrie v. Fletcher (1777) 2 Cowp. 666. 8. Isaacs v. Royal Ins Co (1870) L.R.5 Ex 296. 9. Walker v. Protection Ins Co,29 Mainer 317 (1849). 10. Motteux v. London Ass Co (1739) 1Atk.545. 11. Forbes v. Wilson (1800) Marshall Ins. 206; 1 Park 472. 12. Wooldrige v. Boydell (1778) 1Douge 16. 13. Maritime Ins Co v. Stearns (1903) 2KB 912. 14. Simon, Israil & Co v. Sedgwick (1893) 1QB 303(CA). 15. Sellar v. MVicar (1804) 1Bos & Pull (NR) 23. 16. Way v. Modigliani (1787) 2TR 30. 17. Nima SARL v. Deves Insurance Plc (The Prestrioka) (2003) 2Ll Rep 327. 18. Nam Kwong Medicines & Health Products Co Ltd v.China Insurance Co Ltd (2002) 2Ll Rep 591 (Hong kong Court). 19. Company Of African Merchants Ltd v. British & Foreign Marine Insurance Co Ltd (1873) LR 8 Ex 154. 20. Chitty v. Selwyn (1742) 2 Atk 359. 21. Grand v. king (1802) 4 Esp 175. 22. Birrell v. Dryer (1884) 9 App Cas 345. 23. Thame & Mersey Marine Insurance Co Ltd v. HT Van Laun & Co (1917) 23 Com Cas 104. 24. Richard v. Forest Land, Timber) & Railway Co Ltd (The Minden)(1942) AC 50.

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25. Tasker v. Cunninghame (1890) 1 Bligh 87. 26. Elliot v. Wilson (1776) 4 Bro PC 470. 27. Scott v. Thompson (1805) 1 B & P (NR) 181. 28. Robinson v. Marine Insurance Company,2 Johnson Rep 89. 29. Reardon Smith Line Ltd v. Black sea & Baltic General Insurance Co Ltd (1939) AC 562. 30. Beatson v. Haworth (1796) 6TR 531. 31. Marsden v. Reid (1803) 3 East 572. 32. The Dunbeth (1897) P 133. 33. Hammond v. Ried (1820) 4B & Aid 72. 34. Bain v. Cove (1829)3 Cas & P 496. 35. Philips v. Irving (1844) 7 Man & G 325. 36. British American Tobacco Co Ltd v. H.G Poland (1912) 7 Ll Rep 108. 37. Niger Co Ltd v. Guardian Assurance Co (1922) 13 Ll Rep 75. 38. Hyderabad (Deccan) Co v. Willoughby (1899) 2 QB 530. 39. Liberian Insurance Agency Inc v. Mosse (1977) 2 Ll Rep 560. 40. British & Foreign Marine Insurance Co Ltd v. Grand (1921) 2 AC 41. 41. Overseas Commodities Ltd v. Style (1958) 1 Ll Rep 546. 42. Hood v. West End Motor Car Parking Co (1916) 2 KB 395 (CA). 43. Greenock Steamship Co Ltd v. Maritime Co Ltd (1903)1 KB 367. 44. Mentz, Decker & Co v. Maritime Insurance Co (1910) 1 KB 132. 45. Maritime Insurance Co v. Stearns (1901) 2 KB 912. 46. Brandt v. Liverpool S.N Co (1924) 1 KB 575. 47. Achille Lauro Fu Gioacchino & Co v. Total Societa Italiana Per Azioni (1969) 2 Ll LR 65. 48. Leduc v. Ward (1888) 20 QBD 475. 49. Morrison v. Shawsavill (1916) 2 KB 783. 50. Searamanga v. Stamp (1880) 5 CPD 295 (CA). 51. Dauncan v. Koster (The Teutonia)(1872) LR 4 PC 171.

