Marine Insurance & the Restraint of Rulers, Princes or Peoples
|What is an example of the term "Restraint of Rulers, Princes or Peoples" in a marine insurance policy?|
|A. A prohibition from loading a cargo from a country's government interference.|
|B. Arrest of a vessel by legal authorities to satisfy claims through exercise of a maritime lien|
|C. Damage caused by riot of the population of a port|
|D. Losses caused by fines from polluting the harbor after malfunction of a piping system|
The term in question is found in the Marine Insurance Act of 1906:
“Touching the Adventures and Perils which we the Assurers are contented to bear and do take upon us in this Voyage, they are of the Seas, Men-of-War, Fire, Enemies, Pirates, Rovers, Thieves, Jettisons, Letters of Mart and Countermart, Surprisals, Takings at Sea, Arrests, Restraints and Detainments of all Kings, Princes and People, of what Nation, condition or Quality soever, Barratry of the Master and Mariners, and of all other Perils, Losses and Misfortunes that have or shall come to the Hurt, Detriment or Damage of the said Goods and Merchandises and Ship, &c., or any Part thereof . . . .”
The “Restraint of Rules, Principles or Peoples” clause relieves a carrier of responsibility for cargo loss resulting from actions taken by a constituted government or ruling power of a country. Hopkins’ Business and Law for the Shipmaster cites the example of a case in which a Government has prohibited the importation of cattle coming from a country where a contagious cattle disease was prevalent. “Restraint of Princes . . . ” would relieve the carrier of responsibility for not delivering the cargo in this case. This example is similar to Answer (A), the correct answer to the question.
In the question above, the “maritime lien” of Choice (B) and the “losses caused by fines” of Choice (D) remove both from contention because the “Restraint” clause implies that the prohibition is levied directly by the Government and that it is involuntary. Liens and fines are the consequences of actions within the control of the carrier. Choice (C) does not qualify as “Restraint” because rioters and riots are not governments.
Another example of “Restraint . . . ” is the case of a vessel in the process of discharging cargo in Morocco. The decomposed bodies of two stowaways were found on top of a cargo of bran. Authorities ordered that the discharge stop and furthermore that the cargo be reloaded, the holds sealed, and the ship depart. The cargo was subsequently discharged in Gibraltar, the contaminated portion sold, and the balance resold at a major loss by the purchaser who held the bill of lading. When the purchaser sued the carrier for his loss, the Court decided that “Restraint of Princes” was a valid defense for the carrier. Unfortunately for the carrier, it was also successfully argued that the presence of the stowaways indicated negligence on the carrier’s part, which deprived it of its defense.