Claim No: CL-2022-000527 - [2025] EWCA Civ 1387

The Policy, as I have already indicated, was constituted by the Certificate, which was signed by the Insurer, but apparently not by the Charterer. That said, it is not disputed that the Charterer was represented throughout the placement of the Policy by a professional insurance broker (seemingly Fanny Lo of Geoffrey Cheng & Co Ltd of Hong Kong). The Certificate referred, as I have also already mentioned, to the Booklet containing other terms.

The Certificate identified the Charterer as the assured and described the type of insurance as “Charterers’ Liability including Liabilities for damage to Hull - Class 1”. It identified the security, the vessels covered and the period of insurance, set out the maximum sums insured, and included a warranty as to trading areas. Under a “Conditions” heading, the Certificate included these words: “[a]s per Marine Liability Policy for Charterers 1-2017, as attached”. The Booklet has a coloured front page entitled “Charterers’ Liability” in large letters with the heading “Marine Liability Policy for Charterers - 1-2017” in smaller letters immediately thereunder.

The Certificate also included other provisions under the headings “Conditions”, “Warranties”, “Excluded Cargoes”, “Deductible(s)”, “Payment Terms” and “Information given to Insurers”. The Owner and the Club drew particular attention to the following warning under the heading “Payment Terms”: “Breach of payment terms may lead to rejection of all claims whether arising before or after the breach as per Marine Liability Policy for Charterers 1-2017”. It was submitted that the provisions in the General Terms and Conditions concerning the consequences of non-payment of premium were, like the pay first clause, onerous. Yet, the non-payment terms were highlighted in the Certificate, whilst the pay first clause was not.

As the index to the Booklet showed, there were 7 parts to it. Parts 1 to 4 contain clauses relating to four different types of cover: part 1 Charterers’ Liability - Class 1, part 2 Defence Cover for Legal Costs - Class 2, part 3 Cargo Owners’ Legal Liability – Class 3, and part 4 War Risk Protection Cover. The Certificate made clear that the Policy only provided the cover in parts 1 and 4. Part 5 was, as I have said, headed “General Terms and Conditions”. Part 6 was headed “Additional Cover and Extension Clause” and part 7 was headed “Definitions”.

The Owner and the Club relied on the fact that the insuring clause in part 1 did not refer specifically to the General Terms and Conditions in part 5, whilst the insuring clause in part 2 did refer to them.

The General Terms and Conditions in part 5 of the Booklet comprised sections 25 to 49. I have already set out the hierarchy provision in section 25 in full at [15] above.

Section 27.1 of part 5 under the heading “Certificate of Insurance” provided that “[o]n acceptance of the application for insurance by the [Insurer], a Certificate of Insurance will be issued by the [Insurer] evidencing the terms and conditions of the contract of insurance between the [Insurer] and the Assured”. Section 27.1 also provided what else should be dealt with in the Certificate (seemingly followed in this case). Section 27.3 provided that the Certificate was to be “conclusive evidence as to the terms and conditions of the contract of insurance”.

Section 28 of part 5 of the Booklet dealt in some detail with “Exclusions and Limitations”. Section 29 dealt, also in some detail, with the “Payments to the [Insurer]” providing that, if a premium payment was not made within 7 days of a notice, the insurance would be cancelled forthwith.

Section 30 of part 5 of the Booklet was headed, as I have said, “Claims”. The Owner and the Club drew attention to the widely varying provisions included in sections 30.1 to 30.16, in amongst which was found what they described as the onerous section 30.13, requiring claims to be paid first by the Charterer before there would be liability on the part of the Insurer.

Sections 31-49 provide for a series of detailed provisions concerning areas that are commonly dealt with in such covers ranging from insolvency, termination, deductibles and subrogation to assignment, interest and applicable law and jurisdiction.