5.5 Was the total loss caused by a marine peril?
Team Tango was detained in August 2016. The intervention lasted for more than two years, which, if the detainment was caused by a war peril, would result in total loss according to NP Clause 15-11 sub-clause 1. The implication of the discussions above is that the marine peril constituted the dominant cause for the intervention. This marine peril intervention then interacted with the problems that were met when the authorities tried to discharge the cargo under their control. The starting point when a casualty interacts with a new peril or cause and this results in increased damage is that this increased damage shall be attributed to the initial casualty, cf. ND 1977.38 NSC Vestfold I:(1)Referred from the translated version in Wilhelmsen and Bull (n 4) 121-122, based on the presentation in Brækhus and Rein (n 4) 263-264, 266. See also Commentary (2019) 84.
Vestfold I grounded and sustained damage to the gear, which was repaired. Approximately two months later, the gear broke down. The new gear damage was due either to damage that had not been discovered duringr the previous repair, or instead to an inadequate installation under this repair, or a combination of these causes. The insurance covered damage to machinery caused by, for instance, grounding, but did not cover break-down of machinery per se. The question was therefore whether the grounding had caused both the break-down of the axle and also the later break-down of the gear, or whether instead the break-down of the gear constituted a new casualty.
The Supreme Court held that the question of causation had to be decided by use of the allocation principle in the NMIP 1964 § 20. Furthermore, the court found that there was a legally relevant chain of causation between the grounding and the damage to the gear, and that the inadequate repair could not breach the chain of causation from the grounding. The grounding was a significant element in the total causative picture, because it was due to this grounding that the vessel sustained its initial damage, which then developed into further damage to the machinery. Whether the errors committed by the yard could breach the chain of causation from the grounding would depend on the kind of error that was committed in the individual case. A repair would normally be successful. However, it could be the case that a repair yard overlooked damage or carried out repairs incorrectly, for instance, by making a wrong installation. Such errors were foreseeable. The assessment could be different if the yard had acted with gross negligence. Even so, the errors committed by the yard in this case implied that part of the damage should be allocated to this cause. The court allocated the damage with 2/3 to the insurance and 1/3 to the assured.
The implication here is that when a new cause intervenes through an initial casualty, the initial casualty is a “major part” of the total picture. The case concerned repair of the initial damage, but due to failures during this repair the vessel sustained new damage. Similarly, one might argue that the expected remedy, when a vessel is detained because of breach of import regulation on the part of the receiver of the cargo, would be to discharge the cargo and let the vessel sail. If problems occur under such a procedure that cannot be seen as being unexpected, any extended damage due to such problems should be attributed to the initial casualty.
In this case, however, the delay could not be considered as ordinary. The assured argued that the problems tied to discharge of the urea were the security considerations and the measures instigated to control storage of urea so that Boko Haram could not obtain it. This could be assessed as a new war peril resulting in a new intervention, which would then be a war risk casualty. However, the court found that the delay of the discharge was caused by Elephant’s obstructive behaviour and not the political security considerations. From the Vestfold I case it may be deduced that gross negligence by a third party may sever the causal link from a casualty, but the result would be that there was a new state intervention caused by breaches of import regulation, i.e. a new casualty caused by a marine peril, which would not trigger cover for total loss, since the vessel was freed.