Limitation of insurance claims in international maritime insurance

Supreme Court judgment 4 February 2020, HR-2020-257-A, (case no. 19-053865SIV-HRET), civil case, appeal against judgment. 

I.
Assuranseforeningen SKULD (Gjensidig)
SKULD Mutual Protection and Indemnity Association (Bermuda) Ltd (Counsel Atle Johansen Skaldebø-Rød)

v.

Assuranceforeningen Gard – gjensidig
(Counsel Bjarne Andreas Meidell)
(Assisting counsel: Stephen Knudtzon)

II.
SwissMarine Services S.A.
(Counsel Bjarne Andreas Meidell)
(Assisting counsel: Stephen Knudtzon)

v.

Assuranseforeningen SKULD (Gjensidig)
SKULD Mutual Protection and Indemnity Association (Bermuda) Ltd (Counsel Atle Johansen Skaldebø-Rød)

Justices: Webster, Normann, Bull, Bergh, Steinsvik

A vessel damaged while in port in China was chartered under several charterparties in a chain. An arbitral award in London in 2016 ruled that the damage was due to breach of the charterparty provision that the vessel could only call at "safe ports". Each of the charterers was consequently liable towards the preceding links in the charterparty chain. One of the charterers (SwissMarine) submitted a claim for damages against the subsequent link in the charterparty chain (Transfield). SwissMarine was insured in Assuranceforeningen Gard (Gard). Transfield was insured in Skuld (Skuld). After Transfield's insolvency, Swiss Marine submitted a direct claim against Skuld, see section 7-8 subsection 2 of the Insurance Contracts Act. Also Gard, having settled the claim against SwissMarine from a previous link in the charterparty chain, submitted what was in effect the same claim, although with a slightly reduced amount, in the form of a recourse claim towards Skuld, based on its right of subrogation. Separate proceedings were held with regard to possible limitation, see section 16-1 of the Dispute Act. The Supreme Court held that Section 1-3 of the Insurance Contracts Act permits contracting out of the limitation provision in section 8-6 of the Insurance Contracts Act. In the relationship between Skuld and Swiss Marine, the parties agreed before the Supreme Court that the limitation issue should be regulated by the Limitation Act, and not by the limitation clause in Skuld's insurance agreement. The Supreme Court did not consider whether sections 3 and 10 or section 9 of the Limitation Act applied. It was assumed that the shipmaster's statement before the arbitral tribunal, given on 18 November 2015, was crucial for the arbitral court's ruling on the liability issue. Consequently, only then did SwissMarine and Gard gain sufficient knowledge of the liability issue to commence legal proceedings against Skuld concerning the direct claim, with the effect of the limitation period for that claim starting to run. A complaint was brought to the conciliation board on 22 September 2016. The period of limitation was thus interrupted in time, regardless of the application of either sections 3 and 10 or 9. When SwissMarine's claim was not time-barred under the provisions of the Limitation Act, the same had to apply for Gard's claim. Against this background, the Supreme Court consequently found that neither of the claims was time-barred.

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