Inherent Vice: The Latest Instalment

The Court of Appeal has delivered a ruling which will make inherent vice more difficult for insurers to plead. Global Process Systems Inc. v Syarikat Takaful Malaysia Bhd (2009).

The policy defence of inherent vice has been the subject of some scrutiny in recent years, most recently by the Court of Appeal in Global Process Systems Inc. v Syarikat Takaful Malaysia Bhd (2009).

At first instance, the Commercial Court affirmed its decision in Mayban General Assurance Bhd v Alstom Power Plants Ltd (2004), deciding that, to establish inherent vice, insurers must show that cargo suffered loss, in conditions in which it was expected to be carried. The Court of Appeal has reversed that decision, finding for owners and limiting the application of the inherent vice defence for insurers.