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CHAPTER 2 Historical overview of ‘perils of the seas’ and ‘inherent vice’ in marine insurance law

Perils of the Seas and Inherent Vice in Marine Insurance Law

Page 9 CHAPTER 2 Historical overview of ‘perils of the seas’ and ‘inherent vice’ in marine insurance law Introduction The phrase ‘perils of the sea’ is the most controversial and crucial part of marine insurance law. Moreover, the crucial elements of ‘perils of the sea’ were described in older cases as “extraordinary” and “unforeseeable”. Nevertheless, over the years, despite what constituted ‘perils of the sea’ being analysed in case law, the complex issue remained unresolved. Rule 7 of the Rules for Construction of Policy in the First Schedule of the Marine Insurance Act 1906 (UK) (‘MIA UK’) drafted by Sir Mackenzie Chalmers states that “[t]he term “perils of the sea” refers only to fortuitous accidents and casualties of the seas. It does not include the ordinary action of winds and waves”. 1 The rule is repeated in Sch 2 of the Australian Marine Insurance Act 1909 (Cth) (‘MIA Cth’). In general, the law in Australia in the marine insurance context is the same as English law. There does not appear to be any significant disparity between the approaches taken by the English and Australian courts in interpreting these provisions of the MIA UK and the MIA Cth. 2

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