Under s.3 of the Marine Insurance Act 1906 (MIA 1906), perils of the seas are defined to mean the “perils consequent on, or incidental to, the navigation of the sea, that is to say, perils of the seas, fire, war perils, pirates, rovers, thieves, captures, seisures, restraints, and detainments of princes and peoples, jettisons, barratry, and any other perils, either of the like kind or which may be designated by the policy.” In the present scenario, the incident occurred in apparently calmed seas. However, Schedule 1, r7 of MIA 1906 clarifies that the term ‘perils of the seas’ refers only to fortuitous accidents or casualties of the seas, and that it does not include the ordinary action of the winds and waves. In fact, per Lord Clarke in The Cendor Mopu[1], “it is important to note that the cases show that it is not the state of the sea itself which must be fortuitous but rather the occurrence of some accident or casualty due to the conditions of the sea.”
The burden of proof for a loss by perils of the seas remains on the plaintiffs and they have to satisfy the court it is the proximate cause.[2] The owners would then have to provide evidence that the loss was accidental or fortuitous. In the absence of direct evidence, the shipowners can seek to prove loss by an unascertainable peril of the seas. Proof of this type of loss can be achieved by way of inference by reason of the circumstances relating to the loss, assuming that there is sufficient evidence to allow the court to make said inference. Lord Brandon in The Popi referred to the Sherlock Holmes dictum, “When you have eliminated the impossible, whatever remains, however improbable, is the truth.” Moreover, in Anderson v Morice[3] it was found that “in the absence of any other evidence as to the condition of the ship, the fact of her sinking in smooth water without any apparent cause would create an irresistible presumption of unseaworthiness.”
In light of Skandia Insurance Co Ltd v Skoljarev[4]and The Marel,[5] a shipowner in such a case as mentioned above would have to rebut any presumption of unseaworthiness and also to provide the Court with proof to eliminate other possible causes of loss, such as ordinary wear and tear, and willful misconduct. Furthermore, as per The Marel, the shipowners will have to satisfy the court on the balance of probabilities that the ship was lost by an unascertained peril, while the insurer is entitled to adduce evidence against such a claim.
[1] Global Process Systems Inc and another v Syarikat Takaful Malaysia Berhad, The Cendor MOPU [2011] UKSC 5.
[2] See n.4 & The Tropaioforos [1960] 2 Lloyd’s Rep 469
[3] (1874) LR 10 CP 58
[4] [1979] 142 CLR 375
[5] [1992] 1 Lloyd’s Rep 402