PRATT V AIGAION INSURANCE CO SA

[2008] EWCA Civ, Court of Appeal, Sir Anthony Clarke MR, Lord Justice Maurice Kay and Lord Justice Stanley Burnton, 27 November 2008

Insurance (marine) – Time policy on fishing trawler – Warranty requiring skipper and crew member to be on board at all times – Vessel catching fire with no crew on board – Whether breach of warranty

The claimant insured his fishing trawler with the defendant insurers under a policy which provided “'Warranted Owner and/or Owner’s experienced Skipper on board and in charge at all times and one experienced crew member.” The vessel was destroyed by fire at a time when nobody was on board. At first instance, the insurers were held to be entitled to rely upon the warranty, which was to be construed literally: although there were common sense limits on the wording, there was a breach in the circumstances. The Court of Appeal reversed this decision. The primary purpose of the warranty was to protect the vessel against navigation hazards, as was underlined by the reference to “one experienced crew member”. The warranty was designed to operate only at times when it was to be expected that two members of the crew would be on board. The phrase “at all times” was ambiguous and was to be construed contra proferentem against the insurers: it did not mean that there had to be a member of crew on board when the vessel was safely moored, even if the generator was running at the time.