WAR AND STRIKES RISKS
It was not until 1898 that, after a general meeting of Lloyd’s, it was decided that marine risks and war risks should be underwritten under separate policies. The result is that, now, war risks are excluded from standard marine policies and are provided for under separate cover. Thus, a vessel may now be insured specifically against war and strikes risks under the Institute War and Strikes Clauses Hulls (IWSC(H)(95)), Time and Voyage.1 Freight may, similarly, be insured against war and strikes risks under one policy,2 but, with cargo, insurance cover against war risks is separate from cover against strikes risks.3
That war and strikes risks may be insured under a policy of marine insurance is confirmed by s 3 of the Act, which states:
‘Maritime perils’ means the perils consequent on, or incidental to, the navigation of the sea, that is to say, perils of the seas, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints, and detainments of princes and peoples, jettisons, barratry, and any other perils, either of the like kind or which may be designated by the policy.
In the past, in order to exclude war risks, a standard policy would include an f c and s (free from capture and seizure) clause. During the First and Second World Wars, the principle behind war risks insurance was that the assured could only recover for a loss under the war risks policy if that loss could have been recovered under the marine policy, but was then excluded by the f c and s clause.4
However, f c and s clauses had, for a long time, been considered unsatisfactory, and the low regard in which they were held was eloquently summed up by Mocatta J, in Panamanian Oriental Steamship Corporation v Wright  2 Lloyd’s Rep 365. In this instance, a vessel was confiscated at Saigon for carrying unmanifested goods. The policy of insurance was in standard form, with the f c and s clause deleted, but incorporated the Institute War and Strikes Clauses (Hulls—Time).
Mocatta J: [p 372] …It is probably too late to make an effective plea that the traditional methods of insuring against ordinary marine risks and what are usually called war risks should be radically overhauled. The present method, certainly as regards war risks insurance, is tortuous and complex in the extreme. It cannot be beyond the wit of underwriters, and those who advise them, in this age of law reform, to devise more straightforward and easily comprehended terms of cover.
Fortunately, after further criticism in 1978 by UNCTAD, that the method used to distinguish war risks from marine risks was, at the very least, unsatisfactory, the London market radically reformed the structure of their policies. New and separate Institute Clauses were introduced for both marine risks and war risks; the cargo clauses taking effect in January 1982, hull and freight clauses following in October 1983.5 Significantly, the system was harmonised, whereby the war risks policy covered the same risks as those which have been excluded from cover by the marine risks policy.
The f c and s clause
The f c and s clause was a clause inserted into a marine risks policy which excluded marine risks insurers from war and strikes risks. The war and strikes risks covered by the war risks insurer were similar, but not necessarily identical, to those excluded by the f c and s clause from the policy for marine risks.
Problematically, the mere fact that certain risks, namely, the non-marine risks, were excluded by the f c and s clause from the cover for marine risks did not mean that they were automatically insured under the war risks policy. That is to say, the risks excluded by the marine risks policy were not necessarily covered by the war risks policy.
The current regime of insurance cover provided by marine and war risks policies is much simpler: the war and strikes risks excluded by the War and Strikes Exclusion Clauses of the ITCH(95) and the IVCH(95) are now mirrored verbatim by the risks covered by the IWSC(H)(95).
The Paramount and the Exclusion Clauses
Both the ITCH(95) and the IVCH(95) incorporate exclusion clauses which except the insurer from liability under the marine risks policy from specific enumerated perils. The four exclusion clauses, namely: War Exclusion; Strikes Exclusion; Malicious Acts Exclusion; and the Radioactive Contamination Exclusion Clauses are governed by the paramount clause.6 The paramount clause declares that the exclusion clauses ‘…shall override anything contained in this insurance inconsistent therewith’. Thus, the paramount clause serves to override any endorsements contained within or attached to the policy, including any express warranty which may be inconsistent with the exclusion clauses.7
Thus, where war and strikes risks are excluded from a marine risks policy, as with the ITCH(95) and the IVCH(95), it is not possible to seek cover for such risks without taking out a separate policy for those risks. There is, however, no paramount clause in the ICC (A), (B) and (C), which means that its War Exclusion Clause, cl 6, has no paramount status.
