SVERIGES ANGFARTYGS ASSURANS FORENING (THE SWEDISH CLUB) AND OTHERS V CONNECT SHIPPING INC AND ANOTHER (THE “RENOS”)

[2019] UKSC 29, UK Supreme Court, Lord Reed, Deputy President, Lord Hodge, Lord Lloyd-Jones, Lord Kitchin and Lord Sumption, 12 June 2019

Insurance (marine) – Vessel damaged by fire - Measure of indemnity – Constructive total loss – What costs counting towards calculation of measure of indemnity – Meaning of “cost of repairing the damage” – Hold harmless doctrine – Effect of notice of abandonment – Whether salvage costs incurred prior to notice of abandonment could be included – Whether costs incurred under SCOPIC clause counting towards constructive total loss – Marine Insurance Act 1906, sections 60 and 62

The vessel Renos was insured for US$12 million under a marine policy, and a further US$3 million under an increased value policy. The vessel was damaged by fire on 23 August 2012. The assured gave notice of abandonment and claimed that the vessel was a constructive total loss, whereas the insurers asserted that there was a partial loss only. The Court of Appeal ([2018] 1 Lloyd’s Rep 285), upholding Knowles J at first instance ([2016] 2 Lloyd’s Rep 364), had held that there was a constructive total loss. The insurers appealed.