Cl. 15-17. Loss in connection with a call at a visitation port, temporary stay, etc.

Cl. 15-17 reads:

The insurer is also liable for loss of time if the ship is brought to a port by a foreign State power for the purpose of:

  1. visitation and search of cargo, etc.
  2. capture and temporary detention.
If the assured is entitled to compensation for total loss under Cl. 15-11 or Cl. 15-12, he is not entitled to compensation under this section beyond the first month of the loss of time. If compensation has already been paid, it shall be deducted from the total loss compensation.

As opposed to Cl. 15-16, only detention in port is relevant in this case, there is no extension to a detention in a "similar limited area".  The Commentary does not suggest any reason for the restriction and does not offer any assistance in interpreting the word "port". We venture that port must be read somewhat liberally, but certainly excluding mere stoppage at sea. The words "brought to a port" suggest that the vessel must be brought to a place which is a safe port for the vessel insofar as marine risks are concerned. In this context, the Arabian Gulf is not a port. It may be questioned whether satisfactory cover is provided to the assured, as it is difficult to understand why the insurer cannot cover any loss of time in excess of the agreed deductible period caused by a detention by foreign state power, regardless of whether the vessel is detained in port or at sea.

The Commentary to Cl. 15- 17 suggests that detention for customs purposes is included in Cl. 15-17, and refers to an unpublished Norwegian arbitration award by Brækhus, the "Germa Lionel" commented on in Kaskoboken on pages 73-73 and 239-240 and in Handbook in Hull Insurance, by Bull and Wilhelmsen on page 95. This is somewhat misleading because the facts surrounding «Germa Lionel» are better classified as an aggressive intervention by a state power than a mere detention for customs purposes. The intervention by a state power to exercise customs and other normal civil authority is undoubtedly a marine peril, see the Commentary to Cl. 2-9, sub-clause 1, letter (b), where it is stated: "The war risk insurance therefore does not cover losses arising from the ship being detained by the authorities ……because the crew is suspected of smuggling."

The "Germa Lionel" was detained by Libyan authorities for two months.  The vessel came from London where there had been an 11 day siege at the Libyan Embassy following a protest at which a policewoman had been shot and killed. When the vessel arrived in Libya, the crew were interrogated and one crew member died as a result of torture. The whole cargo was searched. It was never clarified what the Libyan authorities were looking for, but apparently they realised that they made a mistake because the vessel was released unconditionally (and without the slightest apology). The arbitrator held that it was the war risk insurer that should compensate part of the extra expenses etc. pursuant to provisions similar to Cl. 3‑17.  He held that the action of the Libyan authorities was an intervention pursuant to Cl. 2-9, sub-clause 1(b), but emphasised that whatever reason the Libyan authorities had for their intervention, they went far beyond what could be considered the exercise of normal civil authority for a port state.

Intervention by a foreign state power and blocking and trapping depriving the assured of the use of the vessel for more than twelve months entitles the assured, if caused by a war peril, to claim total loss compensation pursuant to Clauses 15-11 and 15-12. If so, according to Cl. 15-17, sub-clause 2, the assured is not entitled to loss of time compensation for more than the first month, which corresponds to the period the insurer is not obliged to pay interest on the total loss compensation, cp. Cl. 5-4, and see under 13 above. In this context, any payment under his war risks hull insurance less than the total loss compensation does not deprive the assured of his right to claim loss of hire. If the assured has been compensated for loss of time during the twelve-month period, such compensation in excess of one month is deducted from the total loss compensation cp. the last sentence of Cl. 15-17.

This does not create any difficulty if both insurances are covered by the same insurer, as Chapter 15 presupposes. If that is not the case, it is difficult to see how the two insurances can be combined in this manner, particularly if the war risk hull cover is covered on foreign conditions but war risks loss of hire is covered on the basis of Chapter 16 with extensions as per Section 6 of Chapter 15. If the assured is not entitled to any total loss compensation under his war risks hull cover in case of interventions by foreign state power or blocking and trapping lasting for more than twelve months, then, of course, the war risks loss of hire insurer must pay in full as per their policy.

If the assured is entitled to total loss compensation under his war risk hull cover, the war risk loss of hire insurer must become subrogated to the assureds claim for total loss, see Cl. 2-6 sub-clause 2. Admittedly this solution is not readily apparent from the wording of Cl. 2-6, but the loss of hire insurance must be deemed to be subsidiary to the hull insurance in this regard. If the insurer who is secondarily liable has already paid, he must be entitled to be subrogated to the assured’s claim against the primary insurer in accordance with the general rules on subrogation. The special rule on subrogation in Cl. 5-13 is not applicable, see the Commentary to Cl. 5-13 where it is expressly stated that Cl. 2-6 on double insurance shall govern.

The Commentary to Cl. 15-17 states that Cl. 15-17, sub-clause 2, is a general rule, which may imply that it is also applicable in relation to the extended blocking and trapping cover under Cl. 15-16, sub-clause 2. The reference in Cl. 15-17, sub-clause 2 to Cl. 15-12 supports this understanding of the Commentary, but apart from that, the wording of Cl. 15-17 only deals with situations where a vessel is trapped in port after having been brought into the port by a foreign state power.

If a vessel is trapped in a port which was entered freely, because the port is subsequently blocked after bombing or mining, it is indeed difficult to read into Cl. 15-16 the limitations contained in Cl. 15-17, particularly since Cl. 15-18 expressly refers to Cl. 15‑17. One would have expected such a reference also in Cl. 15-16, if the same limitation of cover should apply. On the other hand there is no reason to treat these cases differently. If the assured obtains full compensation for total loss, there is no reason for him to get loss of hire compensation in addition, cp. the discussion under 4.1 above. It seems that the Commentary is correct on this point, provided that it is read as suggested above.