The paramount clause of the ITCH(95) and the IVCH(95) not only excludes the marine risks insurer from liability for loss or damage arising from the excluded perils, but also excludes him from liability for any ‘expense’ caused by those perils. No such equivalent cover for ‘expense’ is provided under the War and Strikes Clauses, Hull, Cargo or Freight. Thus, the war and strikes risks cover is, in this respect, narrower than the marine risks exclusions.
Dual causes of loss—marine risk and war risk
In time of war, the courts have not always found it easy to differentiate between a loss caused by marine risks and a loss caused by war risks. This causes problems when the vessel is insured under both marine risks and war risks policies of insurance: in the event of a collision or a stranding, it is often difficult to determine whether the collision or stranding was caused by a navigational error, which would be covered by the marine risks policy, or it was brought about by the hazardous nature of a warlike operation, which would be covered by the war risks policy.
The rule of proximate cause
The courts have sought to resolve the issue by employing the principle set out in s 55 of the Act, the rule of proximate cause.8 In Yorkshire Dale Steamship Co Ltd v Minister of War Transport, ‘Coxwold’ (1942) 73 LlL Rep 1, HL,9 where a vessel stranded whilst sailing in convoy, the House of Lords decided that the proximate cause of the loss was the warlike operation and, therefore, the Minister of War Transport, who requisitioned the ship, was liable, not the marine risks insurers. Lord MacMillan summed up the problems raised.
Lord MacMillan: [p 7] …This division of liability has given rise to many perplexing cases in which the minister on the one hand and the shipowner or his insurers on the other hand have been at issue as to whether a particular casualty was due to warlike operations or to the ordinary perils of navigation, each naturally seeking to place the casualty in the category for which the other is under liability. The minister accepts the position that he must be treated as if he had granted a marine insurance policy covering the risks which he has undertaken. Consequently, under s 55 of the Marine Insurance Act 1906, he is liable for any loss proximately caused by warlike operations. The adverb ‘proximately’ does not greatly assist the solution of the problem, but it at least serves to emphasise that it is the predominant and determining cause that is to be sought.
More recently, a case came before the South African Court of Appeal which provided a graphic example of the law of proximate cause. In Incorporated General Insurances Ltd v AR Shooter T/A Shooter’s Fisheries, ‘Morning Star’  1 Lloyd’s Rep 401, SA CA, the fishing vessel Morning Star was arrested and detained by the People’s Republic of Mozambique for illegal fishing. As the owner was unable to pay the resulting fine, Morning Star was confiscated.
The owner of Morning Star duly claimed upon his policy of insurance, which incorporated war risks, on the basis that the loss had been caused by the ‘arrest, restraints and detainments of all kings…’, a peril insured against. But the court ruled that the insurers were not liable under the policy, because the proximate cause of the loss was not the arrest or detainment, but the failure by the assured to pay the fine.
Galgut AJA: [p 406] …I am, with respect, unable to agree with the finding of the court a quo that the loss of the trawler was due to a continuous process. The Mozambican tribunal imposed a fine. Had that fine been paid, the loss would not have resulted. In my view, the confiscation did not result from the arrest of the trawler, it resulted from the failure to pay the fine. That failure was, therefore, the proximate cause of the confiscation of the trawler. The fact that the plaintiff was unable to pay the fine is irrelevant. The issue is not his ability to pay the fine. The issue is what caused the confiscation. That, as we have seen, was the fact that the fine was not paid. That was not a peril covered by the risk clause. In the result, the appeal [by the insurers] must succeed.
Why, therefore, if it is simply the rule of proximate cause which determines whether the marine risks insurer or the war risks insurer is liable for the loss, is it necessary to ensure that the war and strikes exclusion clauses contained within the marine risks policy are made paramount? The answer lies with the Warilda case, below, where a collision took place in wartime and it was shown that a standard f c and s clause, excluding liability for war risks, did not exclude third party liability for collision damage. Thus, although the proximate cause of the loss was the warlike operation, the f c and s clause was limited in its scope and did not except all liability under the marine policy.
