The Maritime Advocate-Issue 663



1. Fraudulent Devices and the new Insurance Act
2. Is the Singapore Exchange Paying Over the Odds to Buy Out the
272-year-old Baltic Exchange?
3. Land Reclamation or Filling the Sea?
4. Japan P&I
5. Swarms of Drones with Self-Driving Trucks
6. People and Places

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1. Fraudulent Devices and the new Insurance Act

Helen McCormick of CTRL has written in with a note on how insurers
are taking the recent decision in the DC Merwestone case:-

At common law, insurers are not liable to pay a fraudulent claim. This
will still be the case under the new Insurance Act 2015, which comes
into force on 12 August, and s.12 of the Act also gives the insurer
a new right to terminate the contract.
However, the Act does not define a "fraudulent claim". Claims
which are fabricated or claims where the insured has dishonestly exaggerated
the amount of the claim are clearly fraudulent, but what about cases
involving a "fraudulent device" (also called a "collateral
lie"), where the insured has told a lie which is not actually relevant
to his claim because, for example, he has misunderstood the merits of
his claim or thinks it will result in his claim being paid more quickly
and with less hassle?

This question has recently been settled by the Supreme Court in Versloot
Dredging BV v HDI Gerling Industrie Versicherung AG, which held that
a "collateral lie" told as part of an insurance claim was
not sufficient to invalidate the whole claim. The Court also indicated,
obiter, that this will still be the case once the Insurance Act 2015
is in force.

The Facts
The Vessel suffered irreparable damage when her engine room was flooded.
Mr Justice Popplewell at first instance held that the proximate cause
of the damage was a peril of the sea, being the fortuitous ingress of
water through the sea inlet valve. However, when making their insurance
claim, Owners had had concerns about the condition of the vessel and
the failure of the crew to act on the bilge alarm. Accordingly, they
had provided a witness statement in support of their insurance claim
which said that the bilge alarm had sounded but the crew had been unable
to investigate or deal with the leak because of the rolling of the vessel
in heavy weather. Mr Justice Popplewell called this a "reckless
untruth" but decided that the lie was irrelevant to the merits
of the claim. In other words, it was a "fraudulent device".
Mr Justice Popplewell held that the entire claim must fail, referring
to the duty of good faith under s.17 of the Marine Insurance Act 1906.
The Court of Appeal upheld his judgment.

The Decision
The Supreme Court allowed the Owners’ appeal and held that the fraudulent
claims rule does not apply when the lie does not affect the existence
of the insured’s right to recover or amount of the insured’s entitlement.

The Insurance Act 2015
Will this still be the position after 12 August this year, when the
Insurance Act 2015 comes into force? While the Supreme Court did not
need to consider the new Act in reaching their decision, they did make
some obiter comments.
Section 12 of the Act codifies the fraudulent claims rule and the s.17
duty of good faith will be re-characterised as a duty of fair presentation.
However, the new Act does not resolve the question of what constitutes
a fraudulent claim. The scope of the fraudulent claims rule was deliberately
left open, with the intention that the Courts would resolve the question
of whether or not the rule extends to fraudulent devices. Now it has.
The Supreme Court (except for Lord Mance, dissenting) agreed that the
fraudulent claims rule should not be extended to cover fraudulent devices
and indicated, obiter, that the position would be the same under s.
12 of the Insurance Act 2015.

This decision and the Act can be seen as part of the general shift
towards a more insured-friendly regime.

See the Judgment here:-


2. Is the Singapore Exchange Paying Over the Odds to Buy
Out the 272-year-old Baltic Exchange?

Sam Chambers, the leading light over at Splash 24/7, the new wave news
bulletin, writes:-

The $103.5m offer made last week has been labelled “rather expensive”
by one Singaporean analyst.

“The purchase consideration works out to about three times the
Baltic Exchange’s book value of £29.95m,” said DBS analyst
Ling Lee Keng.

“On a PE basis, it seems rather expensive as it works out to over
50x FY2015 earnings, as compared to SGX’s 23x FY16 and 21x FY17

Ling pointed out that the Intercontinental Exchange (ICE), by way of
comparison, trades at 20x FY16 consensus earnings with a FY2015 bookvalue
of 2.2x.

Ling also hit out at what the Baltic will actually bring to SGX’s
bottom line. The London institution managed a net profit last year of
£1.34m on revenues of £6m, paltry in comparison to SGX’s
S$349m ($260m) net profit.

SGX’s offer will be put forward to the Baltic’s 380 shareholders
next month.

The DBS report follows on from a survey carried on this site two months
ago, with more than 500 respondents, which indicated that the Baltic
Exchange was not as relevant today as it was 20 years ago.


3. Land Reclamation or Filling the Sea?

The outer reaches of our science reading took us to a piece by Ilima
Loomis entitled China’s Relentless Campaign to Pave the Coast which
appears in Hakai, a magazine devoted to all things coastal:-

From Holland’s famous dikes to the construction of New Orleans
on a former swamp, humans have a long history of “reclaiming”
flooded coastal lands for their own purposes. But in recent years, as
the value of wetlands has been better understood, the trend has been
moving in the opposite direction, with increasing protection for coastal
zones and efforts to restore wetlands to their natural state. But this
is not so in China, where rapid growth of both the economy and the population,
especially along the coasts, has led to coastal reclamation projects
on a massive scale.

