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Saving Acts in the Law of Marine Insurance: a Study of Salvage, General Average and Sue and Labour Implications

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Saving Acts in the Law of Marine Insurance: a Study of Salvage, General Average and Sue and Labour Implications _________________________________________________________________________Swansea University E-Theses Saving acts in the law of marine insurance: A study of salvage, general average and sue and labour implications. Khurram, Rubina How to cite: _________________________________________________________________________ Khurram, Rubina (2005) Saving acts in the law of marine insurance: A study of salvage, general average and sue and labour implications.. thesis, Swansea University. http://cronfa.swan.ac.uk/Record/cronfa43048 Use policy: _________________________________________________________________________ This item is brought to you by Swansea University. 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Please link to the metadata record in the Swansea University repository, Cronfa (link given in the citation reference above.) http://www.swansea.ac.uk/library/researchsupport/ris-support/ SAVING ACTS IN THE LAW OF MARINE INSURANCE: A STUDY OF SALVAGE, GENERAL AVERAGE AND SUE AND LABOUR IMPLICATIONS BY RUBINA KHURRAM SUBMITTED TO THE UNIVERSITY OF WALES IN FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY (LAW) UNIVERSITY OF WALES SWANSEA 2005 ProQuest Number: 10821438 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a com plete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. uest ProQuest 10821438 Published by ProQuest LLC(2018). Copyright of the Dissertation is held by the Author. All rights reserved. This work is protected against unauthorized copying under Title 17, United States C ode Microform Edition © ProQuest LLC. ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106- 1346 SUMMARY Shipping concerns persons and property. Both are subjected to the inherent dangers of the sea and as such, maritime safety is, and has been, a matter of serious concern. This thesis is concerned with property endangered at sea by fortuitous events as well as through the agency of human error, and the law governing the saving of property so imperilled. The thesis addresses the three acts of saving maritime property namely, salvage, general average and sue and labour in selective detail and examines the evolution of each, the legal principles, and their distinctive and common features within the context of indemnification or recovery under the law of marine insurance which serves as the common link. A comparative analysis of the three saving acts is carried out within this context. The relevant provisions of the Marine Insurance Act 1906 as well as express clauses pertinent to the three principal subject matters provide the foci for the discussions. Recent developments in the regimes of salvage and general average and the treatment of sue and labour in recent decisions, are addressed. It is concluded that redistribution of risks and liabilities may take different shapes and forms in maritime commerce, particularly in view of other concerns such as security of life and property at sea, coming to the forefront in the principal international maritime fora. The thesis consists of seven chapters. In the introductory chapter, the purpose of the thesis and the framework of research are set out. Chapters 2 to 5 contain detailed discussions and analyses of each of the three saving acts. The comparative analysis of the three regimes is presented in Chapter 6. In the concluding chapter a summary of the findings of the research effort and the conclusions are presented. DECLARATION This work has not previously been accepted in substance for any degree and is not being concuiTentJysubmitted in candidature for any degree. Signed (Candidate) Date. .V S..(.0. S STATEMENT 1 This thesis is the result of my own investigations, except where otherwise stated. Other sources are acknowledged by footnotes giving explicit references. A bibliography is appended. Signed .. (Candidate) Date. .. j. .P . 3 . [.Q 3 STATEMENT 2 I hereby give consent for my thesis, if accepted, to be available for photocopying and for inter-library loan, and for the title and summary to be made available to outside organisations. Signed.reef Candidate) Date.. \ 3 . J. /?. 