In AG v Adelaide Steamship Co Ltd, ‘Warilda’  AC 292, HL, a hospital ship, The Warilda, was requisitioned by the Admiralty under the standard form of charter (T 99). The vessel was insured against marine risks and the Admiralty, under the terms of the charter, were liable for any losses proximately caused by war risks. Whilst steaming across the English Channel with wounded soldiers, at full speed with her navigation lights switched off, Warilda was involved in a collision with another ship for which Warilda was deemed solely to blame. The House of Lords ruled that the Admiralty were liable for the loss because, at the time of the collision, Warilda was engaged in a warlike operation, and the f c and s clause in the marine risks policy excluded war risks.
However, subsequently, in another action before the House of Lords, regarding the damage caused to the other vessel, the court ruled that the liability for the collision damage remained with the marine risks insurer. This was because the f c and s clause did exclude collision liability.
As O’May points out, the ruling in this case heralded the arrival of the paramount clause:10
…It followed from this finding that such damages were not excluded by the f c and s clause and had to be paid by the marine underwriters under the Running Down Clause, which was not, at that time, made subject to the f c and s clause. It was surprising that a revision of the clauses was made thereafter to ensure that all terms of the marine cover, including the Running Down Clause, were caught by the f c and s exclusion. To avoid a repetition of Warilda situation, the Institute Clauses for hull and cargo are expressly made subject to the War Exclusion. By stating that the War Exclusion in the Hull Clauses is paramount and overrides anything inconsistent contained ‘in this insurance’, not just in the Institute Clauses, it means that any typewritten or other attached clauses or endorsements to the policy and clauses will likewise be overridden, in the absence of a clearly expressed contrary intention.
The specific war risks covered by the Institute War and Strikes Clauses (Hulls) (IWSC(H)(95)) are enumerated in cll 1.1, 1.2 and 1.3; these risks mirror the war risks excluded by cl 24 of the ITCH(95).11 Identical war risks are also covered by cll 1.1, 1.2 and 1.3 of the Institute War Clauses (Cargo) (IWC(C)(82))12 and, yet again, those war risks mirror the war risk exclusions contained within cl 6 of the ICC (A), (B) and (C).
The war risks covered are annotated thus:
1.1 war civil war revolution rebellion insurrection, or civil strife arising therefrom, or any hostile act by or against a belligerent power;
1.2 capture seizure arrest restraint or detainment, and the consequences thereof or any attempt thereat;
1.3 derelict mines torpedoes bombs or other derelict weapons of war.
Clause 1.1: War civil war revolution rebellion insurrection, or civil strife arising therefrom, or any hostile act by or against a belligerent power
The war risks covered by cl 1.1 of both the IWSC(H)(95) and the IWC(C)(82) are graded in a descending order of gravity, which may be subdivided thus:
(2) civil war, revolution, rebellion, insurrection;
(3) civil strife arising therefrom; and
(4) any hostile act by or against a belligerent power.
Webster’s Comprehensive Dictionary of the English Language defines war as: ‘A contest between or among nations or States…carried on by force and with arms.’ Thus, in general terms, it involves hostilities between belligerent States, but it is not necessary for a formal declaration of war to have been made. Conversely, a formal declaration of war is not conclusive evidence that a state of war exists; whether a state of war actually exists at a particular time is a question of fact.
That there is no technical definition of the word ‘war’ was confirmed by Sir Wilfred Greene MR, in Kawasaki Kisen Kabushiki Kaisha of Kobe v Bantham Steamship Co Ltd  2 KB 544, CA. In this instance, a clause in a charterparty gave the charterers the liberty to cancel the charterparty ‘…if war breaks out involving Japan’. The Court of Appeal was, wisely, unwilling even to attempt to define ‘war’, but it was prepared to confirm that a state of war could exist without there being a declaration of war.
