Ikerigi Compania Naviera S.A. v Palmer (Wondrous)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE LLOYD,LORD JUSTICE NOURSE,LORD JUSTICE MCCOWAN |
| Judgment Date | 16 June 1992 |
| Judgment citation (vLex) | [1992] EWCA Civ J0616-1 |
| Docket Number | 92/0562 |
| Court | Court of Appeal (Civil Division) |
| Date | 16 June 1992 |
[1992] EWCA Civ J0616-1
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(MR JUSTICE HOBHOUSE)
Royal Courts of Justice
Lord Justice Lloyd
Lord Justice Nourse
Lord Justice McCowan
92/0562
MR ANTHONY HALLGARTEN Q.C. and MR CHARLES HADDON-CAVE, instructed by Messrs Sinclair, Roche & Temperley, London agents for Messrs Davies Grant & Horton (Plymouth), appeared for the Appellant (Second Plaintiff).
MR NICHOLAS LEGH-JONES Q.C. and MR TIMOTHY YOUNG, instructed by Messrs Hill Taylor Dickinson, appeared for the Respondents (Defendants).
In this appeal we are concerned with two policies of marine insurance which have conveniently been referred to as the loss of hire policy and the freight policy. Under the loss of hire policy the plaintiffs were covered against "loss of hire and/or earnings and/or anticipated hire" in respect of their vessels "Wondrous" and "Welcomer". The perils insured were those enumerated in the Institute War and Strikes Clauses Hulls Time. Under the freight policy the plaintiffs were covered in respect of their vessels "Wondrous" and "Tropez Comfort". The risks insured were those set out in the Institute Time Clauses Freight, and the Institute War and Strikes Clauses. There is a dispute whether the War and Strikes Clauses referred to in the freight policy are the Hull Clauses, as in the loss of hire policy, or the Freight Clauses. But that is only one of very many issues between the parties.
The old form of Lloyds S.G. policy was subject to a great deal of judicial criticism for two hundred years or more. It was to be hoped that the new form of policy introduced in January 1982, and the new Institute Clauses would have made it easier for the parties to define more clearly the intended scope of cover, whether the insurance be on hull, freight or cargo. Unfortunately the present case proves that hope to have been in vain. The two policies are littered with obscurities and infelicities, for which the chief responsibility must lie with the brokers.
The facts giving rise to the plaintiffs' claims under the two policies are the same. They are set out in great detail, and with great precision, by the learned judge. I do not intend to repeat them here. His judgment is reported at [1991] 1 Lloyd's Rep. 400. Save as to one point there is no attack on the judge's findings of fact. As to the judge's conclusions, I find myself, with two exceptions, in complete agreement with him. The exceptions make no difference to the result.
The "Wondrous" was chartered to load a full and complete cargo of 30,000 tons of molasses at Bandar Abbas in the Persian Gulf for carriage to north Europe or the Mediterranean. She arrived on 10th March 1987. By 14th August she had loaded 23,000 tons. But that was all. She did not sail until 17th October 1988. By then huge liabilities had been incurred, both for port dues and demurrage.
But there was a bright side. On 20th October 1987 the plaintiffs made a claim against the Hellenic War Risks Club for a constructive total loss of the vessel. On 14th July 1988 the Club compromised the claim. They paid fifteen sixteenths of the insured value of the hull, amounting to $7,240,000. But they declined to accept the plaintiffs' notice of abandonment. So the plaintiffs were left with the vessel, which they subsequently sold, as well as the proceeds of insurance. They also received gross freight of $644,000 when the vessel eventually discharged at Aarhus in Denmark, plus $84,000 dead freight. The gross freight was calculated at the charterparty rate of $28 per ton on 23,000 tons. Out of the gross freight, the plaintiffs paid port dues amounting to $288,893 and certain other charges amounting to $112,500. So the net freight received was $326,607.
I can now turn to the two policies, taking the loss of hire policy first.
Loss of Hire
The policy contains the follow provisions:
"INTEREST: WAR LOSS OF HIRE and/or EARNINGS and/or ANTICIPATED HIRE. Daily amount US.$10,000 each vessel. Fixed and agreed, Chartered or Unchartered.
SUM INSURED: US.$9,000 each vessel.
Conditions: This insurance to pay the above daily amount for 90 days any one accident or occurrence and in all, excess of 14 days any one accident or occurrence.
Subject Jardine Glanvill Limited War Loss of Hire Wording No.l. dated 17.4.84".
