23 May 2018

The B Atlantic – Stephenson Harwood secures Supreme Court victory

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The Court ruling drug smuggling is neither a war risk nor malicious

The Supreme Court’s decision in Navigators Insurance Company Ltd and others v Atlasnavios – Navegacao Lda ("B Atlantic", [2018] UKSC 26) was handed down on 22 May 2018.

The case will be of interest to all insurers and their insureds as:

  1. It concerns the correct interpretation of the standard war risks clauses and in particular whether the owner is covered for detentions and confiscations of the vessel where the loss arises from a detention by reason of the vessel being caught drug smuggling; and
  2. The legal principles on, amongst other things, the correct interpretation of insurance contracts are of broad application. This includes confirmation of the principle that where a or the proximate cause of a loss is excluded, insurers shall not be liable. 

The Supreme Court has held that there is no cover under the standard war risks policy for vessels used to smuggle drugs. Accordingly, insureds whose trading routes include higher risk jurisdictions should speak to their brokers about purchasing the specific additional cover that is available for this risk.
 
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Stephenson Harwood LLP's marine insurance group acted for the insurers; the team was led by Simon Moore, who was assisted by Paul Hofmeyr and Jide Adesokan. Clyde & Co, Ross & Co and W Legal acted for the owner.

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KEY CONTACT

Simon Moore

Simon Moore
Partner

T:  +44 20 7809 2164 M:  Email Simon | Vcard Office:  London

Jide Adesokan

Jide Adesokan
Associate

T:  +44 20 7809 2007 M:  Email Jide | Vcard Office:  London

Paul Hofmeyr

Paul Hofmeyr
Associate

T:  +44 20 7809 2233 M:  +44 7803 455 032 Email Paul | Vcard Office:  London