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52. The Anastasia (1971) 1 Ll Rep 375. 53. The Louise (1945) AMC 363. 54. The Rone (No.2)(1884) 51 LT 28. 55. Philps v. Hill (1891) 1 QB 605. 56. Notara v. Henderson (1870) LR QB 346. 57. 121 Wallen v. Muller (1927) 2 KB (99). 58. Renton v. Palmyra (1956) 1 QB 462. 59. Stag Line v. Forcolo, Mango & Co (1932) AC 328. 60. United States Shipping Board v. Bunge Y Born (1925) T.L.R 174. 61. Frenkel v. MacAndrews & Co Ltd (1929) AC 545. 62. Glynn v. Margeston & Co (1893) AC 351 (HL). 63. Connolly Shaw Ltd v. A/S Detnordenfjeldshe D/S (1934) 49 Ll LR 183. 64. Theiss v. Australian Steamship (1955) Ll Rep 459. 65. Hadji v. Anglo- Arabian (1906) 11 Com.Cas 219. 66. Hain.S.S Co v. Tate & Lyle (1934) 39 Com.Cas 259. 67. Koufos v. C.Czarnikow Ltd (The Heron II)(1969) 1 AC 350. 68. Joseph Phorley Ltd v. Orchis Steamship Co Ltd (1907) 1 KB 660 (CA). 69. International Guano v. MacAndrew & Co (1909) 2 KB 360. 70. McCormich v. National Motor Ins (1934) 40 Com.Cas 76. 71. Redman v. London (1813) 3 Camp 503. 72. Suisse Atlantique Socite DArmament Maritime SA v. NV Rotterdamche Kolen Central (1967) IAC 361. 73. Photo Production Ltd v. Securicor (Transport)(1980) AC 827. 74. Kenya Railways v. Antares Co Pte Ltd(The Antares Nos 1 & 2 )(1987)1 Ll Rep 424 (CA). 75. The kapitan Petko Voivoda (2003) 2 Ll Rep 1. 76. Woolf v. Claggett (1800) 3 Esp 257. 77. Weir v. Aderdeen (1890) 2 B & Ald 320. 78. Palmer v. Fenning (1832) 9 Bing 460.

79. Bouillon v. Lupton (1863) 15 CB (NS) 113. 80. Smith v. Surridge (1801) 4 Esp 25. 81. Ross v. Hunter (1790) 4 TR 33. 82. The Goring (1988) AC 831. 83. John Potter & Co v. Burrell & Sons (1897) 1 QB 97. 84. Stuart v. British & Africa Sterm Navigation Co (1875) 32 LT 257. 85. Lawrence v. Sydebothan (1805) 6 East 45. 86. Elton v. Brogelen (1747) 2 Str 1264. 87. Driscol v. Bobil (1798) 1 B & P 313. 88. Delamy v. Stoddart (1785) 1 TR 22. 89. Phyn v. Royal Exchange Ass Co (1798) 7 TR 505. 90. Kish v. Taylor, Sons & Co (1912) AC 604. 91. Phelps v. Auldgo (1809) 2 Camp.350. 92. OReilley v. Royal Exchange Assurance Co (1815) 4 Camp 246. 93. OReilley v. Gonne (1815) 4 Camp 249. 94. Hand v. Baynes (1839) 4 Wharton 204. 95. The Xantho (1887) 12 AC 503. 96. Notara Henderson (1872) LR7 QB 225. 97. Nobels Explosives Co v. Jenkins & Co (1896) 2 QB 326. 98. The Al Taha (1990) 2 Ll Rep 117. 99. Embiricos v. Sydney Reid & Co (1914) 3 KB 45 100.Watts,Watts & Co v. Mitsui & Co Ltd (1917) AC 227. 101.Hadkinson v. Robinson (1803) 3 B & P 388. 102.The Bamburi (1982) 1 Ll Rep 312. 103.The San Romen (1873) LR 5 PC 301. 104.Raine v. Bell (1808) 9 East 195. 105. Astrazeneca UK Ltd v Albermarle International Corp & Ors (2011) EWHC 1574 (Civ)

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