Paper Example on Maritime Law and Marine Insurance

The Marine Insurance Act 2015 has laid most of the overall duty of the utmost good faith to the insuring party (Gauci, 2015). The duty of the insured is to provide all the necessary information that is deemed to be material risk to the insurer, whether such information is requested or not by the insurer. The onus regarding the disclosure of information is entirely on the insured. In the case of breach of such duty, the insurer is entitled to void the policy. Sections 18, 19 and 20 of the Marine Insurance Act is repealed under section 21(2) of Insurance Act 2015. Under section 3 of Insurance Act, 2015 requires the policyholders to disclose to the insurer all the material circumstances the insured ought to know and provide sufficient information to the insurer. However, the insured is not obligated to disclose claims that were underwritten in previous policy year under the same insurance policy. The changes in the insurance law will enable the insurers to take an active approach in assessing the risk they underwrite rather than relying on the insured. Under the new law, the insurers need to have sufficient understanding of the risks being underwritten; they will have to update their risk checks and keep records so as to maintain sufficient evidence on how they would have agreed to underwrite or refuse to cover the risk had the undisclosed information had been presented before. On the insured party, the new law requires them to undertake reasonable checks they are able to make in order uncover material circumstances in which insurers need to be informed on.

A warranty is a former term used in the insurance policy to discharge the insurer from liability on a permanent basis even under the circumstances of the breach of warranty is later remedied by the insured. It is a promissory term of the policy. A warranty may be expressed or implied. The warranty of neutrality is applied in a situation where there is an express warranty of neutrality in respect to the insurable risk. The warranty is used to define the express warranty of neutrality. The seaworthiness and legality warranties are implied in that they will form parts of contracts in marine insurance unless they are deemed inconsistent with the express warranty. The expressed warranties such as the private pleasure, towing, and navigation warranties are limited by the ingenuity of the underwriters. In the event that such warranties are breached, the Marine Insurance Act 2015 entitles the insurer to avoid the claims laid in the policy as from the date of breach. The basis of the contract clauses is abolished in the Act. This implies that the insurer is discharged from liabilities in cases where the proposal form contains statements that are inaccurate. Under the Act, the section 11(1) will be applied to conditions precedent on condition that they apply a particular type of loss. Under the Act 2015, breach of policies will be taken as remedied, the risk to which the warranty relates will essentially be the same as those contemplated by the parties. However, the Act anticipates that there will be some situations where some of the breaches cannot be remedied.

The bearer of the risk of the damage is largely dependent on the governing terms of the charter party and on who and what had caused the damage amongst the charter and the owner of the ship. It was in the knowledge of the parties involved with exception of the Master of the Vessel that the Cold Port was only accessible to a vessel of Ocean Girls size on Spring tides only. This information was not put in the guide to Port entry thereby absolving the Master of the Vessel of a direct breach of the safe port warranty. The decision by Master to leave the port was not negligent. However, the conditions that affected the Ocean Girl were in no way an abnormal occurrence. Therefore, there was a breach of the safe port undertaking in the charterers part.

In the case similar to this, Gard Marine and Energy Limited v. China National Chartering Company Limited and others (Ocean Victory) [2017] UKSC 35 handed down on 10 May 2017, the Supreme Court found that in an event that there is a breach of the safe port warranty, the provisions for joint insurance in clause 12 of the Barecon 89 contract precludes the rights of owners to recover in respect of losses covered by hull insurers against the demise charterers and right of subrogation of hull insurers for the breach of safe port warranty clause.

In the above case scenario, it is clear that it was the nature of the individuals component danger that gave rise to the grounding of the vessel. It was foreseeable that such event was possible to occur at the port in question. The owner is responsible for the losses caused by avoidable dangers through good seamanship and navigation by the Master and his crew (The EASTERN CITY (1958)2 Lloyd's Rep. 127). Therefore, claims would not be entitled to Paul in respect of the losses covered by the hull insurers, Coverit Insurance.