The Jardine Glanvill wording provides:
" WAR ETC. LOSS OF HIRE WORDING
Subject to the conditions hereinafter set out, this policy shall only pay if in consequence of the risks enumerated in the Institute War and Strikes Clauses Hulls—Time 1.10.83 including London Blocking and Trapping Addendum LPO 444 the vessel or craft be prevented from earning hire or reward for a period in excess of AS ATTACHED consecutive period of 24 hours in respect of any one occurrence provided that:-
(a) such occurrence occurs to the insured vessel or craft and
(b) such occurrence occurs during the currency of this policy and
(c) repairs if actually carried out in respect if damage and (sic) completed within twelve months of the expiry of this policy.
In such circumstances this policy shall pay AS ATTACHED for each 24 hour period during which the vessel or craft is so prevented, for not exceeding a further AS ATTACHED days in respect of any occurrence and Limit AS ATTACHED days in all.
..…
Each casualty shall be subject to a deductible period, which shall be reckoned from the beginning of the casualty and shall last until the loss of time in consequence of the casualty has reached the number of days deductible stated in the policy wording…
The insurers' liability for loss of time in consequence of any one casualty and for the total loss of time in consequence of all casualties occurring during the insurance period, is limited to the sum insured per day multiplied by the number of days of indemnity any one casualty and in all stated in the policy wording".
The Institute War and Strikes Clauses Hulls Time provide:
"1. PERILS
Subject always to the exclusions hereinafter referred to, this insurance covers loss of or damage to the Vessel caused by
1.1 war, civil war, revolution, rebellion, insurrection, or civil strife arising therefrom, or any hostile act by or against a belligerent power
1.2 capture, seizure, arrest, restraint or detainment,
and the consequences thereof or any attempt thereat
1.3 derelict mines, torpedoes, bombs or other derelict weapons of war
1.4…
1.5 any terrorist or any person acting maliciously or from a political motive
1.6 confiscation or expropriation.
4. EXCLUSIONS
This insurance excludes
4.1 loss, damage, liability or expense arising from
4.1.1. any detonation of any weapon of war employing atomic or nuclear fission and/or fusion…
4.1.2 the outbreak of war…between any of the following countries: United Kingdom…
4.1.3. requisition or pre-emption
4.1.4 capture, seizure, arrest, restraint, detainment…by or under the order of the government…of the country in which the Vessel is owned…
4.1.5 arrest, restraint, detainment, confiscation or expropriation under quarantine regulations or by reason of infringement of any customs or trading regulations
4.1.6 the operation of ordinary judicial process, failure to provide security or to pay any fine or penalty or any financial cause
4.2 loss, damage, liability or expense covered by the Institute Time Clauses—Hulls…
4.3 any claim for any sum recoverable under any other insurance on the Vessel…
4.4 any claim for expenses arising from delay…"
The plaintiffs say that the vessel was prevented from earning hire or reward for a period of 90 days in excess of 14 days in consequence of being "detained" within the meaning of clause 1.2 of the Hulls Clauses, and that they are therefore entitled to recover $900,000.
The defendants rely on clause 4.1.5 which excludes from cover detainment "under quarantine regulations or by reason of infringement of any customs or trading regulations". In the court below the plaintiffs argued that the policy covers the perils enumerated in clause 1 without the exclusions. The judge rightly rejected that argument, and it has not been revived.
There remains the question whether there was here any detainment at all within the meaning of clause 1.2, and if so whether it was by reason of infringement of any customs regulation.
As to detention, the facts as found by the judge were as follows:
"The situation was simply that at no material time until October 1988 did she have clearance under the local customs regulations to leave Bandar Abbas. Accordingly, if she had tried to leave, she would have been forcibly detained as she would have been in breach of the local customs laws. In that sense, but in that sense only, she was detained at Bandar Abbas".
There were two requirements to be satisfied before the vessel could obtain customs clearance. The first was the payment of port dues, plus a local tax on freight. The second was the furnishing of a foreign currency guarantee, or FCG, in respect of the cargo. The purpose of the FCG was to ensure in accordance with Iranian foreign exchange control that at least $50 per ton, representing the FOB value of the cargo, was remitted in hard currency. The exporter would then be reimbursed by the Iranian central bank in rials. The first of these requirements was the responsibility of the vessel. The second was the responsibility of the exporter, Dr Tehrani, and his bankers, Bank Melli.
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