OULU OSAKAYETIO v. ARNOLD LAVER & CO., LTD., AND OTHERS.

(1940) 66 Ll.L.Rep. 167

COURT OF APPEAL.

Before Lord Justice Slesser, Lord Justice Luxmoore and Lord Justice Goddard.

Sale of goods-War risk insurance-Contracts dated Oct. 6 and 7, 1938, for sale of timber by Finnish shippers to English buyers-Charter of Spanish steamer by shippers' agents on Oct. 18 -Copies of charter sent to buyers on Oct. 26-Clause of contract of sale providing that "Before or as soon as tonnage is secured the marine insurance of cargo at f.o.b. invoice value plus 10 per cent. and of freight advance to be covered by sellers with a first-class company or underwriters . . . as per Lloyd's form of policy, together with Federation Clauses printed in margin, losses payable in London and including the risks covered by the Institute War and Strike Clauses in force at the time of attachment of the insurance. Any increase in premium payable for covering the whole of such war risks and such strike risks in respect of the country of destination in excess of the rates ruling at 26th September, 1935, to be for buyers' account. Sellers' obligation under this contract to insure against war and/or strike risks is subject to the proviso that such insurance can be covered. Should it not be possible to cover such insurance, or should insurance be cancelled by underwriters, sellers shall give prompt telegraphic advice to buyers who shall thereupon have the option of cancelling the contract" -Insurance effected by shippers, cover note providing that "Wood goods in and over including freight advance, if any, per El Neptuno to Hull including war, etc., risks at 3s. 6d. per cent. sailing on or before 5th November, 1938, held covered thereafter at schedule rate on date of sailing but subject to 48 hours' notice of cancelment unless sailing on or before 28th November, 1938"-Sailing delayed until after Nov. 5-Schedule rate at date of sailing: 2s. 6d. per cent. - Substantial rise in war risk rates in respect of Spanish vessels - Premium fixed by shippers at £5 per cent.-Rate ruling at Sept. 26, 1935: 3d. per cent.- Liability of buyers to pay increase in premium-Construction of contract- Chartered ship belonging to belligerent -Onus of proof that such charter was justified - Arbitration - Award in favour of shippers-Case stated.