CA-2024-000950 - [2025] EWCA Civ 1019

I consider that there is force in Ms Hopkins’ criticism of the judge’s approach. There is no reason to suppose that parties who adopt the American Institute clauses intend that exclusion 1(e) should have the same effect as clause 4.1.5 in the equivalent English Institute clauses. The wording of the two clauses is different and each has, so far as relevant, a different drafting history, with the American clause apparently pre-dating the English clause. Each clause must therefore be interpreted on its own terms. Nevertheless, the principles which govern the interpretation of a clause in a marine insurance policy are common to the two clauses. In each case the object is to ascertain the objective meaning of the clause, giving effect to its language and taking account of the commercial background. That background includes, in both cases, the fact that the clause forms part of a widely used form which has to be applied to vessels trading worldwide, and needs to be interpreted as it would be understood by commercial people in the shipping and marine insurance industry. It would therefore be surprising if, as the judge held, a term such as ‘customs regulations’ has a different and narrower meaning in the American clause from its meaning in the English clause.

It is also necessary to keep in mind that the perils and exclusions together express the ambit of the cover and they have to be construed together, each being looked at in the light of the other, and with neither having primacy over the other: The Wondrous [1991] 1 Lloyd’s Rep 400, 416-7; The B Atlantic [2016] EWCA Civ 808, [2017] 1 WLR 1303, para 34.

Exclusion 1(e) is concerned with ‘Arrest, restraint or detainment under customs or quarantine regulations and similar arrests, restraints or detainments …’ As a matter of strict language it might be said that it is the arrest, restraint or detainment which has to be similar to an arrest, restraint or detainment under customs or quarantine regulations, but as all arrests are similar in that they place a vessel under the control of the arresting state, it is clear that the similarity with which the clause is concerned is whether the regulation under which the arrest is effected is similar to, or has a similar purpose to, a customs or quarantine regulation.

The starting point, therefore, is to decide what is meant in exclusion 1(e) by ‘customs or quarantine regulations’. Only then is it possible to approach the question whether a regulation pursuant to which a vessel is arrested or detained is of a similar character to a customs or quarantine regulation.