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CONSTRUCTION OF COMMERCIAL CONTRACTS, MARINE CARGO INSURANCE

Lloyd's Maritime and Commercial Law Quarterly

CONSTRUCTION OF COMMERCIAL CONTRACTS, MARINE CARGO INSURANCE John Dunt * Swashplate v Liberty Mutual In Swashplate Pty Ltd v Liberty Mutual Insurance Co (Trading as Liberty International Underwriters) , reversing the decision of Allsop CJ, 1 the Full Court of the Federal Court of Australia 2 upheld a marine insurance claim for damage to a cargo of machinery, which consisted of a helicopter and its dismantled parts in a container. The decision of the Full Court can be seen as no more than an unusually difficult exercise in the application of the general rules of construction relating to commercial contracts. However, the way the case was resolved derives from the law and practice of marine insurance. In particular, the decision turned on the fact that cargo insurance under the Institute Cargo Clauses (“ICC”) is, by its nature, fundamentally a voyage insurance and should normally be construed on the basis that the parties intended to cover the whole transit. This is consistent with the role of the ICC as the direct successors to the Lloyd’s SG form of policy, which insured the “adventure”. The decision is also the first reported case on the operation of the significantly * Visiting Fellow, Institute of Maritime Law, University of Southampton. 1. [2020] FCA 15; [2020] 1 Lloyd’s Rep 592. 2. [2020] FCAFC 137; [2020] 2 Lloyd’s Rep 545. Case and comment 21

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