Nima SARL v The Deves Insurance Public Company Ltd

INTRODUCTION

This is an appeal by the defendant insurance company (a company incorporated and resident in Thailand) from the order and judgment of Mr Justice Andrew Smith dated 29 November 2001 by which he dismissed the defendants' application for an order setting aside the earlier order of Mr Justice Toulson dated 18 January 2000 granting permission to the claimants pursuant to RSC Order 11 rule 1(1)(d)(iii) to serve the Claim Form on the defendants out of the jurisdiction. The ground relied on for the grant of such permission was that the contract sued upon, a marine insurance policy, is governed by English law. Andrew Smith J refused permission to appeal. However, permission was subsequently granted by Clarke LJ on 27 December 2001.

The claimants (a company incorporated and resident in Mali) were purchasers from Central Rice Co Ltd of Thailand ("Central") under a CIF contract of a cargo of some 5,500 tonnes of rice valued at about €1.5 million shipped on a vessel bearing the name "PRESTRIOKA" ("the vessel") at Kohsichang in Thailand in March 1999 for carriage to Dakar in Senegal. The cargo was insured under an all risks Marine Cargo Policy issued in Bangkok ("the Policy") as follows:

"NAME OF ASSURED: Central Rice Co. Limited. VESSEL: PERESTRIOKA. VOYAGE: At and from Kohsichang … TO: Dakar Port in Transit … Insurance Certificate for 110% of CAF Free Out Dakar Value Covering All Risks. As per Institute Cargo Clauses (A)….".

By an endorsement dated 10 March 1999 the definition of the voyage the subject of cover under the policy was amended to read:

"From Kohsichang, Thailand to Dakar port, Senegal."

The cargo never arrived at its destination and has been totally lost in mysterious circumstances. The claimants claim for loss of the cargo on the basis that it resulted from a peril insured against under the terms of the policy and in particular under Clause 1 of the Institute Cargo Clauses (A) ("ICC") which provides inter alia that:

"1. This insurance covers all risks of loss of or damage to the subject-matter insured except as provided in Clauses 4, 5, 6, and 7 below." (None of those numbered clauses is relevant for the purposes of this appeal)

…

5.2 The Underwriters waive any breach of the implied warranty of seaworthiness of the ship and fitness of the ship to carry the Subject-matter Insured to destination, unless the Assured or their servants are privy to such unseaworthiness or unfitness."

It was an express term of the policy that:

"Notwithstanding anything contained herein or attached hereto to the contrary, it is understood and agreed that this insurance is subject to English law and practice only as to all questions of liability for and settlement of any and all claims arising under this Policy."

I shall refer below to certain further clauses of the ICC which are relevant to the argument on this appeal.

THE BACKGROUND

The following are the material facts so far as known when the matter was before the judge, as summarised by him.

The vessel was chartered by the sellers of the cargo on an amended Gencon voyage charter dated 24 February 1999. SGS inspected the vessel and cargo at loading, and shipment on board of the cargo was acknowledged by 2 Congen bills of lading dated Thailand 5 March 1999, naming the claimants as the notified party and Dakar as the discharge port. The vessel did not in fact sail until 28 March 1999 because she was undergoing engine repairs.

The normal passage time to Dakar is 32–35 days. Thus, the vessel should have arrived in the ordinary course at the beginning of May 1999. Faxed communications concerning the progress of the vessel were received by the agents on paper bearing the letterhead of 'Prestrioka Maritime Limited (Penang Representative Office)' and signed by 'Eddy' of that office who stated that the owners were in touch with the vessel on a daily basis. On 22 April 1999, they advised she had been delayed owing to her speed and on 24 April 1999 gave an ETA at Dakar of 20/21 May 1999. On 13 May, the owners advised that the vessel would be in Dakar within 15/16 days, her main engine problem resulting in an unfavourable speed. On 20 May 1999 the owners advised that the vessel had not been heard from for 7 days. The last message from the owners was received on 24 May 1999 reporting the vessel's position as at 22 May and stating that the vessel's main engines had failed. It continued:

"Vessel were drifting southward about forty-four miles a day due to strong wind rough to very rough sea she also rolling/pitching heavily sometime. Ship's engineers are trying to have damaged parts repairs and estimated another four-five days more. Radio equipment have also problem and very difficult to send/receive messages.

