European Group Ltd & Ors v Chartis Insurance UK Ltd. [2012] EWHC 1245 (Comm) (11 May 2012)

European Group Ltd & Ors v Chartis Insurance UK Ltd. [2012] EWHC 1245 (Comm) (11 May 2012)

The court found, on the balance of probabilities, that the fatigue cracking was caused by resonant vibration during road transit due to missing packing, not by wind excitation after arrival. The inherent vice exclusion did not apply because the proximate cause was external vibration, not solely a defect in the tubes or welds. The Claimants, as assignees, were entitled to recover the settlement sum less the Defendant's own EAR share.

Citation
[2012] EWHC 1245 (Comm)
Parties
Claimant: European Group Limited; Claimant: Allianz Global Corporate and Speciality AG (UK Branch); Claimant: Chartis Insurance UK Limited; Claimant: HDI-Gerling Industrial Insurance (UK Branch); Claimant: Mitsui Sumitomo Insurance Underwriting at Lloyd's Limited; Claimant: AF Beazley (Syndicate 2623/623) at Lloyd's; Defendant: Chartis Insurance UK Ltd
Jurisdiction
England and Wales
Judgment Date
11 May 2012
Procedural Posture
Commercial Insurance Dispute / High Court Judgment After Trial
Outcome
Claim allowed
Legal Topics
Property Insurance Coverage, Causation of Loss, Concurrent Insurance Policies, Subrogation and Assignment, Inherent Vice Exclusion, Quantum of Loss
Insurance Law Commercial Law Property Insurance Coverage Causation of Loss Concurrent Insurance Policies Subrogation and Assignment Inherent Vice Exclusion Quantum of Loss

Case Brief

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Parties

European Group Limited

Claimant

Allianz Global Corporate and Speciality AG (UK Branch)

Claimant

Chartis Insurance UK Limited

Claimant

HDI-Gerling Industrial Insurance (UK Branch)

Claimant

Mitsui Sumitomo Insurance Underwriting at Lloyd's Limited

Claimant

AF Beazley (Syndicate 2623/623) at Lloyd's

Claimant

Chartis Insurance UK Ltd

Defendant

Procedural Posture

Commercial Insurance Dispute / High Court Judgment After Trial

Legal Issues

  1. 1 Whether fatigue cracking damage to economiser tubes occurred during transit (covered by Marine Policy) or after arrival on site (covered by EAR Policy)
  2. 2 Whether inherent vice exclusion in Marine Policy applies
  3. 3 Quantum of recoverable loss

Ratio Decidendi

The court found, on the balance of probabilities, that the fatigue cracking was caused by resonant vibration during road transit due to missing packing, not by wind excitation after arrival. The inherent vice exclusion did not apply because the proximate cause was external vibration, not solely a defect in the tubes or welds. The Claimants, as assignees, were entitled to recover the settlement sum less the Defendant's own EAR share.

Court Disposition

Claim allowed

Orders

  • Defendant to pay Claimants £3,680,000 plus interest
  • Costs to Claimants