When the container arrived at Rotterdam the ambient temperature was, of course, much lower than that within the container. Expert evidence, however, established that what occurred was that the leather, being hydroscopic, absorbed moisture from the humid atmosphere in Calcutta as did the cardboard cartons. An important factual issue decided upon by maintained that it emanated directly from the air present in the container when stuffed. Justice Phillips of the English Queen’s Bench Division (Commercial Court). The defendant named in this case, Paul Charles Harding, was a representative of Lloyds underwriter. Underwriters contended that the damage was not proximately caused by an insured peril and fell within the policy exclusion of inherent vice. The leather gloves were insured with the Lloyds underwriters under anl all risks policy. On out-turn the gloves were found to be wet, stained, moldy and discoloured. closed-top box containers for carriage to Rotterdam. The cartons were sealed and ultimately packed into 20 ft. The gloves were wrapped in bundles of 12” draft paper wrappers and then placed in cardboard cartons. The plaintiffs were Dutch importers of gloves supplied and manufactured in Calcutta. One such case involved a shipment of industrial leather gloves on board the M.V. However, perhaps the most perplexing cases involve moisture condensation resulting in wetting damage. While there is no predictable factual pattern many of the cases revolve around spontaneous combustion, disease, decay or fermentation and insufficiency of packing. There have been a myriad of cases involving cargo interests suing underwriters who have declined coverage on the grounds that the loss occurred due to inherent vice.
This means that damage or loss caused by the nature of the thing itself, as opposed to damage from an external occurrence, is not covered. When goods are insured on all risks basis the usual terms exclude loss, damage or expense proximately caused by inherent vie or nature of the subject matter insured. Perhaps one of the most confounding issues in marine insurance law involves the inherent vice exclusion. (Originally published in Seaports and the Shipping World – September 1990 Issue) Inherent Vice in Marine Insurance Law: The Case Of the “Bengal Enterprise” T.M.
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