Page 38 - Insurance Times July 2016
P. 38
Implied Warranties and the purpose they serve enactment of The Marine Insurance Act, 1960 in the UK
Implied warranties do not appear in the policy but are and subsequently The Marine Insurance Act, 1963 in India
tacitly understood by the parties to the contract. They are seaworthiness of the vessel acquired legal rigor.
implied by law from the circumstances in which the bargain
was brought about. Section 41 (4) of the MIA 1963 provides that "A ship is
deemed to be sea worthy when she is reasonably fit in all
Implied warranties are exclusive to marine insurance. They respects to encounter the ordinary perils of the sea
are not found in non-marine insurance. The rationale for adventure insured".
this lies in the unique nature of maritime adventure. When
a vessel is engaged in maritime adventure, apart from the Seaworthiness has been further interpreted to mean "ability
ship-owner, numerous other interests as such as the crew to withstand ordinary stress of wind, waves and other
members, freight, consignees of cargo, consignors, weather conditions which the vessel might normally be
charterers, if any etc. are exposed to maritime perils; expected to encounter during her voyage". Another
however neither the assured nor the insurer is in a position definition of the term has been given by Channel J, who said
to exactly ascertain the condition of the insured vessel when that "to be seaworthy a vessel must have that degree of
she is on voyage on high seas despite radio contact fitness which an ordinary, careful and prudent owner would
between the master and crew of the vessel and the ship- require his vessel to have at the commencement of her
owners. In order to balance the conflicting interests of the voyage, having regard to all the probable circumstances of
contracting parties and minimize the pitfalls of the it".
maritime adventure, marine insurance law has imposed
certain implied warranties in marine insurance policies. The required standard of seaworthiness is not absolute, in
the sense that it is 'relative', among other things, the state
There are four warranties implied by the MIA 1963: of knowledge and standards prevailing at the material time
and varies according to the voyage undertaken and the
(i) Warranty of sea worthiness - S 41 (1), (3), and (4); class of the ship. Therefore, the term "seaworthiness" also
expands in terms of what it stands for over time to reflect
(ii) Warranty of port worthiness - S 41 (2); the evolving changes in the technology, standards of ship
construction and regular overhaul and carrying out
(iii) Warranty of cargo worthiness - S 42 (2); maintenance repairs.
(iv) Warranty of legality - S 43. The main categories for which the term
"seaworthiness" is applicable to are:
Warranty of sea worthiness: The doctrine of sea
worthiness was formulated and developed with a view to i) Structure and other technical equipment of the vessel
protect the interests that are exposed to a maritime - the hull, machinery and other mechanical, electrical
adventure from the possible hazards of the adventure. and electronic equipment, hatches, pipes and pumps,
Initially, a provision in respect of sea worthiness was tackle and steering mechanism, temporary defects etc.
inserted into the charter parties of vessels in order to warn
merchants who loaded cargo into the holds of the vessel. ii) Design and construction of the vessel - compliance with
the requirements of statutes, and rules of classification
This provision, however, did not impose any obligation on societies
the ship-owner or charterer of the ship to ensure the sea
worthiness of the vessel both at the commencement of the iii) Latent defect in hull and machinery
voyage and during the course of the voyage and the
merchants who ventured into the sea with their cargo had iv) Navigational equipment/aids
no recourse against the ship-owner or the charterers of the
ship should the vessel meet with disaster primarily because v) Certificates and documents necessary for the
it was not sea worthy. protection of the vessel and cargo
It was in the 17th century that the merchants were vi) Sufficiency of fuel, provisions and medicines
afforded a right of indemnity, solely upon proof of the
vessels' unseaworthiness, independent of any fault or vii) Efficiency/Competence of the crew
negligence on the part of the owner or master. With the
viii) Stowage and loading
ix) Pilot
38 The Insurance Times, July 2016
