Page 23 - Insurance Times July 2024

weather reasonably to be expected.” In his judgment this had held that the gloves deteriorated because of their
meant that the cause of the loss was inherent vice within natural behaviour in the ordinary course of the
the meaning of the policy and that accordingly the insurers contemplated voyage, without the intervention of any
were not liable for the claim. fortuitous external accident. In particular, Bingham LJ noted
that the temperature in Calcutta and on the vessel’s arrival
One of the arguments advanced by the assured at the trial in Rotterdam had not been unusual.
was that the loss resulted from the failure to effect
adequate repairs at Saldanha Bay. This argument too was Insurers argued that if the ordinary, but not inevitable
rejected by the trial judge, on the grounds that the loss temperatures in Calcutta and Rotterdam did not constitute
occurred despite the repairs and not because of them. The a fortuitous external accident, it must follow that the
assured did not challenge this conclusion. ordinary but not inevitable wave conditions off South Africa
were equally irrelevant.
This judgment was overturned on appeal. Waller LJ, giving
the leading judgment in the Court of Appeal, stated that This argument was rejected by the Supreme Court. While
the test to be applied was not whether the rig had been four consistent reasoned judgments were given, the most
capable of withstanding the weather which was reasonably instructive is that of Lord Mance. An inherent vice of the
to be expected on the voyage but rather, whether she was cargo was not considered to be a concurrent cause of the
capable of withstanding such weather as was bound to loss. The loss came from an external agent, the stress
occur. As Blair J had found that the loss was not bound to imposed to one leg by the sea -in a form of a breaking leg
occur, it followed that it did not fall within the exclusion. breaking wave, which produced the falling of the two
remaining legs. It was also stated by Lord Mance that perils
On appeal to the Supreme Court, both parties disavowed of the sea and inherent vice are exclusive perils, they may
the ‘bound to occur’ test. Insurers argued that the test was not appear together as proximate causes in a loss. A peril
too narrow while Global argued that the exclusion should of the sea is to be considered a paramount provision, the
only apply where loss was caused by something internal to only proximate cause of the loss.
the cargo and that, accordingly, where external conditions
were the effective cause of the loss, the exclusions should Lord Mance also considered that the exclusion of inherent
not apply, irrespective whether those external conditions vice is to be considered as a limitation of cover and not as a
were bound to occur. The Supreme Court on February 1, concurrent cause of exclusion. In this case it was common
2011, unanimously dismissed the appeal. The essential ground that the immediate cause of the damage to the
question in this case for the Supreme Court was one of cargo was the violent movement of the vessel due to actions
causation: the loss was caused by an inherent vice in the of the wind and sea, but that also the cargo (the
legs, or as a consequence of peril of the seas, or the transformer) was not able to withstand the ordinary
concurrent two competing causes. conditions of the wind and sea. If the conditions encountered
by the vessel were not more severe than could reasonably
In his conclusion, Lord Saville reminded the definition of have been expected, the conclusion must be that the real
inherent vice or nature of the subject matter insured by Lord cause of the loss was the inherent inability of the goods to
Diplock in Soya Gmbh Mainz Kommanditgesellschaft v White withstand the ordinary incidents of the voyage. This was the
[1983]. ‘The risk of deterioration of the goods shipped as a test applied by Blair J in the Commercial Court decision for
result of their natural behaviour in the ordinary course of The Cendor MOPU.
the contemplated voyage without the intervention of any
fortuitous external accident of casualty.’ Although at the hearing his Lordship appeared to recognise
the difficulty of distinguishing, on the one hand, the effects
In support of this argument, Insurers cited various cargo on a cargo of temperature and atmosphere, and on the
cases. A particular significance was given to T M Noten BV other, the effects of wind and waves, in his judgment; he
v/s Harding [1990] Lloyd’s Rep 283 in which industrial leather analysed Noten vs. Harding in rather more simple terms.
gloves shipped from Calcutta to Rotterdam were found to
be wet, stained, mouldy and discoloured as a result of He also held that the gloves essentially damaged themselves
moisture absorbed in humid conditions in Calcutta. Reversing under such conditions through their own moisture content,
the first instance decision in that case, the Court of Appeal and it was not sensible to describe them as having sustained

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