Delos Shipholding SA & others v Allianz Global Corporate and Specialty SE & ors [2024] EWHC 719 (Comm)

25 March 2024

Ø   Marine war risks insurance

Ø   “Illegal parking” in territorial waters without permission

Ø   Constructive total loss

Ø   Detention by governmental authorities

Ø   Exclusion of cover for “arrest under customs or quarantine regulations or similar arrest, restraint or detainment”

Ø   Duty to sue and labour (s 78(4) Marine Insurance Act 1906)

Ø   Duty to make fair presentation of the risk (s 3(1) Insurance Act 2015)

Ø   Duty to pay within a reasonable time (s 13A Insurance Act 2015)

Mrs Justice Dias held:

·             Unprecedented seizure and detention of a vessel by Navy for “illegal parking” in the territorial waters without permission is an insured peril in marine war risks policy.

·             The exclusion of “arrest, restraint or detainment under customs or quarantine regulations and similar arrests, restraints or detainments not arising from actual or impending hostilities” does not extend to detention by Navy.

·             Unreasonable conduct is one of the requirements for breach of “sue and labour” duty (s 78(4) MIA 1906).

·             It was not unreasonable for owners to engage in commercial settlement negotiations with the Navy for release of the vessel, which ultimately worsened the condition.

·             Charges pending against a nominee director of the insured is a material fact that must be disclosed to the insurer (obiter).

·             However, no breach of the duty to make a fair presentation of the risk to the insured by non-disclosure of the charges where not known to the owners and those controlling the owners (s 3(1) IA 2015).

·             A claim against an insurer for damages for failure to pay within a reasonable time requires proof of the damages suffered and that it was “unreasonable” for the insurer to dispute the claim (s 13A IA 2015).

The London Steam-Ship Owners’ Mutual Insurance Association Ltd v Trico Maritime (Pvt) Ltd, Ms LDP Thisari Senanayake, Mr SDK Prasanna, Mr TMJNM Tennakoon and Ms TN Aluthwaththa [2024] EWHC 884 (Comm)

23 April 2024

Ø   Third parties’ direct claims against P&I clubs

Ø   “Pay to be paid” clause

Ø   Anti-suit injunction

Bright J held:

·             A cargo claimant suing directly the vessel’s P&I club as the insurer in a foreign jurisdiction in respect of the club’s liability arising from the indemnity insurance contract between the vessel owners and the club, will be met with an anti-suit injunction in England, at the instance of the club, unless there is a good reason to refuse the anti-suit injunction, when the indemnity insurance contract is subject to an English arbitration clause.

·             If a third party, like the cargo claimant, has a right a right to make a direct recovery claim against the club as the insurer, that right is subject to terms of the indemnity insurance contract including an arbitration clause there – that is the “benefit and burden” principle or the principle by which “the obligation to arbitrate is a legal incident of the right asserted”.

·             Delay in the club making the application for the anti-suit injunction is a factor that the court will consider when determining if there is a good reason to refuse the relief.

·             If there is a delay but the foreign proceedings have not so advanced that an anti-suit injunction will materially interfere with the foreign proceedings, then the delay is not a good reason to refuse the relief.

·             A pending application by the club in the foreign court to stay the proceedings is a relevant factor to consider when determining if there is a good reason to refuse the relief.

·             However, if the club has taken steps to withdraw the application in the foreign court, even if such steps are taken after an ex parte injunction is granted by the English court, then the pending application in the foreign court is no longer a good reason to refuse the relief.

·             The fact that the foreign claimant does not appear before the English court and state any good reason to refuse the relief is a factor that the court may take into account in deciding there is no such good reason to refuse the relief.

·             “Pay to be paid” clause constitutes a condition precedent to the liability of the club and hence a complete defence to any action against the club before the insured pays the full amount of the liability, costs and expenses – that bars any third party claims directly against the club.

Procedural Observation:

·             In this case, Bright J gave an ex parte interim injunction, that was continued on the return date by Henshaw J, and the final injunction and a declaration of the effect of the “pay to be paid” clause was given again by Bright J.

·             The club filed an arbitration claim for the final relief and, together with that, an application for an ex parte interim injunction, which was granted with a 14-day return date. At the return date, the continuation application was allowed, and subsequently in an expedited trial, the final injunction and the declaration were granted.