Perils of the Seas and Inherent Vice in Marine Insurance Law
Fortuity and ‘perils of the seas’
A statutory definition of ‘perils of the sea’ is provided for in Rule 7 of the Marine Insurance Act (MIA) 1906. This definition only includes fortuitous accidents or casualties of the seas, whereas the ordinary action of the winds and waves is outside its scope. Thus, the MIA 1906 definition includes fundamental features that illustrate the ‘perils of the sea’ and that can be distinguished from other marine perils. Consequently, the insured must establish two fundamental elements to show that a loss has been caused by the ‘perils of the sea’; these are, ‘fortuity’ and that the loss is ‘unordinary’. On the other hand recent case law is reluctant to consider fortuity when deciding whether the cause of loss results from ‘perils of the sea’. In particular, after the Supreme Court decision in The Cendor MOPU, the context of ‘fortuity’ was interpreted differently. Accordingly, the wider concept of ‘perils of the sea’ was embraced, and ‘the older extraordinary incidents arising from the sea and weather conditions test’ is no longer applicable. The Supreme Court stressed the extraordinary effect of the ‘action’ rather than the appearance of the winds and waves.