[Linguists may know that the term for land reclamation in Chinese is
"filling the sea"]

Read the piece in full here:-

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3326 4514

4. Japan P&I

The Club has sent us a copy of their Annual report which was published
a few days ago. Here it is:-


5. Swarms of Drones with Self-Driving Trucks

Our penchant for speculative pieces was moved (again) by the fellows
over at Flexport. This piece by Ryan Petersen has a look at the new
technological solutions on offer to help solve the problem of the last
mile logistics operator. He sees the truck of the future as a kind of
local delivery drone carrier. I don’t know, it looks like the large
truck related work force in the US is facing some pretty severe change.

See the piece here:-


6. People and Places

Nick Phillips has joined the firm of Tatham Macinnes as a solicitor
consultant. Nick joins from Hill Dickinson and has spent over thirty
years as a solicitor and partner in the maritime sector.


Self-driving trucking start-up Otto is poised to put its software in
the hands of long-haul truckers by the end of this year for testing,
its co-founders said on Thursday. Otto, co-founded by Google car and
map project veterans Anthony Levandowski and Lior Ron, will also begin
testing five retrofitted Volvo trucks at Northern California’s
autonomous vehicle testing grounds, GoMentum Station, in coming weeks.

The Otto trucks are equipped with a series of sensors and mapping technology
to allow them to gauge their position on highways and make real-time
driving decisions.

It’s unknown just how Otto’s partners will test the trucks,
but Otto’s vision allows the driver to leave the wheel, similar
to a plane’s “autopilot” system.


From the Avo Archive

The website of this newsletter contains all the editorial material
since the inception of the Maritime Advocate as a print based quarterly
in 1997 under the founding aegis of John Guy, Chris Hewer and Manfred
Arnold. Readers can go to the site and search the database on the home
page in its entirety. If you are looking for an old case, an old controversy
or you would just like to see how many times you and your firm have
featured in our annals feel free to access the archive. It is like this
e-zine, free to Readers and we always appreciate the support of advertisers
and sponsors.

Searching for references to trucking in the archive these were many
and sometimes even learned. Then we ran into a list by Chris Hewer which
well demonstrates the interconnectedness of life and such. It appeared
in Issue 52 of 22nd April 02.

Happy anniversary

ONE year ago, when we sent the first issue of this newsletter to 1,012
people, we had no idea how it would catch on. Today we celebrate the
first birthday of the maritime advocate online, and, thanks to the sponsorship
of Ignacio de Ros, almost 13,000 subscribers with an interest in maritime
law – and a few who just like the humour – share in our electronic community.
Thank you for your support, and the lively feedback we get each week.


Dustiest Definitions of Ethics Received this Week

"I thought ‘ethics’ was something discussed by Jimmy Edwards and
June Whitfield in The Glums." (Obviously for older readers)

"When I was involved with Greek hull and machinery business in
the 80s, one of our owners with a growing number of losses said he knew
all about ethics – it was an area east of London".

Nicest Compliment of the Week

"Thanks for another great issue – please keep going!! Loved your

Nicest Oblique Compliment of the Week

"Please change my address to – for, as we
say here, one man’s trash is another’s treasure.

Best Typo of the Week

"Please change your files to be sure that your mail reaches the
rigt recipient. Thank you!"

Most Oblique Unsubscribe of the Week

"Please don’t send us your newsletters any more because we are
not interested in your information. We are only the trucking department
of Cellpap and have nothing to do with that."

Quote of the week

"Everywhere I go, I’m asked if the universities stifle writers.
My opinion is that they don’t stifle enough of them." (Flannery


Ghost of a Story

John Bradford, a Dublin University student, was on the side of the
road hitchhiking on a very dark night and in the midst of a big storm.

The night was rolling on and no car went by. The storm was so strong
he could hardly see a few feet ahead of him.?Suddenly, he saw a car
slowly coming towards him and stopped. John, desperate for shelter and
without thinking about it, got into the car and closed the door….
Only to realize there was nobody behind the wheel and the engine wasn’t
on. The car started moving slowly. John looked at the road ahead and
saw a curve approaching.
Scared, he started to pray, begging for his life.

Then, just before the car hit the curve, a hand appeared out of nowhere
through the window, and turned the wheel. John, paralysed with terror,
watched as the hand came through the window, but never touched or harmed

Shortly thereafter, John saw the lights of a pub appear down the road,
so, gathering strength; he jumped out of the car and ran to it.. Wet
and out of breath, he rushed inside and started telling everybody about
the horrible experience he had just had.

A silence enveloped the pub when everybody realized he was crying…
and wasn’t drunk. ?
Suddenly, the door opened, and two other people walked in from the dark
and stormy night. They, like John, were also soaked and out of breath.

Looking around, and seeing John Bradford sobbing at the bar, one said
to the other…. "Look Paddy….there’s that idiot that got in
the car while we were pushing it!!!!"

[Source:- Frazer Hunt]


More Trucking

While we are about the subject, we thought Readers might be impressed
by the regular YouTube journal of Allie Knight, a zany but highly competent
driver of an eighteen wheeler as she crosses the USA. She films as she
goes and manages to capture the size, the wealth and the spread out
nature of her country, not to mention the attractions of the climate
and the topography. Here is a piece of her driving through Wyoming:-


Thanks for Reading the Maritime Advocate online

Maritime Advocate Online is a weekly digest of news and views on the
maritime industries, with particular reference to legal issues and dispute
resolution. It is published to over 19 000 individual subscribers each
week and republished within firms and organisations all over the maritime
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to around 55 000 Readers in over 120 countries.