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Subrogation and Maritime Claims

Rob Merkin KC (hon) & Aybüke Naz Durmuş

(2023) 35 SAcLJ 246

This article discusses the scope of subrogation as it operates for maritime claims. There is hardly a claim that does not involve insurers as both hidden claimants (by way of subrogation) and hidden defendants (under liability covers). Typical claims include those by cargo owners or their banks against shipowners and charterers, collision actions and general average claims by shipowners against cargo owners or charterers. Shipowners are insured under hull and machinery policies for first party losses and, by protection and indemnity clubs, against liability for collision and cargo claims. Cargo owners are insured against loss of or damage to cargo and for general average contributions, lending banks are insured against mis-delivery and buyers are insured against trade debt defaults. However, the codified regime governing these relationships – s 79 of the Marine Insurance Act 1906 – is an incomplete and, in some circumstances, inaccurate statement of the law as it had developed up to 1906. This article examines some of the deficiencies in the regime as well as novel issues that have arisen since the law was codified.