We will regularly keep you informed and we regret for this unexpected circumstance."

The vessel never arrived in Dakar and no trace of her or her cargo has been found. All that is known with certainty is that the cargo was loaded on the vessel at the load port but did not arrive at the discharge port. On the face of it, therefore, the cargo was totally lost in circumstances prima facie covered by the All Risks policy.

The claimants claimed for its loss under the policy on 19 May 1999. After investigation, the defendants declined liability on 17 August 1999 on the sole ground that the vessel was unseaworthy. The defendants initially indicated in correspondence that they would appoint solicitors to accept service within the jurisdiction. However, the defendants then equivocated. On 18 January 2000 Mr Justice Toulson granted the claimants permission to issue and serve the Claim Form on the defendants out of the jurisdiction in Thailand where service was belatedly effected after the documents had been transmitted through diplomatic channels on 16 July 2001.

On 17 August 2001 the defendants applied to set aside the order of Toulson J on the grounds that (a) there was no serious issue to be tried between the parties and (b) Thailand was the more appropriate forum for trying the claim.

The principle point taken under ground (a) was one which was largely taken upon the basis of the claimants' own evidence in support of the application to serve out. In the witness statement of Mr Blows, the claimants' solicitor, dated 5 January 2001 under the heading 'The Circumstances of Loss', having set out the history of the loading aboard, and the voyage of, the vessel, he stated as follows:

"22. In July 1999 my firm's Paris office was instructed by the claimants in relation to this matter. I am informed by Ms Borssan of that office and believe that she sought to make enquiries in relation to the cargo, in particular, the m.v. "PRESTRIOKA". Those enquiries have yielded the following information. From documents supplied to the claimants by ICL Trading Co Ltd on 2 April 1999, it appeared that the vessel was registered in Honduras [p.87]. Ms Borssan tells me, and I believe her, that she has endeavoured to make enquiries of the Honduras Registry in relation to the vessel but they have repeatedly failed to respond, the company which purports to own the vessel, Prestrioka Maritime Co Ltd, appears from the charterparty [p.68] to be Malaysian company. However, I am informed by Ms Borssan and believe that she asked my firm's Singapore office to make enquiries in relation to the company; their response, having instructed local lawyers, was that no record of it could be found at the Malaysian Companies Registries [p.88]. Ms Borssan thus informs me, and I believe, that it has proved impossible to find any record of the vessel or her owners. I also attach a copy of a fax from the same local employers, confirming that the vessel is not registered in Malaysia [p.89].

23. In the light of the above, I consider it likely that the Claimants has been the victim of a fraud by the shipowners, or by persons purporting to be the shipowners. It may be that the vessel on which the cargo was loaded was not the mv "PRESTRIOKA" at all, but some vessel purporting to be that vessel. But it appears whatever be the detailed circumstances of loss, that the cargo has been stolen. I attach a fax from the ICC-International Maritime Bureau confirming that the person involved in the "PRESTRIOKA" has disappeared [p.90]"

The letter exhibited stated:

"We came across [Prestrioka Maritime Ltd] whilst investigating an unconnected matter.

Mr Eddy Ng or a person with this false identity was involved in a case where the vessel has gone missing with the cargo. At that time the address used by Eddy Ng was – Room 1, 2 ^nd Floor, Wisma Boon San Tong, 49B, Wield Quay, Penang, 10300. Our investigator visited this address in May 1999. Mr Eddy Ng had rented this room for a short period and had moved on. Our investigator found some faxes relating to MV PRESTRIOKA at that address.

MV PRESTRIOKA has all the hallmarks of a phantom vessel. She is not actually registered in Honduras. We have been unable to locate Eddy Ng."

It appears that a 'phantom' ship or...