Sir Wilfred Greene MR: [p 556] …I asked for any authority in which, for the purpose of the municipal law of this country, ‘war’ is in any way defined. No such authority could be suggested…to say that English law recognises some technical and ascertainable description of what is meant by ‘war’ appears to me to be a quite impossible proposition…Nobody would have the temerity to suggest in these days that war cannot exist without a declaration of war…I do not propose to be the first to lay down a definition of ‘war’ in a so called technical sense.13
Civil war revolution rebellion insurrection
The above events relate to strife or internal conflict which takes place within one nation or State. At one end of the scale, civil war implies open armed conflict between organised factions, whilst, at the other end of the scale, insurrection may amount to nothing more than an ‘organised resistance to established government’.14
The leading authority regarding definitions of the words contained within the war and strikes clauses is the non-marine case of Spinney’s v Royal Insurance Co, below.
Spinney’s (1948) Ltd v Royal Insurance Co  1 Lloyd’s Rep 406
The plaintiffs were merchants and retailers in Beirut who insured their properties with the defendants under policies of insurance containing a special condition which stated: This insurance does not cover any loss or damage occasioned by or through or in consequence directly or indirectly of any of the following occurrences: (a) …civil war; (b) …civil commotion assuming the proportions of or amounting to a popular rising…insurrection, rebellion, revolution military or usurped power…’ In January 1976, shops and warehouses belonging to the plaintiffs were looted and damaged by a group or groups of persons, and the plaintiffs claimed on their policies of insurance for their losses. The underwriters refused payment.
The court ruled that the insurers were excluded from liability under the policies, because the losses fell within the meaning of the special condition clause. Although, the judge reasoned, the situation in Beirut did not amount to a civil war, the disturbances were ‘assuming the proportions of a popular rising’. In reaching his decision, Mustill J (as he then was) was obliged to analyse the meaning of all the exceptions contained within the special condition clause.
[p 429] …What are these characteristics of an armed conflict which make it a war, albeit of an internal character? I do not propose to attempt any general definition of a civil war. It does, however, seem to me that a decision on whether such a war exists will generally involve a consideration of three questions:
(1) Can it be said that the conflict was between opposing sides?
(2) What were the objectives of the ‘sides’ and how did they set about pursuing them?
(3) What was the scale of the conflict, and of its effect on public order and on the life of the inhabitants?
As regards the first element, I find it difficult to visualise a war of any kind which is not fought between sides…it must, to my mind, be possible to say of each fighting man that he owes allegiance to one side or another, and it must also be possible to identify each side by reference to a community of objective, leadership and administration. It does not necessarily follow that the objectives of all those on any one side must be identical. There may be considerable differences and even animosities between allies. But there must be some substantial community of aim, which the allies have banded together to promote by the use of force. Nor, in my view, need there always be only two sides. Two factions might fight one another, and also the State, in order to seize power. This would still be a civil war. But if the factions are too numerous, the struggle is no more than a melee, without the clear delineation of combatants which is one of the distinguishing features of a war.
The second matter for consideration is the nature of the objectives for which the sides are fighting. The classical opinion of the international lawyers is that the parties must be either the existing authorities and a faction striving to seize complete dominion over the whole or part of the State; or two factions striving against each other to seize power, with the existing rulers either fighting both factions at once, or standing impotently by…But, where the term is used in ordinary speech, I am not convinced that a desire to seize or retain the reins of State is the only motive which can ever put the contestants into a state of civil war. If all the above requirements are satisfied, I believe that there would be a civil war if the objective was not to seize complete political power, but (say) to force changes in the way in which power is exercised, without fundamentally changing the existing political structure.
Finally, there is the character and scale of the conflict, and its effect on public order and on the life of the inhabitants…I would include: the number of combatants; the number of casualties, military and civilian; the amount and nature of the armaments employed; the relative sizes of the territory occupied by the opposing sides; the extent to which it is possible to delineate the territories so occupied; the degree to which the populace as a whole is involved in the conflict…
[p 436] …As regards ‘rebellion’, I adopt the definition in the Oxford English Dictionary (Murray): …‘organised resistance to the ruler or government of one’s country; insurrection, revolt’ [emphasis added]. To this I would add that the purpose of the resistance must be to supplant the existing rulers, or at least to deprive them of authority over part of their territory.
