Bayswater Carriers v. QBE Insurance
DMC Rating Category: Developed
This Case Note was contributed by Ang & Partners, the Website’s International Contributors for Singapore
(2) The tug had also been obtained for the personal gain of the perpetrators. This is where piracy differs from maritime terrorism, which is unlikely to be for "private ends".
(3) The Judge also found that it was not necessary that the piratical act take place on the high seas. It may occur within territorial waters or on the high seas. All that has to be established is that the act of piracy was committed on the sea and it is immaterial that the insured vessel was lying at anchor or moored as in this case. Thus, the fact that the theft of the tug occurred within the port limits of Batu Ampar, Batam, was immaterial. In any event, the expression "port limits" in this case was at best ambiguous as there was no evidence as to where exactly the tug was at the time of the attack.
(4) The Judge then went on to also consider whether the loss could also have been due to violent theft by persons outside the tug under Clause 6.1.3 – another ground for engaging policy liability. QBE’s position on this point was that the tug was lost due to the negligence of the crew, in that there was no watchkeeping at the relevant time and that Bayswater, by allowing two key crew members to take shore leave, had contributed to the inability of the crew to keep a proper watch over the tug. The Judge however found that these omissions fell short of being the proximate cause of the loss.
(5) QBE had a counterclaim against Bayswater on the ground of
breach of Bayswater’s obligations to take such measures as may be reasonable
to avert or minimise the loss. Some criticisms lodged against Bayswater included
failure to offer rewards; failure to subscribe to International Maritime Bureau
Special Alert; and failure to actively pursue/search for the tug through its own
contacts. The Judge found that whatever evidence QBE led as to what a prudent
insurer expected of its assured was irrelevant. The important point was what an
insured, acting as a prudent uninsured, would have done but there was no
evidence as to how a reasonable prudent uninsured would have acted. In any
event, the judge found QBE’s complaints against Bayswater unwarranted and
dismissed its counterclaim.
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