GURBANI & COAdvocates & Solicitors INSTITUTE CARGO CLAUSES A comparison of the 1982 and 2009 Clauses
GURBANI & CO Title No changes in title of Clauses A revision not a new set of Clauses Margin Side Headings 1982 Clauses Margin Side Headings for Clauses 4 to 7 (i.e. exclusion clauses) led to confusion. Eg. Clause 6 – War Exclusion Clause Clause 7 – Strikes Exclusion Clause Removed in 2009 Clauses. Other margin side headings replaced by conventional sub-headings.
GURBANI & CO RISK CLAUSE Cosmetic change to give a clear indication that the clauses 4, 5, 6 and 7 are exclusions.
GURBANI & CO G.A. etc Minor changes. The word “affreightment” is replaced by the simplified word “carriage”. The words “or elsewhere in this insurance” in the 1982 clause are deleted as being surplusage.
GURBANI & CO BOTH TO BLAME COLLISION CLAUSE Revised clause uses clearer language but it neither widens nor narrows the cover. The word “shipowners” is replaced by the more appropriate word “carriers”. “Affreightment” to “Carriage”. “Underwriters” to “insurers”.
GURBANI & CO WILFUL MISCONDUCT No change. ORDINARY LEAKAGE ETC No change.
GURBANI & CO INSUFFICIENCY OR UNSUITABLILIY OF PACKING ETC Limited to 2 situations/Ordinary incidents of transit Liftvan Employees
GURBANI & CO INHERENT VICE No change. DELAY Word “proximately” is deleted.
GURBANI & CO ILLUSTRATION Transformer to be shipped from say Southampton to Penang, Malaysia. Shipped on board Vessel “A” from Southampton to Rotterdam. Vessel “A” encountered Force 7 and 8 winds for 2 days. At Rotterdam transferred to Vessel “B” bound for Penang. Vessel “B” met Force 7 to 10 winds for 2 days. On arrival at Penang, the transformer was found damaged – the joints were separated, the limbs were distorted and there were movements in the parts. Is it covered under the 1982 Clauses and/or the 2009 Clauses?
GURBANI & CO INSOLVENCY OR FINANCIAL DEFAULT Exclusion is reduced in scope Innocent Assured Good faith assignee “Arising from” become “caused by” ICTC (A) 5/9/83 CL. 275 IFMC (A) 1/1/86 CL. 323
GURBANI & CO NUCLEAR FISSION AND/OR FUSION Exclusion is now wider – “directly or indirectly caused by”; including weapon or device not necessarily of “war”.
GURBANI & CO UNSEAWORTHINESS AND UNFITNESS
GURBANI & CO Vessel/craft dealt with separately from container/conveyance Cl. 5.1.1 refers to “Assureds”. Cl. 5.1.2 refers to “Assureds or their employees” “Liftvan” “Servants” become “employees” Assignee ICTC (A) 5/9/83 CL. 275
GURBANI & CO WAR ETC EXCLUSION No change. Note: Only the A Clauses contain the words “(piracy excepted)” in the capture/seizure/arrest etc exclusion in Clause 6.2. A claim relating to piracy is therefore covered under the A Clauses but not under the B and C Clauses.
GURBANI & CO STRIKES ETC EXCLUSION Strikes exclusion unchanged Terrorism exclusion extended The Institute Strikes Clauses (Cargo) 1/1/09 have been amended accordingly to give back to back cover.
GURBANI & CO DURATION
GURBANI & CO 1982 – Warehouse Gate to Warehouse Gate - from the time the goods leave the warehouse.” Requirement of continuous flow “On delivery to” becomes “on completion of unloading” – revised clause covers both loading and unloading Effect of new Cl. 8.1.3 Effect of “Assured or their employees” as distinct from “Assured” 2009 - “first moved into warehouse”
GURBANI & CO ILLUSTRATION Insurance on electronic goods from Singapore to Amsterdam. Goods were transported from supplier’s factory in Defu Lane to seller/insured’s warehouse in Tuas at 10am to be stowed into a container. Loading and stowage into the container was completed at 6pm. Prime mover and trailer arrived at 8.30pm and container was loaded onto the trailer. It was too late to send the container to Keppel CY. The prime mover and trailer moved out of the warehouse and parked at the parking lot outside the warehouse. The intention was to transport the container to Keppel CY the next morning at 6.30am. Later that night the container was stolen. Is the loss covered under the 1982 Clauses and/or the 2009 Clauses?
GURBANI & CO ILLUSTRATION Facts are as stated earlier except that the loading and stowage of the goods into the container was completed at 7pm and the intention was to transport the container from the warehouse to Keppel CY. The prime mover and trailer to transport the container to Keppel CY was expected to arrive at between 7 to 8pm. The warehouse caught fire at 7.30pm before the prime mover/trailer arrived and the goods were totally lost. Is the loss covered under the 1982 Clauses and/or the 2009 Clauses?
GURBANI & CO ILLUSTRATION The insured containerised goods arrived at the final port of Amsterdam. The container was transported by the prime mover to the consignee’s final warehouse. At the consignee’s final warehouse before the container could be unloaded from the trailer/prime mover, an armed gang held up the warehouse staff. The prime mover/trailer and the container were driven off and stolen. Is the loss covered under the 1982 Clauses and/or the 2009 Clauses?
GURBANI & CO ILLUSTRATION The insured machine arrived at the final port of Singapore. The machine was transported by the lorry to the consignee’s final warehouse in Tuas. It is unloaded from the lorry onto the ground outside the warehouse. As the machine was being hoisted to the 3rd floor, it fell onto the ground. Is the damage covered under the 1982 Clauses and/or the 2009 Clauses?
