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Perils of the Sea
Last updated: 05-Jun-2015

Moss and Others v Smith and Another [1850] EngR 155; (1850) 9 CB 94; 137 E.R. 827 per Mr. Justice Cresswell at pp.105-106:

…when is the ship-owner said to be prevented by perils of the sea from fulfilling the contract he has entered into? When the ship is, by peril of the sea, rendered incapable of performing the voyage. A ship is not rendered incapable of performing the voyage when she is merely damaged to an extent which renders some repairs necessary: if that were so, any the most considerable damage, such as the loss of her rudder, without which she could not proceed,: would render her incapable of fulfilling the contract contained in the bill of lading. But, if a ship sustains so much sea-damage that she cannot be repaired, so as to be rendered competent to continue the adventure, then the owner is prevented by a peril of the sea from fulfilling his contract. If the ship is totally destroyed or sunk, the performance of the contract is obviously prevented by a peril of the sea. The courts of law have also engrafted this qualification upon the contract, – that, if the damage which results from a peril of the sea, is so great that it cannot be repaired at all, or only at a cost so ruinously large that no prudent owner would undertake the repairs, the owner may treat the loss as total, and say that he is prevented by a peril of the sea from performing his contract.

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Jackson v Union Marine Insurance Co (1874) LR 10 CP 125 at 145, 2 Asp MLC 435 at 443, Ex Ch per Bramwell B:

Now what is the effect of the exception of perils of the seas, and of delay being caused thereby? Suppose it were not there, and not implied, the shipowner would be subject to an action for the ship not arriving in a reasonable time, and the charterers would be discharged. Mr. Benjamin says the exception would be implied. How that is, it is not necessary to discuss, as the words are there: but, if it is so, it is remarkable as shewing what must be implied from the necessity of the case. The words are there. What is their effect? I think this: they excuse the shipowner, but give him no right. The charterer has no cause of action, but is released from the charter. When I say he is, I think both are. The condition precedent has not been performed, by the default of neither. It is as though the charter were conditional on peace being made between countries A. and B., and it was not; or as though the charterer agreed to load a cargo of coals, strike of pitmen excepted. If a strike of probably long duration began, he would be excused from putting the coals on board, and would have no right to call on the shipowner to wait till the strike was over. The shipowner would be excused from keeping his ship waiting, and have no right to call on the charterer to load at a future time. This seems in accordance with general principles. The exception is an excuse for him who is to do the act, and operates to save him from an action and make his non-performance not a breach breach of contractoes not take away the right the other party would have had, if the non-performance had been a breach of contract, to retire from the engagement: and if one party may, so may the other.

Lord Buckmaster put the matter as follows in the Privy Council in Grant, Smith and Co v Seattle Construction and Dry Dock Co [1920] AC 162, at p.171:

It is not desirable to attempt to define too exactly a "marine risk" or a "peril of the sea", but it can at least be said that it is some condition of sea or weather or accident of navigation producing a result which but for these conditions would not have occurred.

Per Dillon LJ in Lauritzen A.S. v Wijsmuller B.V. (The Super Servant Two), [1990] 1 Lloyd’s Rep. 1 at p. 11:

It has long since been held that such words bear the same meaning, as a matter of construction, in a bill of lading or contract of carriage as in an insurance policy - The Xantho [1886] 11 PD 170. In an insurance policy the words mean basically if not exhaustively an accidental incursion of seawater into a vessel at a part of the vessel and in a manner where seawater is not expected to enter in the ordinary course of things, with consequent damage to the thing insured. This applies whether the accident consists in some negligent act, or is due to negligence, or not…

There is, however, a very well recognized qualification that in an exceptions clause in a bill of lading excepting the shipowner from liability for perils of the sea there is by necessary inference to be read in an exception upon the exceptions that the exception for perils of the sea is not to apply if the loss was the result of the negligence of the shipowner or his servants. See the judgment of Lord Esher, M.R. in The Glendarroch, [1894] P. 226 at pp. 230- 231, especially where he said:

When you come to the exceptions, among others, there is that one, perils of the sea. There are no words which say "perils of the sea not caused by the negligence of the captain or the crew". You have got to read those words in by a necessary inference. How can you read them in? They can only be read in, in my opinion, as an exception upon the exceptions. You must read in, "Except the loss is by perils of the sea, unless or except that loss is the result of the negligence of the servants of the owner.

The basis for this qualification has been put on the ground that the contract in a bill of lading is to carry with reasonable care, unless prevented by the excepted perils, and that if the goods are not carried with reasonable care and are consequently lost, the reconciliation of the two provisions of the contract is that if the loss through perils of the sea was caused by a previous default of the shipowner he is liable for this breach of his covenant. But it seems also to have been put in the earlier cases on the basis that an exception to a shipowner’s or bailee’s duties in respect of the goods entrusted to him ought not, except by clear terms, to be construed as extending to absolve him from liability for his own negligence and want of care.

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