“non-delivery of an entire package”

Many cargo assured are under the impression that the inclusion of this risk in their policy entitles them to claim for any loss (of an entire package) which has occurred at any time, and from any cause, during the voyage. This is not so, as the following examples should make clear:

(a) A case of fireworks is short delivered at destination, and the carrier explains that it was seized by the Customs authorities at an                  intermediate port, as they considered it to be hazardous cargo. This is not a loss by non-delivery; it is a loss by “seizure”, which is an excluded peril (Clause 6.2 of Institute Cargo Clauses).

(b) A case of fireworks is short delivered, but this time the carrier explains that the master ordered the case to be thrown overboard; since he considered it to be a danger to the other cargo on board. This is not a loss by non-delivery; it is a loss by jettison, and unless there was wilful misconduct on the part of the assured in shipping the fireworks, or in misdescribing them, there will be a claim under Institute Cargo Clauses without the addition of the Theft, Pilferage and Non-Delivery Clause.

(c) One package is short delivered and, after inquiry, the carrier “regrets that it may have been delivered to another consignee by mistake”. This is a non-delivery as regards the bill of lading holder and, subject to his holding the carrier responsible as he is required to do by Clause 16.2 of the Institute Cargo Clauses; he will have a valid claim under the Institute Theft, Pilferage and Non-Delivery Clause.

(d) A case is short delivered and, after inquiry, it appears to have been over-carried to another port, and the ship’s agent claims that he does not know what to do with it. In this case, although there has been a “non- delivery” in the ordinary sense of that word, there is no loss to the subject – matter insured, which is perfectly safe and sound. In fact it is the carrier’s duty to ship it back at his own expense to the port to which it was consigned and there tender it to the bill of lading holder.

(e) A case is short delivered and, after inquiry, no one can offer any plausible explanation for its disappearance. This is a loss by non-delivery, in circumstances which suggest that the package may have been stolen, although there is insufficient evidence to prove it.  This is the case where the cause of the loss is ejusdem generis* with theft or pilferage, so whatever construction might be required of the words in the clause, the loss will be paid for by the underwriters.

*ejusdem generis: Latin for “of the same kind” used to interpret loosely written statutes. Where a law lists specific classes of persons or things and then refers to them in general, the general statements only apply to the same kind of persons or things specifically listed. Example: if a law refers to automobiles, trucks, tractors, motorcycles and other motor-powered vehicles, “vehicles” would not include airplanes, since the list was of land-based transportation.

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