148. Clothing Management Technology Ltd v Beazley Solutions Ltd1

Actual total loss—constructive total loss—sue and labour—whether valued policy

The claimant assured, a clothing manufacturer, contracted with Beltrame, a Moroccan company, for the production of garments. Industrial unrest in Beltrame’s Moroccan factory jeopardised completion of work. A payment by the assured directly to the factory workers secured the release of a consignment of garments. After shipment of a further consignment, the assured supplied a substantial additional quantity of fabric to the factory. Thereafter, industrial relations deteriorated rapidly and the prospects of recovering the fabric and completed garments (the “stock”) diminished. Although the risks to which the stock was exposed in principle fell to some extent outside the scope of the Marine Insurance Act 1906, the policy under which the stock was insured provided that it was subject to the rules of marine insurance and incorporated the Institute Cargo Clauses (A) (1/1/82) and the Institute Strikes Clauses (Cargo) (1/1/82). It provided that the “basis of valuation” was the “invoice value”. The assured claimed for a total loss of the stock not recovered from Beltrame’s factory valued at the price it would have charged its customers for the garments that would have been completed from the stock.