3>. f o S CONTENTS Page No. Table of Cases CHAPTER 1 INTRODUCTION 1 CHAPTER 2 SALVAGE AND ITS INDEMNIFICATION 8 1. Introduction and Historical Evolution 8 1.1 Origins of Customary Salvage Law 1.2 Origins and Development in English Law 2. Fundamental Principles of Salvage Law 12 2.1 Definition Of Salvage 3. Maritime Property 17 3.1 The Triumverate 3.1.1. Danger 3.1.2. Voluntariness 3.1.3 Success 3.2 Life Salvage 4. Salvage as a Marine Risk 26 4.1 Marine Risks 4.2 Salvage Charges Prior to The 1906 Act 4.3 Salvage Charge under Section 65 of the Marine Insurance Act 1906. 5. Salvage Contract Versus Contract Salvage: 36 The Lloyd’s Open Form of Salvage Agreement (LOF). 5.1 Salvage Contract and Contract Salvage 5.2 The Lloyd’s Open Form: Recovery under Section 65 41 of the Marine Insurance Act 6. Express Cover: The Institute Clauses and 47 International Hull Clauses 6.1 Types of Clauses 6.2 Clauses relating to Salvage 7. Liability insurance for Salvorial Negligence 5$ CHAPTER 3 ENVIRONMENTAL DIMENTION OF SALVAGE. 64 1. Background and Implications for Insurer. 64 2. The Brussels Convention on Salvage, 1910 67 and its Inadequacies. 3. Liability Salvage and the Safety Net of LOF 1980. 70 4. The International Convention On Salvage, 1989. 73 4.1 Development and Salient Features 4.2 Special Compensation regime, LOF 1990, LOF 1995 And LOF 2000 5. The Position of Insurers. 80 Page No. 6. The Nagasaki Spirit and “FAIR RATE”. 83 6.1 Factual Situation 6.2 Fair Rate 6.3 Threat to the Environment 6.4 An Evaluation 7. Development of SCOPIC 91 7.1 Background 7.2 The Scheme of SCOPIC 7.3 Critique of SCOPIC CHAPTER 4 GENERAL AVERAGE AND ITS INDEMNIFICATION 100 1. Introduction 100 2. Historical Evolution 103 3. Principles of General Average 106 3.1 Definitions 3.2 Legal Basis of Right to General Average 3.3 Ingredients and Elements 4. York-Antwerp Rules. 111 5. General Average As a Marine Risk. 116 5.1 Loss and Act 5.2 Sacrifice and Expenditure 5.3 Contribution and Adjustment 5.4 Time of Peril 5.5 Voluntariness: Intentional Act 5.6 Reasonableness 5.7 Success 5.8 Directly Consequential 5.9 Extraordinary 5.10 Common Adventure 6. Other Marine Insurance Aspects of General Average 152 7. Peril 158 8. Express Cover 161 9. Reform of General Average 162 9.1. York -Antwerp Rules 2004 9.2 Background to the Reform 9.3 Recent Developments at CMI 10. Conclusion 168 CHAPTER 5 RECOVERY UNDER SUE AND LABOUR 170 1. Introduction and Historical Back ground 170 2. Concept of Sue and Labour and its Rationale 173 3. Duty of Assured to Sue and Labour 179 4. Absence of Sue and Labour Clause 203 5. Operative Time Frame of Sue and Labour Obligations 208 6. Consequences of Breach of Duty To Sue and Labour 212 Page No 7. Duty of the Underwriter. 224 CHAPTER 6 COMPARATIVE ANALYSIS OF SAVING ACTS 231 1. Introduction. 231 2. Salvage And General Average. 235 3. Salvage And Sue and Labour. 239 4. General Average And Sue And Labour. 244 5. Other Comparative Aspects. 249 5.1 Under-insurance 5.2 Unjust Enrichment and Restitution 6. Summary and Concluding Remarks. 251 CHAPTER 7 CONCLUSION 253 APPENDICES APPENDIX 1 LOF 2000 INCLUDUNG SCOPIC 2005 APPENDIX 2 BISHOP, W. A. SALVAGE LECTURE AT IMO IMLI (MALTA). 1995. APPENDIX 3 INTERNATIONAL HULL CLAUSES 2003 BIBLIOGRAPHY Table of Cases Admiralty Commissioners v. Valverda (Owners), [1938] A.C. 173. Aitchison v. Lohre, (1879) 4 App. Cas. 755 (H.L.). American Merchant Marine Insurance Co. v. Liberty Sand and Gravel Co., 282 Fed. Rep. 514. Anderson, Triton and Co. v. Ocean Steamship Co. (1884), 10 A.C. 107 (H.L.). Anglo-Argentine Live Stock Agency v. Temperley Shipping Co., [1899] 2 Q.B. 403. Arthur Average Association (De Winter and Co.’s Case), In re (1876), 34 L.T. 942; 3 Asp. M.L.C. 245. Atwood v. Sellar (1880), 5 Q.B.D. 286. Austin Friars SS Co. v. Spillers & Bakers Ltd., [1915] 1 K.B. at p. 836. Australian Shipping Commission v. Green, [1971] 1 Q.B. 456. Baker v. Black Sea and Baltic General Insurance Co. Ltd., [1996] L.R.L.R. 353. Ballantyne v. Mackinnon (1896), 2 J.B. 455 (C.A.). Balmoral Steamship Co. Ltd. v. Marten, [1902] A.C. 511 (H.L.). Barge J. Whitney, The (1968), A.M.C. 995. Barque Robert S. Besnard Co. v. Murton, (1909) 14 Com. Cas. 267; 11 Asp. M.L.C. 299. Beaverford v. The Kafiristan, The, [1938] A.C. 136. Birkley v. Presgrave, (1801), 1 East 220, 1 Emerigon c.12 s.41 at p. 606. Booth v. Gair, (1863), 33 L.J.C.P. 99, 15 C.B. (N.S.) 291. Bosworth (No. 2), The, [1960] 1 Lloyd’s Rep. 163 (C.A.). Brandeis Goldschmidt and Co. v. Economic Insurance Co.Ltd. (1922), 38 TLR 609).
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