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Millers Marine War Risks


Page 105

CHAPTER 13

Arrest, restraint, detainment …

General

13.1 In addition to capture and seizure, the Institute Clauses also refer to “arrest, restraint and detainment”. This is similar to the S.G. Form’s perils of “arrests, restraints, and detainments of all Kings, Princes and people, of what nation, condition or quality soever”. Rule 10 of the Marine Insurance Act 1906 Rules for construction of policy provided that this term referred to political or executive acts, and did not include riot or ordinary judicial process. Although that Rule no longer applies, the same effect is achieved1 by the express exclusions of quarantine, customs or trading regulations (Clause 4.1.5) and of ordinary judicial process (Clause 4.1.6). Exclusions are considered in .

Arrest

13.2 As noted in paragraph 13.1, ordinary judicial process is excluded, and the effect of the exclusions as a whole is to limit the peril of “arrest” to political or executive acts. It is not clear what sort of event is covered only by this peril, particularly when it is found together with the broad perils of “seizure”, “restraint” and “detainment”. In Rodocanachi v. Elliott,2 Brett J suggested in argument that “seizure” is a taking possession of goods for the purpose of confiscating them, “arrest” is a taking with the intention of restoring them at one time or other, and “restraint” is preventing the goods from being got away, without laying hands upon them. On this classification, distinctions are to be drawn between perils which involve a taking of the property (seizure and arrest) as against those which simply impede the property (restraint), and between perils which are permanent (seizure) and those which are temporary (arrest and restraint). In his judgment, Brett J held that it was not an arrest where goods were besieged, since arrest required that the goods be seized and taken out of the possession of the owner.3 An embargo is not a capture or seizure since it leaves the property in the possession of the owner.4 However, in Johnston v. Hogg,5 Cave J said that it was impossible to give distinct and different meanings to such words as “capture”, “seizure”, “arrest”, “detention” and “restraint”. Whilst it would be going too far to suggest that these perils cannot be differentiated at all, it is clear that the terms all overlap to some degree.

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Restraint

13.3 As noted in paragraph 13.1, ordinary judicial process is excluded, and the effect of the exclusions as a whole is to limit the peril of “restraint” to political or executive acts. The word “restraint” has a wide commercial meaning.6 It may be a lawful or unlawful restraint.7 It is a word more properly applicable to persons than to goods, so that a restraint of goods means a restraint of those having the custody of goods.8 The words “restraint of princes” have the same meaning in charterparties and insurance policies;9 and it is a restraint “of princes” if it is an act of a sovereign state or prince.10 There may be an overlap between restraint and seizure.11 13.4 A blockade is a restraint, provided the blockade is effective; it is effective if the enemies’ ships are in such numbers and position as to render the running of the blockade a matter of danger, although some vessels may succeed in getting through.12 There is no difference in principle between a siege, a blockade and an embargo, so far as regards the question whether it amounts to a restraint.13 In both a besieged or blockaded town or port, the detention is the act of a sovereign power, and it does not matter whether it is the act of the State in which the goods are, or the act of the enemy.14 However, there is no restraint unless the ship or cargo is within a blockaded port; there is no restraint if the vessel voluntarily refrains from entering a port for fear of becoming subject to a blockade.15 There is nevertheless a restraint if the ship is within the port and liable to have its cargo destroyed if it does not leave.16 Where a ship is ordered into port by the flag state in anticipation of war breaking out, and for the purpose of taking control of cargo onboard all, there is also a restraint of princes or people.17 The requisition of a ship is also a restraint of princes,18 though such a restraint is subject to express exclusion (Clause 4.1.3). 13.5 A limitation, restriction or confinement may be a restraint if imposed by the application of external force without taking possession of the person or goods which are

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restrained.19 Goods are restrained or detained where they are by the application of a hostile force prevented from being carried to their destination.20 However, there need not be actual force used if the Master submits to the orders of the authorities.21 13.6 In Miller v. Law Accident Ins,22 a government prohibition on the import of diseased cattle, which prevented a cargo entering the port of discharge, was held to be a “restraint” of people, as it was an act of State and not analogous to an arrest to enforce the rights of a private individual.23 The claim was dismissed on the basis of the f.c. & s. warranty. The situation was distinguished from the line of cases which hold that there is no restraint where the vessel refrains from entering a blockaded port on the basis that the Master did not act voluntarily, since the government intervened and detained the cattle on board the vessel by the prohibition on landing.24 There was a restraint because the Master was subject to the jurisdiction of the local authorities. In the case of voluntarily refraining from entering a port, the Master will successfully avoid being subject to the control of the authorities.

Detainment

13.7 As noted in paragraph 13.1, ordinary judicial process is excluded, and the effect of the exclusions as a whole is to limit the peril of “detainment” to political or executive acts. The word “detainment” has a wide commercial meaning.25 It means the same as “detention”.26 A vessel is detained in a commercial or conditional sense if it is unable to leave without infringing regulations and would have been stopped by force if it had tried to do so.27 13.8 Where the ship is unable to leave port on its voyage due to an embargo, there is a detention.28 However, if the Master refrains from entering the port of destination in order to avoid confiscation, there is no “detention of princes”, only an apprehension of the same.29 The fact that a detention is under the ordinary laws is not fatal to a claim.30

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13.9 The detention must be fortuitous.31 In The Wondrous, the voluntary conduct of the shipowners in not paying port dues, leading to the ordinary consequence that the vessel was not cleared for departure, was not a fortuity.32 However, that the vessel could only be cleared for departure by shipowners discharging the financial obligations of the exporter and Charterer in respect of the cargo was fortuitous, as it was not an ordinary incident of ownership of the vessel or of trading.33 13.10 In The Wondrous, Lloyd L.J. held that if a vessel were detained by reason of the expiry of her International Safety Certificates that would not be a detainment within the perils insured.34 It is not clear whether this would be on the grounds that it was not a fortuity, an analysis relied on by Hobhouse J. at first instance, or because the perils were to be read together with the exclusions, as Lloyd L.J. held.

Cases illustrating the insured peril

13.11 It was at one time thought that every subject consented to, and adopted as his own, every act of his government and this was so decided in Conway v. Gray.35 This being so, a claim could not be made for the restraints of a subject’s own Prince. This was overruled by the Court of Exchequer Chamber in Aubert v. Gray.36 In 1859, 30 bales of carpets were insured on the S.G. Form for shipment from London to Alicante on board the Jovellanos. The shipowner and the cargo owner were both Spanish subjects. The policy contained the insured perils of: “Arrests, restraints, and detainments of all Kings, Princes and people of what nation, condition or quality soever”. There was no f.c. & s. Clause. 13.12 In Corunna, the ship was embargoed by the Queen of Spain to carry troops to fight in the current war between Spain and Morocco. The cargo was discharged during bad weather and was unceremoniously dumped on the quayside. The weather continued wet and rainy and the carpets were severely damaged. The court’s judgment was read by Erle C.J.: “The restraint of a Prince caused the loss, the assured have used the words which expressed that they are to be indemnified against any restraint from any Prince”;37 and:

The assertion that the act of the government is the act of each subject of that government is never really true. In representative governments, it may have a partial semblance of truth; but in despotic governments it is without that semblance.38

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