“Any claim based upon loss of or frustration of the voyage or adventure”
This clause was “undoubtedly invented from a desire to abrogate the effect of a case where only the adventure was affected by the peril, the goods being unaffected”. The case is commented, and it will be remembered that the declaration of war operated to make the adventure ipso facto (“by the fact itself,”) illegal; in other words, the restraint frustrated that adventure.
The clause will also have the effect of excluding such a claim as arose in the case of R v. E. In that case goods were insured from the Far East to the United Kingdom, with an overland transit through France. The goods got as far as Paris at about the time when that city became invested by the Prussian army in 1870, with the result that it became impossible to remove the goods from Paris and send them on to their destination. It was held that their detention within Paris was brought about “by the immediate and direct action of the German army”, and since “this was not a mere retardation of the voyage, but a breaking up of the whole adventure” the assured was entitled to abandon the goods to the underwriters and claim for a constructive total loss.
However, the words of Clause 3.7 do not mean that any claim which involves the loss or frustration of the voyage or adventure will be excluded. The exception applies only to claims which are “based upon” such loss or frustration, that is to say, such claims as, in the absence of the exclusion, would only be recoverable by virtue of a loss or frustration of the voyage. So, in a set of test cases which were taken to the House of Lords in 1941, it was held that when goods on board a number of German ships were diverted from their voyages by the actions of the German captains obeying the orders of their Government, there was a physical restraint upon the goods as well as a loss of adventure. Lord Wright said: “What happened here was that the master, being in possession of the goods as a carrier … seized them in the sense that he ceased to hold them as carrier and changed the character of his possession by taking and controlling them as agent for the German Government …” Thus, despite the inclusion of the “frustration clause” in the War Risk insurances, the owners of the goods were able to recover for their loss in each case.
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