Supreme Court decision on insured perils and excepted perils under the Institute War Clauses

Colin Edelman QC acted for the underwriters in Atlasnavios v. Navigators Insurance (the “B Atlantic”) and in the Court of Appeal but not at the trial.

On 13 August 2007 the vessel “B Atlantic” was detained in Lake Maracaibo, Venezuela. The ship contained a cargo of coal, destined for shipment to Italy, when during a second divers’ inspection some 132kg of cocaine was discovered attached to the vessel’s hull. The vessel was detained and thereafter abandoned by her Owners, who claimed for a constructive total loss and for sue & labour expenses under war risks cover.

The Supreme Court dismissed the Appeal, although for different reasons than in the Court of Appeal, concluding that (contrary to the common ground between the parties at the trial and thereafter) the vessel’s loss was not caused by “any person acting maliciously”. It was caused simply by detainment. The Supreme Court further found that if it had been possible to view the loss as caused by a person acting maliciously, it would still have been excluded as arising, at least concurrently, from detainment by reason of infringement of customs regulations.

For the full judgment click here

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