Chapter 4: Seaworthiness in Voyage Policies After analyzing rigorously the concept of seaworthiness, it is time to see the role seaworthiness plays in the voyage policies. Merkin R (2005, p.33)] s25 (1) MIA 1906 defines a voyage policy as where the subject matter under an insurance contract is insured “at and from” or from one place to another or further others. 4 a) the Marine Insurance Act 1906, 39 (1-3) Regulates the Seaworthiness in a Voyage Policy S 39 (1) of MIA 1906 states that, “In a voyage policy there is an implied warranty that at the commencement of the voyage the ship is seaworthy for the purpose of particular peril insured.” Further, s 39 (2) MIA 1906 states that, “Where the policy attaches while the ship is in port, there is also an implied warranty that she shall, at the commencement of the risk, be reasonably fit to encounter the ordinary perils of the port.” And further s 39 (3) MIA 1906 provides that, “Where the policy relates to a voyage which is performed in different stages, during which the ship requires different kinds of or further preparation or equipment, there is an implied warranty that at the commencement of each stage the ship is seaworthy I respect of such preparation or equipment for the purposes of that stage.” A very thorough encapsulation of the warranty of seaworthiness is provided by Parke B in Dixon v Sadler (1839) stating that, “… If the insurance policy attaches before the voyage commences, it is enough that the state of the ship be commensurate to the then risk; and if the voyage be such as
the perils of sea or not, but he can never make sure whether the assured will make the ship take off in a unseaworthy state. The Learned Author Sir Mustill terms this as an attractive argument and the one that conforms to the historically developed doctrine of implied seaworthiness. However He criticises this by saying that the assured is denied cover in suffering a loss due to the peril of the sea by the mere reason that the ship was unseaworthy at the commencement of the voyage, though the unseaworthiness at the commencement is not causative of the loss. I find my self totally in agreement with Sir Mustill and would endeavour to say that if the loss is due to an insured peril than the underwriters must be held liable to pay. The Marine Industry is very conservative in its approach to the Law of Marine Insurance hence change should come from the Parliament, thus I boldly comment here that it is high time that the subsection be amended and the principle of causation be included where if the ship suffers from an insured peril and that is not caused due to the unseaworthiness at the commencement the policy should not be allowed to be void. 4 d) Portworthiness The term Portworthiness is the invention of the Learned Author Hodges (1999, pp 302-303) which basically means that the vessel should be able to withstand the strains of the port. This is the logical meaning that flows from s 39 (2) and the section only bites impliedly though, if the policy attaches “at and from” to the vessel. The common law interpretation is based on the simple literal interpretation of s 39 (3) as evident in the case of Reed (AE) & Co v Page, Son & East Ltd (1927)Scrutton LJ held that, “It is enough if, before she sails, she has completed her equipment and repair. But she must be fit as a ship for the ordinary perils of lying afloat in harbour, waiting to sail. She must, in my view, be fit as a ship, as distinguished from carrying a warehouse, at each stage of her contract adventure, which may... commence before loading. ”
Reed (AE) & Co v Page & East Ltd [1927] 1 KB 743 Rio Tinto Co. Ltd v The Seed Shipping Co. Ltd (1926) 24 L1 L Rep 316 Smith v Faber [1893] 1 QB 340 Taylor Central Garages (Exeter) Ltd v Roper (1951) WN 383 The Eurasian Dream [2002] EWHC 118 (Comm); [2002] 1 Lloyd’s Rep 389 The Manifest Shipping Corp. v Uni- Polaris Insurance Co. Ltd and La Union Europee (The Star Sea) (2001) The Subra Valour [1995] 1 Lloyd’s Rep. 509 The Toledo [1995] 1 Lloyd’s Rep. 40 Thin v Richards and Co [1892] 2 QB 141 Thomas and Sons Shipping Co Ltd v The London and Provincial Marine and General Insurance Co Ltd (1913) 29 TLR 736 Thompson v Hopper (1856) 6 E & B 172 Turnbull & Others v Janson (1877) 36 LT 635 Virginia Cardina Chemical Co. v Norfolk SS Co. (no.2) (1912) 17 Comm Cas 277 Vortigern [1899] p.140 Wallis, Son & Wells v Pratt & Haynes [1911] AC 394 Australian cases Oleo Pty Ltd v Vonguard Insurance Co Ltd (1991) Supreme Court of Western Australia The Fireman’s Fund Insurance Co. v Western Australia Insurance Co. Ltd and Atlantic Insurance Co. Ltd [1927] 28 L1 L Rep 243 American Cases Asbestos Corp. Ltd. V Comapagnie de Navigation Fraissinet et Cypre En Fabre [1972] AMC 2581 CCR Fishing Ltd v British reserve Insuranve Co [1990] 1 SCR 814; [1990] AMC 1443 Huilever SA v The Otho [1943] AMC 210 Moores v Louisville Underwriters 14 Fed Rep 226