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ARTICLE · 18 MAY 2009

´Inherent Vice´ And Inevitable Loss Reconsidered

A recent decision of the English Commercial Court provided an opportunity for reconsideration of the law of inherent vice and the concept of inevitable loss in marine insurance. The case creates no new law but reaffirms the decision of the House of Lords in Soya GmbH Mainz KG v White [1982] 1 Lloyd's Rep 136.

AustraliaTransport

A recent decision of the English Commercial Court provided an opportunity for reconsideration of the law of inherent vice and the concept of inevitable loss in marine insurance. The case creates no new law but reaffirms the decision of the House of Lords in Soya GmbH Mainz KG v White [1982] 1 Lloyd's Rep 136.

BACKGROUND FACTS

The case of Global Process Systems Inc & Anor v Syarikat Takaful Malaysia Berhad [2009] EWHC 637 (Comm) concerned the loss at sea off South Africa of three of four legs of a jack-up oil rig which was being towed from Texas to Malaysia.

It was agreed that the loss occurred because of fatigue cracking caused by repeated bending of the legs while being towed on a barge through the sea. The owners of the barge claimed under a policy of insurance, maintaining that the loss of the rig was accidental and within the terms of the 'all risks' cover. The insurer maintained that the cause was 'inherent vice' in the legs of the rigs. The insurer also

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