The dictionary defines ‘insurrections’ in a similar manner, but also suggests the notion of an incipient or limited rebellion. I believe that this reflects the distinction between two exceptions as they are used in the present clause, subject to the rider that a lesser degree of organisation may also mark off an insurrection from a rebellion. But, with each exception, there must be action against the government with a view to supplanting it.
The definitions suggested by Mustill J in the Spinney’s case were later referred to by Saville J, in National Oil Co of Zimbabwe (Private) Ltd v Sturge  2 Lloyd’s Rep 281, where it was held that losses sustained by an oil company could not be recovered under a marine risks policy of insurance (incorporating only the Institute Strikes Clauses) when installations were blown up by the Mozambique National Resistance, because the policy excepted losses caused by, amongst other things, ‘insurrection’. The judge, however, suggested that the words ‘civil war’, ‘rebellion’, and ‘insurrection’ should be given their ‘business’ meaning rather than, presumably, their technical meaning.
Saville J: [p 282] …In the context of a commercial contract such as the policy under discussion, the expressions ‘civil war’, ‘rebellion’ and ‘insurrection’ bear their ordinary ‘business’ meaning. In this context, ‘civil war’ means a war with the special characteristics of being civil—that is, being internal rather than external—see Spinney’s (1948) Ltd v Royal Insurance Co Ltd  1 Lloyd’s Rep 406, p 429. ‘Rebellion’ and ‘insurrection’ have somewhat similar meanings to each other. To my mind, each means an organised and violent internal uprising in a country with, as a main purpose, the object of trying to overthrow or supplant the government of that country, though ‘insurrection’ denotes a lesser degree of organisation and size than rebellion—see Home Insurance v Davila (1954) 212 F 2d 731.
Unfortunately, there appears to be little in the way of authority regarding a definition of the word ‘revolution’. Although, it is submitted, ‘revolution’ has a similar meaning to ‘rebellion’, the word ‘revolution’ suggests a more widespread uprising than ‘rebellion’, which may be localised.15
It is emphasised that the insurable risk of ‘civil strife’, excluded by a marine policy and covered under war risks, is only that civil strife which has arisen from ‘war, civil war, revolution, rebellion or insurrection’. O’May suggests that: [p 262] ‘It may be that these additional words “civil strife arising therefrom” add little to the enumerated perils…but…the phrase may be significant enough, in practice, to embrace an event which arises from the war, civil war, revolution, rebellion or insurrection, though it is geographically separated from the main action.’
Any hostile act by or against a belligerent power
This provision insures one of the risks, namely, ‘hostilities’, contained within the f c and s clause, which warranted that the marine risks insurer was: ‘…free …from the consequences of hostilities and warlike operations.’ Clause 24.1 of the ITCH(95) excludes a marine risks insurer thus: 16 ‘In no case shall this insurance cover loss damage liability or expense caused by…any hostile act by or against a belligerent power.’ Correspondingly, cl 1.1 of the IWSC(H)(95) and of the IWC(C)(82) provide the necessary war risk cover excluded by the marine policy. Though the f c and s clause is no longer in use in the present regime of exclusion of war risks from the marine cover, nevertheless, a brief historical account of its ambit and degree of influence is useful for a proper understanding of this aspect of the law.
The f c and s clause—consequences of hostilities and warlike operations
Prior to the introduction of the paramount war risks exclusion clause, a marine risks insurer employed the f c and s clause to exclude war risks from the cover for marine risks. By far the most important exclusion contained within the f c and s clause was the provision that the marine risks insurer was: ‘Warranted free of…the consequences of hostilities and warlike operations.’ Invariably, the courts, often the House of Lords, had to decide what did, or did not, amount to ‘hostilities’ and ‘warlike operations’.
