Elafonissos Fishing and Shipping Company v Aigaion Insurance Company SA

Permission to amend pleadings should generally be granted so that the real dispute can be adjudicated, provided prejudice can be compensated in costs and the administration of justice is not significantly harmed.

Permission should be refused where the proposed case has no realistic prospect of success, lacks evidential support, or is insufficiently precise, particularly where the amendment is made close to trial. A term should not be implied into a marine insurance warranty without commercial necessity and sufficient certainty. Section 39(5) of the Marine Insurance Act 1906 does not create an implied seaworthiness warranty at lay-up in a time policy; its proviso concerns sending a vessel to sea in an unseaworthy state.

The claimant brought a claim under a marine insurance policy concerning damage allegedly suffered by its vessel while laid up at anchor in Madagascar. The defendant insurers applied shortly before trial for permission to re-amend their Defence and Counterclaim and to rely on evidence from Mr Kardiakopoulos, described as expert evidence.

The proposed amendments included allegations concerning hot lay-up, classification requirements, port regulations, seaworthiness, salvage and an exclusive jurisdiction clause. The central issues were whether the proposed cases had a realistic prospect of success, were supported by evidence and were pleaded with sufficient precision, and whether the proposed witness evidence was admissible expert evidence.

1. The application was allowed in part. The court applied the principles governing amendments, including those stated in Cobbold v Greenwich LBC (unreported 9 August 1990) and Clarke v Marlborough Fine Art [2002] 1 WLR 1732. An amendment should be refused where it has no realistic prospect of success, is unsupported by evidence, or is insufficiently precise.
2. The proposed hot lay-up case was disallowed. The evidence did not establish a single customary meaning or customary requirements for hot or cold lay-up. The classification guidelines differed and were expressly only guidelines. Further, there was no commercial necessity to imply a hot lay-up term into the policy, and the alleged term was insufficiently certain.
3. The classification allegation was also disallowed because it appeared dependent on the rejected hot lay-up case or on an abandoned pleading. Permission remained possible only if a genuinely free-standing case were reformulated clearly and placed before the trial judge.
4. The port-regulations amendments were permitted. The allegation could be understood as concerning regulations specifically applicable to lay-up, rather than every port regulation. Other factual allegations concerning compliance were matters suitable for trial.
5. The seaworthiness amendment was refused. Section 39(5) of the Marine Insurance Act 1906 excludes an implied seaworthiness warranty at any stage of the adventure under a time policy. Its proviso did not apply because the allegation concerned lay-up, not sending the vessel to sea in an unseaworthy condition.
6. The salvage and exclusive-jurisdiction amendments were permitted. Mr Kardiakopoulos could give limited factual evidence and evidence concerning Mahajanga port regulations, subject to the trial judge determining admissibility. His summaries of factual material and views on hot or cold lay-up were not expert evidence.
7. The insurers were ordered to pay the costs of and incidental to the application, the costs occasioned by the amendments, and costs relating to the deleted allegations.