Soya G.m.b.H. Mainz Kommanditgesellschaft v White (Corfu Island, Teviotbank, Welsh City)
| Jurisdiction | England & Wales |
| Judge | Lord Diplock,Lord Keith of Kinkel,Lord Scarman,Lord Roskill,Lord Templeman |
| Judgment Date | 09 December 1982 |
| Judgment citation (vLex) | [1982] UKHL J1209-3 |
| Date | 09 December 1982 |
| Court | House of Lords |
[1982] UKHL J1209-3
House of Lords
Lord Diplock
Lord Keith of Kinkel
Lord Scarman
Lord Roskill
Lord Templeman
My Lords,
The only question that your Lordships need to decide in this appeal is a short question of construction of the following words—"This insurance is to cover against the risks of heat, sweat and spontaneous combustion only" appearing in a contract of marine insurance upon bulk cargoes of soya beans shipped from Surabaja in Indonesia to ports in Belgium and the Netherlands.
In the earlier stages of this case there were complex issues of disputed fact which resulted in hearings in the Commercial Court (Lloyd J.) and the Court of Appeal (Waller, Donaldson and O'Connor L.JJ.) occupying 14 days and five days respectively. Upon all disputed facts there are concurrent findings by the courts below, except as regards an issue of causation on which the Court of Appeal differed from the learned judge. The correctness of this latter finding by the Court of Appeal, however, which is still disputed by the respondents ("the Assured"), does not arise in the view that I take, in common with your Lordships, on the question of construction. Accordingly, no argument on either side has been heard about it.
The policy issued in the instant case is in a standard form in general use on the London marine insurance market known as a HSSC policy from the initial letters of the risks covered by it. Its construction is thus a matter of more general importance than its application to the particular facts of the instant case; that was why this House gave leave to appeal. With great respect to Donaldson L.J., who made lengthy citations from the judgments given at first instance and in the Court of Appeal in Sassoon (E.D.) & Co. Ltd. v. Yorkshire Insurance Company (1923) 14 Ll.L. Rep. 134, 16 Ll.L. Rep. 129, I do not think that any assistance is to be gained either from that case or any of the others that he referred to in his judgment, or that have been cited to us by counsel for the appellant ("the Insurers") in this House. In my opinion, the question for your Lordships can be decided upon first principles of construction of documents and marine insurance law.
For the purpose of determining the question of construction, the relevant facts may be summarised as follows:
(1) It is a natural characteristic of soya beans when shipped in bulk that if the moisture content of the bulk exceeds 14 per cent, micro-biological action, the nature and causes of which are unknown, will inevitably cause the soya beans to deteriorate during the course of a normal voyage from Indonesia to Northern Europe to an extent which will considerably reduce their value on arrival.
(2) Between a moisture content of 14 and 12 per cent, below which latter percentage no micro-biological action apparently occurs, there is a risk that deterioration from this cause may take place in the course of such a voyage. Whether it does or does not depends upon factors that remain unknown. The range of moisture content between 14 and 12 per cent is conveniently referred to in the judgments below as the "grey area"; and I too, will adopt this term.
(3) The soya beans, the subject-matter of the HSSC policy in the instant case, had a moisture content of between 13 and 12 per cent, i.e. within the grey area. Micro-biological action did in fact take place upon the voyage as a result of which the beans were discharged in a heated and deteriorated state.
(4) No incident was shown to have occurred upon the voyage whereby the moisture content present in the bulk on shipment had been increased from any external source.
(5) The shipments were also covered by an ordinary SG policy against perils of the sea. It happened to be a FPA and not a WA policy; but the fact that it was insured "free of particular average" and not "with average" is not, in my view, material to the question of construction.
(6) The fact that the upper and lower limits of moisture content which constituted the grey area for bulk shipments of soya beans from Indonesia to Northern European ports were 14 and 12 per cent respectively, was not known to the Assured and the insurers at the time the policy was taken out; but what was known to both parties was that soya beans shipped from Indonesia were liable to have a moisture content upon shipment that made them subject to the risk that deterioration might take place in the course of a voyage in consequence of heating and sweating from some cause, the occurrence of which was unpredictable and the exact nature of which, save that it was micro-biological, was unknown.
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