Loss or damage suffered as a consequence of ‘hostilities’—previously excluded by the f c and s clause (and now by cl 24.1, the War Exclusion of the ITCH(95)) from the marine cover)—is now covered by cl 1.1 of the IWSC(H)(95). Thus, case law which previously provided an interpretation of the meaning of ‘hostilities’ under the f c and s clause is still relevant under the present cover for loss caused by any ‘hostile’ act. The same, however, cannot be said of the cases which have defined ‘warlike operations’, as such a cause of loss or damage is not an insured risk under the IWSC(H)(95): consequently, the old cases,17 which have awarded a meaning to the expression ‘warlike operations’ in the context of the f c and s clause, are, therefore, not directly relevant to the present scheme of things.
That the insured risk of an act of ‘hostility’ is not as wide a term as ‘warlike operations’ was noted by Mustill J (as he then was) in Spinney’s (1948) Ltd v Royal Insurance Co Ltd  1 Lloyd’s Rep 406, cited above, who remarked: [p 437] ‘…Warlike operations has a wider meaning [than hostilities], and includes such operations as belligerents have recourse to in war, even though no state of war exists’ (Arnould on Marine Insurance, 15th edn, para 904).
As a result of the experience gained in two major conflicts, the insurance industry expressed concern that, in time of war, many of the liabilities usually associated with marine risks had effectively been transferred to war risks insurers by the phrase ‘consequences of hostilities and warlike operations’ contained within the f c and s clause. It was felt that the scope of the exclusion of ‘warlike operations’ was too wide, with the effect that the marine risks insurer appeared to bear little liability. A loss incurred by a stranding, for example, caused by negligence, could fall upon the war risks insurer if the vessel was carrying war materiel.
After the ruling in the Coxwold case,18 where a small vessel ran aground whilst in convoy, and the loss was held to be as a direct result of a warlike operation and not a marine risk, the f c and s clause was restructured in order to redress the balance. However, it was only a question of time before the whole concept of the war exclusion under the f c and s clause was re-addressed. The result was the demise of the f c and s clause in the early 1980s, and the introduction of the paramount war risks exclusion clause (contained within the ITCH(95)), which it has now replaced.
Although there is little in the way of modern authority clarifying the meaning of ‘hostile act’, some guidance is provided by past cases, where the word ‘hostilities’ was employed under the f c and s clause.
There is, for example, little doubt that the words ‘hostile act’ may be considered in the same light as ‘hostilities’; the word, employed in the old f c and s clause, has been much commented on. In Britain Steamship Co Ltd v King, ‘Petersham’ and ‘Matiana’  1 AC 99, HL, where two vessels were lost during the First World War, but not on account of ‘warlike operations’, the House of Lords was of the opinion that the word ‘hostilities’ could be read as ‘acts of hostility’ and, as such, did not require the existence of a state of war to be applicable.
Lord Wrenbury: [p 133] …All the decisions have, I think, proceeded, and in my judgment have rightly proceeded, upon the footing that the word ‘hostilities’ does not mean ‘the existence of a state of war’, but means ‘acts of hostility’ or (to use the noun substantive which follows) ‘operations of hostility’.
But, the question arises, what sort of organisation may be ascribed as being a belligerent power and who, in perpetrating hostile acts, may be considered to be acting on behalf of that belligerent power? This question was answered, in part, in Atlantic Mutual Insurance Co v King, below. In this instance, the court was of the opinion that ‘hostile acts’ meant hostile acts ‘by persons acting as the agents of Sovereign Powers or of such organised and considerable forces as are entitled to the dignified name of rebels…’. Whilst the word ‘belligerent’ was not actually used, it is presumed that, for there to be a hostile act, both the sovereign power and the rebels would necessarily have had to be belligerent towards one another.
Atlantic Mutual Insurance Co v King  1 KB 307
Goods placed aboard the vessel Tennyson, bound from Bahia to New York, were reinsured by the plaintiffs with the defendants under a marine risks policy of insurance. The policy contained an f c and s clause which stated: ‘Warranted free from all consequences of hostilities or warlike operations whether before or after the declaration of war.’ Five days out of Bahia, an explosion occurred in the hold of Tennyson and the goods, the subject matter of the reinsurance, were burned. It transpired that the explosion had been caused by a bomb placed aboard the vessel by a man named Niewerth, a German subject resident in Bahia, aided by an accomplice. The question before the court was whether a hostile act by a German civilian could be construed as a hostile act by a sovereign power.
