All risks insurance

In Global Process Systems Inc & Anr v Syarikat Takaful Malaysia Berhad [2009] EWHC 637 (Comm), the Court of Appeal has dealt a blow to insurers by narrowing the scope of the ‘inherent vice exclusion’ and in so doing cast doubt on the decision in Mayban General Insurance v Alstom Power Plants [2004] 2 Lloyd’s Rep 609 . The Court of Appeal, reversing the first instance decision of Blair J, discussed in the August 2009 issue of Insurance Law Monthly, has found that the crucial question is not what might be reasonably foreseeable as the ordinary incidents of a sea voyage but what would be bound to occur in the course of a voyage of the type being undertaken at the time that the loss eventuates. The case is discussed by David Turner QC and Clare Dixon of 4 New Square.

Global Process Systems: the Facts

Cendor MOPU was an offshore oil rig. It consisted of a working platform which could be raised and lowered on the rig’s three legs according to the depth of the sea in which the rig was positioned. The legs each weighed about 404 tons and were about 300 ft in length.