KULUKUNDIS AND OTHERS v. NORWICH UNION FIRE INSURANCE SOCIETY, LTD.

(1936) 55 Ll.L.Rep. 55

COURT OF APPEAL.

Before Lord Justice Slesser, Lord Justice Greene and Lord Justice Scott.

Marine insurance-Freight-Total loss- Policy covering "chartered freight and/or freight"-Cargo loaded for U.K. under charter providing for lump sum freight of £8000-Stranding of vessel during chartered voyage-Vessel valued under her hull policies at £25,000, to pay £7500 in event of total loss-Salvage agreement entered into by master with salvage company on "no cure no pay" terms-Notice of abandonment subsequently given to underwriters, hull underwriters agreeing to settle for £7500 and to undertake all liabilities for which vessel was answerable -Cargo-owners notified that adventure at an end-Total loss paid by cargo underwriters-Ship and cargo surrendered by underwriters to salvors (ship being temporarily repaired by salvors, part cargo taken in repaired vessel to Rotterdam, and vessel sold there by salvors for breaking up) -Claim by shipowners for total loss under freight policy-Institute Voyage Clauses (Freight): "(4) In the event of the total loss, whether absolute or constructive, of the vessel, the amount underwritten by this policy shall be paid in full, whether the vessel be fully or only partly loaded or in ballast, chartered or unchartered. (5) In ascertaining whether the vessel is a constructive total loss the insured value in the policies on ship shall be taken as the repaired value and nothing in respect of the damaged or break-up value of the vessel or wreck shall be taken into account"-Contention by plaintiff shipowners that there was a total loss of freight which necessarily arose from the constructive total loss of cargo or ship; further, that they were entitled to recover because the charter voyage was frustrated by reason of the fact that it had become unremunerative to continue it-Denial by defendant insurers that there was a constructive total loss of ship or cargo.