The court ruled that the reinsurers were not liable under the marine risks policy. The Act by a civilian, in following the policy of his government, amounted to a hostile act within the meaning of the f c and s clause.
Bailhache J: [p 310] …the plaintiffs say rightly, as I think, that the word ‘hostilities’, as used in the clause, means hostile acts by persons acting as the agents of Sovereign Powers, or of such organised and considerable forces as are entitled to the dignified name of rebels as contrasted with mobs or rioters, and does not cover the act of a mere private individual acting entirely on his own initiative, however hostile his action may be.
[p 313] …I do not, however, think that the word ‘agent’ in this connection is limited to the strictness in which the words ‘agent’ and ‘principal’ are used in business transactions. I am disposed to think that a man is acting, in such a case as this, as the agent of his government when knowing that the settled and concerted policy of that government is to avail itself of the efforts of all its subjects, whether naval, military, or civilian, to destroy enemy life and property as occasion offers, he uses such opportunity as presents itself in furtherance of that policy.
Clause 1.2: Capture seizure arrest restraint or detainment, and the consequence thereof or any attempt thereat
The IWSC(H)(95), in cl 1.2, states that:
…this insurance covers loss of or damage to the Vessel caused by…capture seizure arrest restraint or detainment, and the consequences thereof or any attempt thereat.
The same risks are covered by the IWC(C)(82), except that the provision is qualified in that ‘capture seizure arrest restraint or detainment, and the consequences thereof or any attempt thereat’ is only covered when the loss or damage arises from ‘risks covered under 1.1 above’.
Capture and seizure
The words ‘capture’ and ‘seizure’ are imported into cl 1.2 from the now defunct f c and s clause.19 That ‘capture’ is confined to capture by an enemy or belligerent, whereas ‘seizure’ has a much wider meaning, in that it could include any act of forcible possession, by lawful authority or otherwise, was confirmed by Lord Fitzgerald in Cory v Burr (1883) 8 App Cas 393, HL. In this instance, a vessel was seized by the Spanish authorities because of the barratrous acts of the master in smuggling tobacco. As the policy of insurance contained an f c and s clause, the House of Lords was obliged to analyse the meaning of both ‘capture’ and ‘seizure’.
Lord Fitzgerald: [p 405] …In the construction of this warranty, it is observable that ‘capture’ and ‘seizure’ do not mean the same thing. ‘Capture’ would seem properly to include every act of seizing or taking by an enemy or belligerent. ‘Seizure’ seems to be a larger term than ‘capture’, and goes beyond it, and may reasonably be interpreted to embrace every act of taking forcible possession either by a lawful authority or by overpowering force.
The issues of ‘capture’ and ‘seizure’ were again raised in the Robinson Gold Mining case, below.
Robinson Gold Mining Co and Others v Alliance Insurance Co  2 KB 919
The plaintiffs insured a shipment of gold, destined for Britain or France from South Africa, with the defendants under a policy which insured against, amongst other risks: ‘…arrests, restraints, and detainments of all kings, princes, and people.’ However, the policy also contained an f c and s clause, warranting the insurance cover ‘free of capture, seizure, and detention, and the consequences thereof’. The gold was ‘requisitioned’ or, in the words used by the court, ‘constitutionally seized’ by South African commandos, acting on behalf of the government who, rightly as it turned out, feared the outbreak of the Boer war in 1899. The plaintiffs claimed on their policy of insurance for the loss of the gold, but the underwriters declined to pay, on the basis that the warranty which excluded a loss caused by ‘seizure’ relieved them from liability.
The court ruled that the insurers were not liable under the policy. Even if the requisition amounted to the restraint of princes, an insured risk, the policy also contained an f c and s clause, and the ‘constitutional seizure’ of the gold by officers of the government amounted to ‘seizure’ within the meaning of the f c and s clause. Therefore, the insurers were excluded from liability.
