Validaciones sobre datos dinámicos de bajas de inmuebles: F14212

The old SG Form, which had come into use since 1779 until 1980s, amplified its coverage by the following phrase:

… they are of the seas, men of war, fire, enemies, pirates, rovers, thieves, jettisons, letters of mart and countermart, surprisals, takings at sea, arrests, restraints, and detainments of all kings, princes, and people, of what nation, condition, or quality soever, barratry of the master and mariners, and of all other perils, losses, and misfortunes, that have or should come to the hurt, detriment, or damage of the said goods and merchandises, and ship, to the charges whereof… It seemingly provided the cover against typical marine risks, war risk and all other related perils in the absence of an express provision in respect of exclusions. An analogy can be drawn between the wordings of the SG Form and the definition of “maritime perils” provided by the 1906 Act as above-cited. The open words “all other perils” does not mean the scope is as wide as it has appeared to be.204 _{In the ancient case of Cullen v Butler,}205 _{the ship and}

its cargo, which were insured under the common form, were fired upon by another ship by mistaking it as an enemy ship and sunk at sea. The question before the court was whether this was a loss covered by the policy, on the count of “perils of the seas,” or under “all other perils”. It was held that this particular circumstance fell in the “all other perils” category, but not perils of the sea. Although the Court had recognised it was damage at sea by collision, the case could not be attributed to the perils of the seas due to its limited construction. In terms of “all other perils”, Lord Ellenborough addressed these broad and general words as in the following paragraph, which is worthy citing in length:

The extent and meaning of the general words have not yet been the immediate subject of any judicial construction in our Courts of Law. As they must, however,

203 _{The Law Commission, Insurance Contract Law: Post Contract Duties and other Issues}

(Consultation Paper No 201, 2011) 172, available at

http://lawcommission.justice.gov.uk/areas/insurance-contract-law.htm (last time accessed 11/05/12)

204 _{Supra 82, Vol. 2 p 20469} 205 _{(1816) 5 M & S 461}

be considered as introduced into the policy in furtherance of the objects of marine insurance, and may have the effect of extending a reasonable indemnity to many cases not distinctly covered by the special words, they are entitled to be considered as material and operative words, and to have the due effect assigned to them in the construction of this instrument; and which will be done by allowing them to comprehend and cover other cases of marine damage of the like kind with those which are specially enumerated and occasioned by similar causes.

This statement has in essence adopted a literal and contextual approach, which was also known as “noscitur a sociis” and “ejusdem generis”. On the one hand, the other perils should embrace the circumstances more/other than the preceding itemised ones. On the other hand, its meaning is to be confined within the scope of the similar class. This interpretation has been followed by numerous leading cases206 _{and has even been reflected in the English}

Marine Insurance Act 1906. In accordance with Sch. 1 r. 12 of the 1906 Act, the open words ‘all other perils’ herein refers only to perils similar in kind to the perils specifically mentioned in the policy.

Moreover, although the SG Form did not contain an exclusionary provision in itself, after the enactment of the 1906 Act, the insurer’s liability is limited by the exceptions enumerated under S 55(2) including wilful misconduct, delay, and internal causes of the subject-matter insured. Also, the parties may place an insurance cover in the SG Form in conjunction with an agreement particularly excluding certain perils listed in the SG Form such as war risks; and this modification prevails over the original clauses in the Form. This operation is quite popular by virtue of a series of standard terms established by the Institute of London Underwriters since 1884. Thus, the coverage of the SG Form used to include marine risks and war risk and their similar kind, subject to the statutory exceptions and the parties’ contrary agreement.

After the old SG form was replaced by the modern institute clauses in 1980s, the basic division of these policy forms is between those risks in the basic hull, freight and cargo clauses, which are practically known as “marine risks”, and the separated risks relating to war and strikes.207

Hulls and machinery are usually insured by one of the Hull Clauses including Institute Time Clauses Hull 1982 (Cll 6–8) or 1995, Institute Voyage Clauses Hulls (Cll 4–8) and International Hull Clauses 2003 (Cll 2–6) with or without amendments subject to the assured’s demand. The International Hull Clauses are divided into three parts: part one

206 _{Butler v Wildman (1820) 3 B. & Ald. 398; West India Telegraph Company v. Home, &c.,}

Insurance Company (1880) 6 Q. B. D. 56; The Inchmaree (1887) 12 App. Cas. 484; The Xantho (1887) 12 App. Cas. 509

contains the principal insuring conditions; part two presents a range of additional clauses that were frequently required by assureds and added to ITC separately. Part three contains provisions for claims handling and sets out the rights and responsibilities of underwriters and assureds. These standard forms notably provide cover under four heads, namely, the loss caused by traditional “marine risks”, the Inchmaree Clause, liabilities arising from collision and pollution hazard and aversion and minimisation of loss.

