AXL RESOURCES LTD V ANTARES UNDERWRITING SERVICES LTD

[2010] EWHC 3244 (Comm), Queen's Bench Division, Commercial Court, Mrs Justice Gloster, 14 December 2010

Insurance (all risks) - Mysterious disappearance clause - Cobalt disappearing from warehouse - Burden of proof - Interest

AXL, a company carrying on the business of metal trading, was insured against all risks of loss under a Lloyd's Marine Open Cargo Policy issued by the defendants. The policy excluded "Mysterious Disappearance and Stocktaking Losses". A cargo of cobalt belonging to the assured disappeared from a warehouse in Antwerp in unexplained circumstances sometime between 21 October 2008 and 27 January 2009, and the insurers denied liability. The assured sought summary judgment, and by the time of the trial there was evidence in the Belgian police files that there had been an organised theft. Gloster J held that the assured was entitled to summary judgment, on the ground that theft had been established. On this analysis there was no need to consider the relationship between the all risks cover and the mysterious disappearance clause but in her view, the assured bore the burden of proving a fortuitous loss, and thereafter the burden of proof switched to the insurers to prove that the loss was mysterious. On the facts they were unable to do so. The court also held that interest should run from 1 April 2009 rather than from the usual month after the date of the loss, because the claim made on 27 January 2009 was very brief and contained no detail and because the loss adjuster's report was not completed until 12 March 2009.