Nima SARL v The Deves Insurance Public Company Limited

For a voyage marine insurance policy incorporating a warehouse-to-warehouse clause, the extension of cover to the goods before shipment does not alter the insured voyage’s essential termini. If, when the vessel sails, it is in fact bound for a different destination, Marine Insurance Act 1906, section 44 applies and the risk, though apparently attached when the goods left the warehouse, is treated as never having attached.

On an application concerning service out of the jurisdiction, the court may determine that there is no serious issue to be tried where the evidence makes the claimant’s success at trial fanciful. An appellate court should admit fresh evidence where it could not reasonably have been obtained earlier, would probably affect the result, and is apparently credible.

The claimants, a Malian company, sought indemnity under an all-risks marine cargo policy for rice loaded in Thailand and lost during a voyage stated to be from Kohsichang to Dakar. The policy was subject to English law and incorporated Institute Cargo Clauses, including a warehouse-to-warehouse transit clause.

Toulson J permitted service out of the jurisdiction under RSC Order 11 rule 1(1)(d)(iii). Andrew Smith J refused to set that order aside, holding that there remained a serious issue to be tried and that England was the appropriate forum. The insurer appealed, relying on section 44 of the Marine Insurance Act 1906 and evidence that the vessel was a phantom ship intended from the outset to divert the cargo.

1. Appeal allowed. The further evidence, particularly the statement of a former crew member, was admitted. It could not reasonably have been obtained before the judge, would have had an important influence on the result, and was apparently credible. Its admission was consistent with the overriding objective.
2. The policy was a voyage policy within section 25 of the Marine Insurance Act 1906. Rule 2 of the First Schedule would ordinarily postpone attachment until the vessel started the insured voyage, but the warehouse-to-warehouse clause altered the time of attachment without changing the policy’s fundamental character or the voyage’s specified termini.
3. The reasoning in Simon Israel & Co v Sedgewick and Kallis (Manufacturers) Ltd v Success Insurance Ltd established that the insured adventure must in fact be embarked upon. The court must determine retrospectively, by reference to the acts and intentions of the owners or master at sailing, the vessel’s actual destination. If it was then bound for a different terminus, section 44 applied and the risk did not attach. A prior intention merely to deviate was different and engaged section 46.
4. On the augmented evidence, the only realistic conclusion was that the vessel was a phantom vessel and that the cargo diversion resulted from a preconceived fraud existing when it sailed. The claimants therefore had no real prospect of success and no serious issue to be tried. The court did not decide the separate question of goods lost before the vessel sailed.
5. The forum issue was consequently unnecessary. Potter LJ nevertheless considered that Thailand was prima facie the natural forum because the factual and evidential connections were overwhelmingly Thai. The appeal was allowed, the order permitting service out was set aside, and the proceedings were dismissed. The cross-appeal concerning waiver of the Thai limitation period was dismissed.

• Court of Appeal (Civil Division): allowed the insurer’s appeal from the decision of Andrew Smith J, set aside Toulson J’s order permitting service out of the jurisdiction, and dismissed the proceedings.
• High Court, Queen’s Bench Division, Commercial Court: Andrew Smith J dismissed the insurer’s application to set aside Toulson J’s permission to serve out.
• High Court: Toulson J granted permission under RSC Order 11 rule 1(1)(d)(iii) to serve the claim form out of the jurisdiction.