Phillimore J: [p 923] …I have no doubt that the gold was, in each case, forcibly taken by officers of the South African Republic within the territory of the South African Republic…I have further no doubt that the gold was legally seized according to the laws in force in the South African Republic; I shall perhaps best explain my meaning by saying that it was constitutionally seized.
[p 925] …This brings us to two questions: Was the taking of this gold an arrest, restraint, or detainment of rulers? If so, was it also a capture, seizure, or detention, or a consequence of warlike operations?
I am in some doubt about the first point. Restraint of princes and rulers is often more exercised by a government against the citizens of another State. It generally arises in a war, or at least as an act of retorsion, such as embargo or blockade. It is not a restraint of princes when a ship or cargo is arrested by civil process at the suit of a subject.
…Was this taking a capture, seizure, or detention within the terms of the clause of exception? It has been suggested that these words point to hostile taking, and to hostile taking only. That is probably true of capture. But seizure is an additional word.
[p 926] …‘Seizure’ signifies ‘the taking of a ship by the act of governments or other public authority for a violation of the laws of trade, or some rule or regulation instituted as a matter of municipal police, or in consequence of an existing state of war’. This is the language of Bigelow CJ, in Greene v Pacific Mutual Insurance Co. In Cory v Burr the seizure was not, as it was at first contended before me, an act of mere force; it was a legal seizure…The cases I have cited further show that seizure is not confined to hostile acts. Nor is the word ‘detention’.
[p 927] …The argument may be put this way: there is no arrest or restraint of princes except by capture, seizure or detention; the most outlying case of restraint of princes, Rodocanachi v Elliott, being a case of detention. In other words, if the risk is one covered in the body of the policy, it is necessarily excluded by the clause of exception—a clause which probably excludes this risk and some others.
Similarly, in Forestal Land, Timber and Railways Co Ltd v Richards, ‘Minden’  4 All ER 96, where cargo was lost when the German vessel carrying it was scuttled in order to avoid capture, at first instance, Hilbery J stated: [p 109] ‘…Capture is a taking by the enemy as prize in time of open war with intent to deprive the owners of their property in the goods. It is a belligerent act.’
Are barratrous and piratical seizures covered by marine or war risks?
Essential to both ‘capture’ and ‘seizure’ is the act of taking forcible possession. But ‘seizure’ is a broad concept, and such an act need not necessarily be confined to external forcible possession. Thus, in Kleinwort v Shepard (1859) E&E 447, the taking over of a ship by emigrants, effectively an act of piracy, was adjudged to be ‘seizure’. But, in the American case of Republic of China, China Merchants Steam Navigation Co Ltd and United States of America v National Union Fire Insurance Company Of Pittsburgh, Pennsylvania, ‘Hai Hsuan’  1 Lloyd’s Rep 351, where Communist Chinese crews took control of Nationalist Chinese vessels, the court was in no doubt that such action by a crew could not amount to seizure as it applied to an f c and s clause. It amounted to barratry. The court, in reaching its decision, distinguished the Kleinwort case.
Circuit Judge Soper: [p 359] …No case has come to our attention in which the barratrous conduct of either the master or the crew of a vessel has been held to be within the capture and seizure exclusion clause of a marine insurance policy. In Kleinwort v Shepard (1859) 1 E&E 447, coolie passengers took control of a ship and made off with her. The court, in holding that the resulting loss came within the exclusion of ‘capture and seizure’, inquired, argumentatively, whether it would not also be a seizure if a crew, intending to turn pirates, should murder the master and run away with the ship. But this was mere dictum…The single point decided was that the passengers on board the ship, owing no duty of loyalty to the owner and being incapable of committing barratry, had effected a ‘seizure’ of the vessel within the excluding clause.
It is emphasised that barratry and piracy are specifically excepted from the paramount War Exclusion Clause of the ITCH(95) and the IVCH(95). To that effect, cl 24.2 of the ITCH(95) states:
In no case shall this insurance cover loss damage liability or expense caused by…
24.2 capture seizure arrest restraint or detainment (barratry and piracy excepted) and the consequences thereof or any attempt thereat.