In Navigators Insurance v Atlasnavios Navegacao [2018]
UKSC 26, the Supreme Court was asked to consider whether the
smuggling of cocaine on a vessel, unknown to the owners or crew,
constituted a 'person acting maliciously' in a war risks
insurance policy. The clause in question was the standard form
Institute War and Strikes Clauses 1/10/83, and so this decision
will have a wide-ranging application to commercial shipping
insurance.
The clause in question provided that loss caused by "any
person acting maliciously" is an insured peril (clause 1.5),
but coverage is excluded in the case of "arrest, restraint,
detainment, confiscation or expropriation under quarantine
regulations or by reason of infringement of any customs or trading
regulations" (clause 4.1.5). The Supreme Court upheld the
earlier Court of Appeal decision, albeit on different grounds. The
Court of Appeal had previously decided that the drug-smuggling was
clearly within the ambit of malicious behaviour,
