Page 22 - Insurance Times November 2023

The High Court dismissed the Bank's claim in this action and was caused by vandalism or sabotage, the Judge found
found that there was no loss by an insured peril. neither of these terms apt to describe the conduct of those
involved in a conspiracy to defraud the Underwriters.
The Judge pointed out that the concept of "any person
acting maliciously" is not designed to cater to situations The Judge also found that the armed men who boarded the
where the state of mind of spite, ill will, or the like is absent. Vessel had acted in concert with the master; the Owner was
The Judge found that the armed men who boarded the never deprived of the possession of his ship. The Owner's
Vessel intended to damage it, but not out of spite or ill will: orders were complied with at all times. Therefore, the Judge
"the vessel was not lost or damaged because the armed men found that the language of "capture, seizure, arrest,
desired to harm the vessel or the Owner. The vessel was restraint or detainment" did not apply. In summary, the High
lost or damaged because the armed men desired to make Court dismissed the Bank's claim under the terms of the
money from their actions". Vessel's war risks policy on the basis that the constructive
total loss of the Vessel was caused by the wilful misconduct
Although he accepted that the threats of harm to crew not of the Owner and not by an insured peril.
involved in the conspiracy could indicate an element of ill
will, the Judge did not consider the element of ill will The Underwriters also raised a number of alternative
sufficient to "colour the operation as a whole". In his defences, including breaches of warranties in the policy
judgment, Mr. Justice Teare found that there was not " a relating to navigational limits and a breach of BMP3 (Industry
plausible explanation of the events which befell BRILLANTE Best Management Practices) with respect to anti-piracy
VIRTUOSO which is consistent with an innocent measures that meant that cover under the policy was
explanation". suspended.

The Judge was left in no doubt of the Finally, the AIG-owned Talbot Underwriting and other Lloyd's
insurers did not have to pay the Greek bank $77mn for the
following findings:
explosion aboard an oil tanker because the ship's owner
The armed men who boarded the Vessel were pretending orchestrated a fake pirate attack in an attempt to commit
to be pirates and had no intention of hijacking the vessel
insurance fraud, the High Court had ruled. Thus, the insurers
for ransom. Their intention was to start a fire with an won, although the owner went through a blood bath just
explosive device they brought on board at the behest of the to secure money for himself, through the most unimaginable
Owner.
means he could.
The master, the chief engineer and the local salvage *I am thankful to Dr. S. Mukherjee, an Expert and
company which assisted the Vessel were complicit in the International Investigator for Maritime Fraud for his advice.
fraud.
Dr. Soumi Mukherjee completed her Graduation in Mass
Mr. Iliopoulos was the instigator of the conspiracy. His
Media and Masters in Mass Media from University of
motive was to make a fraudulent claim for the total loss of
Mumbai, later completed her Ph.D. She is interested in
the Vessel in the sum of approximately US$77 million; funds
Investigative Journalism related with History, Geography,
that could assist him and his companies with the financial
Zoology etc. She is currently serving in Media Officer
difficulties they were experiencing at the time of the
with International Police Organization.
incident. With respect to the Bank's argument that the loss
Insurance premium likely to undergo price correction, rise by 15-20%

General insurance premium is expected to rise by 15-20 per cent in the coming months as part of the risk manage-
ment by the insurers, especially in the wake of the anticipated increase in reinsurance costs.

Indian general insurance market may see further hardening of premiums going ahead as reinsurance prices may get
costlier, a senior industry person cautioned. Health and motor are the two major insurance segments in India with
the non-life general insurance clocking a premium of Rs 1.02 lakh crore in the first five months of FY2024.

The Insurance Times November 2023 21