Lloyd's Maritime and Commercial Law Quarterly
THE LOSS OF GOODS DUE TO INHERENT VICE
T.M. Noten B.V. v. Harding
The transport of goods by sealed container brings many commercial advantages.1 Coupled with these advantages are new risks of damage during transit, caused by the particular environmental conditions that can arise inside such a container. This raises the legal problem of the limits of insurable risk. The facts of T. M. Noten B. V. v. Harding
2 illustrate the kind of risk that may be encountered during the transport of perishable goods inside a sealed container on a long voyage through different climactic zones. The case raises the question of when it is appropriate to view any resulting losses as being caused by inherent vice rather than by an insured peril.
On the facts,3 the plaintiffs were Dutch importers of commodities, including industrial leather gloves. Their principal supplier of such gloves was Artonex, a Calcutta-based manufacturer. Artonex manufactured the gloves from cowhide supplied by various tanneries in Calcutta. The manufacturing process would have driven out moisture to a degree. After manufacture the gloves were wrapped in bundles of 12-in. kraft paper wrappers and placed in double walled corrugated cardboard (fibreboard) cartons, each containing 120 pairs. The cartons were sealed with adhesive tape, secured by plastic bands and transported to the docks in tarpaulin covered vehicles. At the dockside they were packed into standard 20-ft. closed top containers. The goods were then shipped from Calcutta to Rotterdam. The plaintiff’s claim was in respect of four shipments of gloves, three of which were shipped from Calcutta to Rotterdam in 1982 and the fourth of which was shipped from Calcutta to Rotterdam in 1983. In each case, on unpacking, the gloves were found to be wet, stained mouldy and discoloured. The plaintiffs sustained a loss of D.FI.160,866.53.
The plaintiffs had insured the gloves with Lloyd’s underwriters, of whom the defendant was a representative. The 1982 shipments were insured under the terms of the Institute Cargo Clauses (All Risks). Those clauses included the exclusion:
This insurance … shall in no case be deemed to extend to cover loss damage or expense proximately caused by … inherent vice or nature of the subject matter insured.
The 1983 shipment was covered by the Institute Cargo Clauses (A). Those clauses also contain such an exclusion.
It was common ground that in each case the damage was caused by the condensa
1. See Alan Branch, Elements of Export Practice (Chapman and Hall, 2nd edn., 1985), Chap. 4.
2. [1989] 2 Lloyd’s Rep. 527 Q.B. (Com.Ct.: Phillips, J.); [1990] 2 Lloyd’s Rep. 283 (C.A.: Glidewell and Bingham, L.JJ., and Sir David Croom-Johnson).
3. Taken from the judgment of Phillips, J. [1989] 2 Lloyd’s Rep. at p. 528, col. 1, to p. 529, col. 2.
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