GURBANI & CO Some tidying of language but the effect remains unchanged.
GURBANI & CO The effect remains the same.
GURBANI & CO TERMINATION OF CONTRACT OF CARRIAGE Minor changes in wording:- “delivery” becomes “unloading” to make it consistent with Clause 8. “named herein” in Clause 9.2 becomes “named in the contract of insurance”. “goods” becomes “subject-matter insured”.
GURBANI & CO CHANGE OF VOYAGE
GURBANI & CO In “phantom ship” cases the ship will sail for a different (and unknown) destination without the knowledge of the Assureds. In such cases there is no cover. New Cl. 10.2 cover such losses provided (i) transit commences and (ii) assured and their employees had no knowledge.
GURBANI & CO Old Clause 10 used the phrase “held covered”. New Clause 10 explains the meaning of “held covered” in line with Institute Classification Clauses 1/1/2001 CL. 354. The “Note” at the end of the end of the new Clauses stresses the prompt notice requirement as with the old Clauses. The minor revisions are to reflect the updating of the relevant clauses above eg. the words “held covered” no longer appear in the Clauses so the Note require consequential amendment, but do not change the extent or width of the cover.
GURBANI & CO ILLUSTRATION Insurance on bags of rice from Bangkok to Hong Kong. The bags of rice were in a warehouse in Bangkok. They were transported to and loaded on a vessel called the “Jubilee” at Bangkok. Vessel is a phantom ship and it disappeared with the cargo after leaving Bangkok. Is the loss covered under the 1982 Clauses and/or the 2009 Clauses?
GURBANI & CO ILLUSTRATION Facts are as stated earlier except that the vessel “Jubilee” is not a phantom ship. The insureds intended the rice to be shipped from Bangkok to Hong Kong, as per the policy, but the vessel was actually bound for Colombo. The insureds did not discover this mistake until after the vessel sailed and sunk shortly thereafter. Is it covered under the 1982 Clauses and/or the 2009 Clauses?
GURBANI & CO CLAIMS No change.
GURBANI & CO FORWARDING CHARGES Only minor changes, eg. “hereunder” has been deleted and “servants” have become “employees”.
GURBANI & CO CONSTRUCTIVE TOTAL LOSS No change.
GURBANI & CO INCREASED VALUE No change, except “herein” becomes “under this insurance”, “Underwriter” becomes “Insurers”, “cargo” becomes “subject-matter insured”.
GURBANI & CO BENEFIT OF INSURANCE A definition of the Assured has been inserted for extra clarity, i.e. it makes it clear that an assignee and the principal have the benefit of the insurance. The word “inure” has multiple dictionary meaning and is replaced with more contemporary wording.
GURBANI & CO MINIMISING LOSSES “Servants” become “employees” and “Underwriters” become “Insurers”, but otherwise no changes.
GURBANI & CO WAIVER CLAUSE “Insurers” has replaced “Underwriters” but otherwise no change. AVOIDANCE OF DELAY No change.
GURBANI & CO LAW AND PRACTICE No change. MINOR AMENDMENTS (i) “Insurers” has been substituted for “Underwriters”, eg. Clauses 3, 5, 12, 14, (ii) “cargo” and “goods” have been substituted for “subject-matter insured”, eg. Clause 8.1, 8.2, 9.14, (iii) the Clauses now distinguish between “this insurance” (the insurance cover provided by the Clauses) and the “contract of insurance” being the overall open cover or the facultative contract of insurance, to clarify the position of the Clauses, eg. Clauses 5.2, 8.1.1 and 15.1, (iv) reference is also made to the word “ship” (Cl. 5.3) as distinct from “vessel” (Cl. 4.6 and 8.2) perhaps for stylistic reasons (i.e. Cl. 5.3 unseaworthiness is generally referred to a ship, rather than a vessel).
GURBANI & CO SUMMARY Major revision Clause 4.3 - Exclusion of insufficiency or unsuitability of packing etc Clause 4.6 - Exclusion of insolvency or financial default Clause 5 - Exclusion of unseaworthiness and unfitness Clause 8 - Duration of insurance Clause 10 - Change of voyage Minor revision Clause 4.7 - Exclusion of nuclear fission and/or fusion Clause 7 - Strikes etc exclusion Clause 9 - Termination of contract of carriage Clause 15 - Benefit of insurance Cosmetic Changes Clause 1 - Risks clause Clause 2 - GA clause Clause 3 - Both to Blame Collision clause Clause 4.5 - Exclusion of delay Clause 12 - Forwarding charges Clause 14 - Increased value Clause 16 - Minimising losses Clause 17 - Waiver clause
GURBANI & CO “B” AND “C” CLAUSES The “B” and “C” Clauses have been amended in accordance with the changes in the “A” Clauses. Note: There is therefore no cover for piracy unlike the “A” Clause (Cl. 6.2). It is therefore necessary to add the Institute Malicious Damage Clause 1/1/82 CL. 266 to the cover if deliberate damage (including privacy) is to be covered.
GURBANI & CO INSTITUTE STRIKE CLAUSES (CARGO) 1/1/90INSTITUTE WAR CLAUSE (CARGO) 1/1/09 The above Clauses have been amended in line with “A” Clauses. STRIKE CLAUSES In line with the exception in the new Clause 7 of the “A” Clauses the cover has been extended to take back what is excluded under the new “A” Clauses. Note – the Strike Clauses only cover physical damage arising from the perils insured and does not cover losses arising from delay or interruption of the transit. Both the old and the new Clause 3.7 and 3.8 of the Strikes Clauses make this clear.
GURBANI & CO WAR RISKS CLAUSES No change except that “provided” is replaced by “excluded”.