1. Implied Warranties in Marine Insurance (seaworthiness)
ΕΝΙΑΙΟ Π.Μ.Σ. ΝΟΜΙΚΗΣ ΣΧΟΛΗΣ
ΚΑΤΕΥΘΥΝΣΗ: ΝΑΥΤΙΚΟ ΔΙΚΑΙΟ
ΜΑΘΗΜΑ: ΔΙΚΑΙΟ ΘΑΛΑΣΣΙΑΣ ΑΣΦΑΛΙΣΗΣ
Κυριακή Ι. Κυριακογιαννάκη
Επιβλέποντες Καθηγητές: Ε. Κινινή , Δ. Χριστοδούλου
Αθήνα, Απρίλιος 2017

2. Warranties in general Warranties in marine insurance
Conditions terminate the contract or affirm the contract and claim damages
Innominate Terms  upon the nature of the event to which the breach gives rise
Warranties injured party claim damages but still under obligation to perform the contact
Warranties in marine insurance
Limit the liability of the insurer
Functions
Protect the insurer against alteration of the risk
Assist in rating the scope of the proposed insured risk
Warranties v/s misrepresentation
Misrepresentation: outside the written policy
Warranty: part of written policy
A representation may be equitably or substantially answered; but a warranty must be strictly complied with (In de Habn v Hartley (1768)1 TR 343 at 354.
 materiality/ immateriality signifies nothing according the warranties

3. Classification of warranties
According to the time of undertaking
Relating the time to circumstances at the inception of the risk -Warranties as to future events-Continuing warranties
According to the nature of undertaking
Affirmative- positive/negative act(ex. Seaworthiness)
According to their structure
Expressed – implied
Implied warranties
MIA 1906 sections
Warranty of seaworthiness (s )
Portworthiness
Cargoworthiness
Legality
Amended by the Insurance Act 2015

4. The implied warranty of seaworthiness
Definition in Marine Insurance Law
A ship is deemed to be seaworthy when she is reasonably fit in all respects to encounter the ordinary perils of) the seas of the adventure insured (s.39 (4))
Definition in common law
“ a vessel must have that degree of fitness which an ordinary, careful and prudent owner would require his vessel to have at the commencement of her voyage, having regard to all the probable circumstances of it”.
Ordinary perils? Especially the weather
Nature of seaworthiness
That degree of fitness that which an ordinary, careful and prudent owner would require hiss vessel to have.
Sufficient fitness is enough
Examination in the light of surrounding circumstances relative in numbers
According to: the voyage, weather conditions, kind of cargo, class of the ship, improvements and changes in the means and modes of navigation (standar practice or international conventions).

5. Categories of matters to which seaworthiness extends
Structure and other technical equipment: the hull, machinery and other technical equipment, hatches, pipes and pumps, tackle and steering mechanism, mere temporary defect
Design and construction :compliance with the requires of statutes and rules of classification societies, construction or design error in any part of the vessel
Latent Defect
Navigational equipment and aids: radio, radar, compass etc, charts
Certificates and documents
Fuel/ coal, provisions, medicine: sufficiency of fuel/coal provisions and medicines, quality of fuel/coal
Competency of the crew: competency in number, competency as individuals (general and specific)
Stowage and loading pilot : dangerous stowage and loading, overloading
Pilot

6. Warranty of seaworthiness as a defence
Defence mechanism & liability imposing doctrine
One of the most effective defence (“instant death of the assured”)
No causal relationship between breach-loss(*only in voyage policies)
Rate the risk & adjust the premium
Voyage policies
Extent
“Commencement” when the ship sails or when se leaves the port?
Conveyance of the cargo to the ship before commencement (Lane v Nixon (1866)LR 1 CP 412)
Sailing= commencement (Soyer)
“Ship”: crafts, lighters?
ship: every description of vessel used in navigation (s.313, MSA 1995)
No case law

7. Doctrine of stages
“At the commencement of each voyage” (s.39(3))
Reconcile the interests of the parts.
Physical factors : ex. from Mediterranean to North Atlantic.
Stages for coaling and bunkering.
“The quantity of the bunkers sufficient to make a vessel seaworthy fort that stage must be determined in view of all contingencies that a prudent shipowner ought to contemplate”(Timm & Son v Nortumbrian Shipping Co, [1939] AC 387)
No continuing warranty of seaworthiness
No express provision in MIA 1906 but s39(5) no implied warranty that the ship must be seaworthy at any stage of the adventure.

8. Time policies
Thus, in a voyage policy the insurer needs to prove only one thing; that the ship was unseaworthy at the commencement of the voyage. In a time policy, on the other hand, the insurer needs to prove three things; that the ship was unseaworthy, that the unseaworthiness caused the loss, and that the assured was privy to the unseaworthy state of the ship.
In a time policy there is no implied warranty that the ship shall be seaworthy at any stage of the adventure, but where, with the privity of the assured, the ship is sent to sea in an unseaworthy state, the insurer is not liable for any loss attributable to unseaworthiness.(s. 39(5))
Privity of the assured
Definition: not “wilful misconduct”
Acts or matters which were done with the assured’s knowledge and consent (Lennard’s Carrying Co v Asiatic Petroleum [1915] AC 705) Neutral word.
The blind eye knowledge (The Star Sea [2001} 1UKHL 1;[2003] AC 469;[2001] 1 Lloyd’s Rep 3889).  a suspicion that the relevant facts do exist and a deliberate decision to avoid confirming that they exist.
Directing mind and will of a company (Lennard’s Carrying Co v Asiatic Petroleum [1915] AC 705).
Persons who have de facto management
The assured must be privy to the particular, or actual, unseaworthiness that results in loss( Thomas v Tyne & Wear SS Freight Insurance Association [1917] KB 938).

9. Loss attributable to unseaworthiness and causation problem
Proximate cause doctrine only last cause
Efficient and predominant
Mixed Policies
Assured vessel for a voyage and by agreement for a certain period after her arrival at the port of destination.
Warranty of seaworthiness was implied in mixed policies in respect of the voyage part of the cover, even though it was not expressly stated by the MIA 1906.
P&I Club cover
Entry into a P&I  time policy  s. 39(5)
The rules of the club may exclude the application of s. 39(5)
Burden of proof
Insurer
But if a ship soon after sailing becomes unseaworthy without apparent cause burden of proof is shifted to the assured

10. Bibliography
Baris Soyer, Warranties in Marine Insurance, 3rd ed., Routledge 2017.
Ozlem Gürses , Marine Insurance Law, 2nd ed., Routledge 2017.
John Dunt, Marine Cargo Insurance, Routledge 2013.