A Critical Note on the Nukila Case

A CRITICAL NOTE ON

PROMET ENGINEERING SINGAPORE LTD v NICHOLAS COLWYN STURGE & ors “The Nukila case”

Submitted by :

George Panagopoulos LLM Marine Insurance January 2009

Submitted to :

Professor Rob Merkin

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TABLE OF CONTENTS

Introduction The facts of the “Nukila” case The hearings Queen’s Bench Division (Commercial Court) Court of Appeal (Civil Division) The definition of the term “latent defect” The types of “latent defect” The legal provisions The Marine Insurance Act 1906 The policy The issues of the case The meaning of “part” Distinguishing between damage and “latent defect” Summary and Conclusion Appendix 1

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INTRODUCTION The aim of this essay is to review the “Nukila case”, a leading case related to the hull insurance of the “latent defect”. The case was judged in the first degree by the Commercial Court, Queen’s Bench Division1 and Judge Tuckey ruled that the assured failed to establish that there was damage to the vessel and the assured was denied coverage under the Inchmaree and additional perils clauses. The assured appealed and the Court of Appeal, Civil Division, on March 19972, allowed the appeal and the assured was able to recover under the policy. The coverage for damage caused to the subject matter by “bursting of boilers”, “breakage of shafts” and “latent defects” has developed gradually since the introduction of the Inchmaree clause back in 1889. The clause draws its name from the British steamship, the Inchmaree, which suffered serious damage of a donkey pump on account of a seized or negligently closed pump. The House of Lords decided in the case of Thames and Mersey Marine Insurance Co. v. Hamilton3 in 1887 that the loss was not caused by a “peril of the seas” as those perils are meant in the S. G. policy form. The shipping community reacted to this decision and a negligence clause was first introduced in the Institute Time Clauses 1889 providing coverage for loss or damage...