Case details

Sveriges Anfgartygs Assurans Forening (The Swedish Club) and others (Appellants) v Connect Shipping Inc and another (Respondents)

Case ID: UKSC 2018/0054

Case summary

Issue(s)
  1. Was the CA right to conclude that the Respondents did not have ‘reliable information of the loss’ by 1 February 2013 for the purposes of s.62(3) Marine Insurance Act (‘MIA’);
  2. Was the CA right to conclude that the Respondents served NOA with ‘reasonable diligence’ following 25 January 2013 for the purposes of s.62(3) of MIA;
  3. Can costs incurred prior to NOA rank towards the calculation of CTL for the purposes of s.60(2) (iii) of MIA; and
  4. Can Special Compensation Protection and Indemnity Clause (‘SCOPIC’) costs rank towards the calculation of CTL for the purposes of s.60(2)(iii) of MIA.
Facts

In August 2012, the Vessel was on a laden voyage in the Red Sea when a fire broke out in the engine room causing extensive damage. The Vessel was owned by the First Respondent and managed by the Second Respondent. The Appellants were the hull and machinery insurers of the Vessel. The first Appellant, the Swedish Club, was the lead insurer and also the insurer under an increased value policy. The insured value of the Vessel was USD12 million and the increased value insured was USD 3 million. It was agreed that the fire was an insured peril. On 1 February 2013, the Respondents purported to give a Notice of Abandonment of the Vessel to the Appellants and claimed that it was a constructive total loss (‘CTL’) on the grounds that the cost of repairing the damage would exceed the insured value. The Appellants contended that the Vessel was not a CTL and that in any event the Respondents had lost the right to abandon the Vessel and claim CTL. The Appellants’ case was that the Owners could only claim on a partial loss basis, reflecting the diminution in the Vessel's value as a result of the fire, which was agreed to be USD1,422,687.50. The Insurers also disputed the amount of sue and labour expenses to which the Owners were entitled. Knowles J at first instance found for the Respondents. This decision was upheld by the Court of Appeal.

Judgment appealed

[2018] EWCA Civ 230

Parties

Appellant(s)
  1. Sveriges Anfgartygs Assurans Forening (The Swedish Club);
  2. Reaal Schadeverzekeringen NV;
  3. The People’s Insurance Company of China (PICC) Property & Casualty Co Ltd; (4) Warta SA Insurance and Reinsurance Company
Respondent(s)
  1. Connect Shipping Inc;
  2. Machrimar Management SA

Appeal

Justices

Lord Reed, Lord Hodge, Lord Lloyd-Jones, Lord Kitchin, Lord Sumption

Hearing start date

10 Apr 2019

Hearing finish date

11 Apr 2019