The Evia (No 2) [1981] Lloyds Rep 613 stated that the formulation of a test whether the port is unsafe must assume normality, and must, therefore, exclude danger caused by some abnormal occurrence. This undertaking assumed normality in the event of safety when the vessel arrives in the future. The fact is that Ocean Girl arrived two days earlier engaged to render assistance to her.

It is imperative to comprehend that in the instance of marine insurance, there are various interests that arise from different levels from the charterers, cargo owners, investors, and ship owners. Regarding the charters party, whether it is a time charter party or voyage, it is the charterer that has to express or simply to nominate a safe port. In the instance that a vessel suffers damage while entering a port, staying there or leaving due to various reason, then there is a question on the party that has to take the risk of the damage. A charterer may incur liability or the damage that was caused by the cargoes carried during the charter period. In the instance of Ocean Girl, it is the nature of the incident and the different interest parties that are involved that can bring claims by the ship-owner and the various other cargo owners as well as third parties in the instance of oil spills.

Although circumstances may vary in a great deal especially if the charterer or the shipper is aware of the dangerous nature of the cargo on board the vessel, there is a general rule that one is under an absolute obligation to notify the carrier (Vance, 1911). It is through the notification of the goods on board that serves the purpose of informing the carrier of the dangerous nature of goods so that the carrier can take precautions in the bid to enforce safe carriage or rejects the cargo in the instance that they are not obliged to carry the cargo. There is also a wide range of other P&I related liabilities when there is a failure to nominate a safe pert that may result in dangerous situations for the vessel. In the instance of Ocean Girl, the concept of a safe port was duly noted. They should have seen a tug to guide the vessel to port. However, the timing of the arrival time of the vessel should have been clearly indicated. There was a failure on both sides and as a result, both parties should take responsibility for the damage caused by the delay in guiding the vessel to port. The fact that the port where the vessel was supposed to dock was not clearly indicated in the contracts mean that the ship arrived earlier than anticipated. There was also an issue of negligence on the part of the ship captain. When the ship captain decided to go and have a drink at the pub, there was a clear understanding that the port was not safe. It was the responsibility of the carrier to ensure that the goods were safe on the seas (Hodges, 2012). By utmost good faith, the captain of the ship should have been able to the waist for the tugs since they were eventually provided. The time of arrival as stipulated means that the owners of the vessels will be entitled to damages if the master reasonably obeys the charterers order (Fletcher, 1984).

In conclusion, the onus regarding the disclosure of information is entirely on the insured. In the case of breach of such duty, the insurer is entitled to void the policy. Sections 18, 19 and 20 of the Marine Insurance Act is repealed under section 21(2) of Insurance Act 2015. The bearer of the risk of the damage is largely dependent on the governing terms of the charter party and on who and what had caused the damage amongst the charter and the owner of the ship. It was in the knowledge of the parties involved with exception of the Master of the Vessel that the Cold Port was only accessible to a vessel of Ocean Girls size on Spring tides only. In the above case scenario, it is clear that it was the nature of the individuals component danger that gave rise to the grounding of the vessel. It was foreseeable that such event was possible to occur at the port in question. The owner is responsible for the losses caused by avoidable dangers through good seamanship and navigation by the Master and his crew. Under the Act, the section 11(1) will be applied to conditions precedent on condition that they apply a particular type of loss. Under the Act 2015, breach of policies will be taken as remedied, the risk to which the warranty relates will essentially be the same as those contemplated by the parties. This information was not put in the guide to Port entry thereby absolving the Master of the Vessel of a direct breach of the safe port warranty. The decision by Master to leave the port was not negligent.

References

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Fletcher, W.A., 1984. The General Common Law and Section 34 of the Judiciary Act of 1789: The Example of Marine Insurance. Harvard Law Review, pp.1513-1580.

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Vance, W.R., 1911. The History of the Development of the Warranty in Insurance Law. The Yale Law Journal, 20(7), pp.523-534.

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