Lloyd's Maritime and Commercial Law Quarterly
ENGLISH MARINE INSURANCE AND GENERAL AVERAGE LAW
James Davey*
CASES
109. Atlasnavios-Navegação Lda v Navigators Insurance Co Ltd (The B Atlantic) 1
Detention of vessel—narcotics—malicious act—customs infringement exclusion—proximate cause—sue and labour
The assureds were owners of a vessel insured under a policy incorporating the Institute War and Strikes Clauses (Hulls-Time) (1/10/83). The vessel was detained in Venezuela following the discovery of illicit drugs, and the master and second officer were charged with and convicted of drug-trafficking. Note that, for the purposes of these proceedings, the convictions of the crew members were assumed to be unsafe.2 No allegations of complicity having been raised against the vessel owners, local law provided for the vessel’s release, but the detention was maintained. The vessel’s owners claimed for a constructive total loss under the standard cover for malicious acts but the insurers invoked the policy exclusion (under the Institute clauses, cl.4.1.5) in respect of loss “arising from … detainment … by reason of infringement of any customs … regulations”.
At first instance, Flaux J held that limitation of cover in cl.4.1.5 was itself limited by the cover for malicious acts, such that breaches of customs regulations arising out of a malicious act would not fall within the exclusion clause.
Decision: Appeal allowed. An operative cause of the loss fell within the exclusion clause (4.1.5).
Held: (1) In determining the proximate cause of the loss, the court is considering the “causative potency” of key events.3 Where two distinct events (A and B) are to be considered, there are two possible outcomes: either (i) A or B may be the sole proximate cause; or (ii) both A and B may be proximate causes (either because both were required to cause the loss, or because either would have caused the loss). If either was an excluded peril then the underwriter is not liable.4 (2) Properly construed, the loss on the facts was
* Professor of Insurance & Commercial Law, University of Southampton. The following abbreviation is used: MIA 1906: Marine Insurance Act 1906.
1. [2016] EWCA Civ 808; [2016] 2 Lloyd’s Rep 351; [2016] Lloyd’s Rep IR 565; rvsg [2014] EWHC 4133 (Comm); [2015] 1 Lloyd’s Rep 117; [2015] Lloyd’s Rep IR 151; [2015] 1 All ER (Comm) 439 (Flaux J); digested [2015] IMCLY § 97.
2. At [7].
3. At [23].
4. At [24–26].
English Marine Insurance and General Average Law
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