In comparison, the Institute Freight Clauses, Time (Cl. 7) and Voyage (Cl. 5) embrace basically the same content as the Hull Clauses with common exclusions of discord (war and strike) risks and malicious acts and nuclear explosions.

In respect of cargo policies, there are three forms with differentiated range of coverage, which are Institute Cargo Clauses A, B and C (1982 or 2009). The Institute Cargo Clauses (A), which is also known as “all-risks” policy, contains such an extreme comprehensive phrase that the underwriters are basically liable for all fortuitous events except for a few named ones. Institute Cargo Clauses (B) and (C) provide covers on a named peril basis, in which a list of insured perils are specified in Cl. 1; however, Form (C) contains a narrower cover than Form (B).

It can also be observed that these modern forms of policy adopt two main manners to describe the scope of liability: either the insured and excluded perils are both itemised or the insured scope is entitled as “all risks” with exceptions itemised. Evidently, it is radically simpler in ascertaining the coverage in the first occasion in comparison with the latter. Notwithstanding comprehensive cover, it can still be defined by courts by adopting a sound method.

A few conventional approaches are regularly adopted by English courts in marine insurance cases, which may be in a sequential manner. Initially, courts attempt to construe the contract terms in line with the intention of the two parties, which may reflect the commercial sense. It should be emphasised that this approach aims not to find the expectation of one side with a judicial preference. Moreover, a literal interpretation of the wordings may also be pursued. If the terms are provided by the insurers where the conditions are satisfied, a less favourable construction against the insurer may occur by following the principle contra proferentem. Sometimes, as a last resort, the courts may simply conclude and attribute the issue to a question of fact in a particular case.

In general, the UK courts’ attitude in ascertaining the proximate cause relies on an indication of what commercial men would have expected, notwithstanding that the UK courts seems to unsurprisingly show a tendency to favour the assureds. In some cases concerning life insurance as well, some courts when seeking a particular result will resort to

contra proferentem, which derives from the Latin literally to mean "against (contra) the one bringing forth (the proferens)", to take a strict approach against insurers and go so far as to interpret terms of the contract in favour of the other party, even where the meaning of a term would appear clear and unambiguous on its face. It seems that English courts do not equally support that approach in the modern marine insurance context. Freedom of contract has consistently been upheld by the English courts, and it has been suggested that English courts have adhered to the idea to construe the ambiguous term according to the reasonable expectations of the assured and insurer in the commercial sense more than adopting contra proferentem.208 _{It is even suggested that the English courts put priority on}

construing the risk coverage in policies by means of the contractual intentions of the parties in particular with the awareness of the insurer.209 _{Nevertheless, in principle, both the}

coverage clause and exception clause are intended to be interpreted in a rational and broad way before the courts, no preference is granted to either party.

The question of construction merely arises where a provision in the policy contains ambiguity and the parties in dispute maintain opposite understandings and explanations. For instance, for the doctrine of contra proferentem, as Lindley LJ stated in Cornish v Accident Insurance Co,210

…in a case of real doubt, the policy ought to be construed most strongly against the insurers; they frame the policy and insert the exceptions. But this principle ought only to be applied for the purpose of removing a doubt, not for the purpose of creating a doubt, or magnifying an ambiguity, when the circumstances of the case raise no real difficulty.

It has been doubtful whether the perils specified in exclusion clauses are ambiguous, as the mutual intention of the parties is quite self-evident: NOT COVERED. The exclusions seem more concerned with the legal meanings of the perils instead of the construction of the clause itself. There should not be a dispute as to whether such a peril is insured or not, but it merely requires a judgment on whether the scenario in question amounts to one of the so- defined perils. The process of classifying the incident in dispute under a type of peril is invariably tangled with definitions and interpretations by virtue of the approaches mentioned above. Therefore, these approaches are important in causation terms in order to enlarge or narrow down the scope of the covered situations and their effect will be demonstrated in the following research on the typical marine perils.

208 _{Supra 182. The New Zealand court also adopted the same approach in Trustees Executors}

Ltd v QBE Insurance (International) Ltd (2010) 16 ANZ Insurance Cases ¶61-832.

209 _{Supra 86, p 82}