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Lloyd's Maritime and Commercial Law Quarterly

ENGLISH MARINE INSURANCE AND GENERAL AVERAGE LAW

James Davey*

Cases

141. Ace European Group Ltd v Chartis Insurance UK Ltd 1

Multimodal transportation—power station parts—construction (EAR) policy—marine all risks policy—proximate cause—vibration damage

This litigation concerns vibration damage to “economisers” which formed part of power station boilers under construction at Lakeside near Slough, United Kingdom. These were large (3.6m × 2.8m × 6.3m) and reasonably complex structures (with 24 rows of 40 pipes welded in a set pattern). Fourteen of the economisers were transported from their place of manufacture in Bucharest by a road/sea/road voyage, the other two travelling by road alone. The 14 shipped by sea were covered by a combination of a marine all risks policy (the “Primary Marine Project Cargo/Delay in Start-Up Insurance Policy”, hereafter the “marine policy”) and a construction all risks policy (“Erection All Risks, Public Liability and Delay in Start Up Insurance Policy”, hereafter the “EAR policy”). The marine policy ran from the moment of departure from the factory of manufacture to delivery at Lakeside, the EAR policy from the moment that lifting gear was attached to the goods on site. Any loss occurring between delivery and the attachment of lifting gear was therefore not insured under this configuration of cover. However, in the event of the proximate cause of damage after the goods left the factory not being determined, the marine and construction policies stipulated (by way of a 50:50 clause) that the insurers would each bear an equal share of the loss.
This litigation concerns the parts shipped by sea and covered by the marine policy. Fourteen economisers were transported by road from their place of manufacture in Bucharest to the Romanian port of Constanta and then shipped to Southampton on two separate vessels. The voyage was completed by a further road journey to the destination near Slough. The economisers were then stored on site for between 4–6 months prior to installation. During pre-installation checks, the parts were found to have suffered from metal fatigue. It was common ground that this resulted from “resonant vibration”. The marine insurer asserted that this arose from vibration caused by wind whilst stored on site (and was therefore outside the marine cover). The EAR insurer settled the claim at


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