JUDICIAL TRENDS IN REJUVENATING THE CONCEPT OF CAUSA PROXIMA IN

MARINE INSURANCE

By

Name of the Student: POOJA GUPTA

Roll No.: 2016070

Semester: VIII SEMESTER

Name of the Program: 5 year (B.A., LL.B. / LL.M.)

Name of the Faculty Member: Prof. Bhagyalakshmi

Date of Submission: 12.12.2020

DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

NYAYAPRASTHA, SABBAVARAM,
VISAKHAPATNAM – 531035, ANDHRA PRADESH
TABLE OF CONTENT

Contents
TABLE OF CASES.........................................................................................................................2

SYNOPSIS......................................................................................................................................3

CHAPTER 1:- INTRODUCTION..................................................................................................5

CHAPTER 2:- HISTORY OF PROXIMATE CAUSE...................................................................8

CHAPTER 3:- PROXIMATE VS REMOTE CAUSE..................................................................10

CHAPTER 4:- PERILS COVERED UNDER INSURANCE CLAIM.........................................12

CHAPTER 5:- MARINE INSURANCE.......................................................................................13

CHAPTER 6:-APPLICATION AND JUDICIAL TREND IN REJUVENATING PROXIMATE

CAUSE IN MARINE INSURANCE............................................................................................14

CHAPTER 7:- ANALYSIS...........................................................................................................15

CHAPTER 8:- CONCLUSION AND SUGGESTION.................................................................17

TABLE OF CASES

Cases

British Columbia Electric Railway Co. Ltd. v. Loach, HL, the United Kingdom, [1916] 1 A.C.
719, p.727.....................................................................................................................................9
C. Sivadasan v. The New India Assurance Co.................................................................................4
C.C.R. Fishing Ltd. v. British Reserve Insurance Co (1990) 1 SCR 814.....................................11
Coxe v. Employers Liabilities Assurance Corporation, King’s Bench, the United Kingdom,
[1916] 2 KB 629..........................................................................................................................7
Dudgeon v. Permbroke (1877)2 AC 284 (H.L)............................................................................11
Global Process Systems v. Syarikat Takaful, Supreme Court, the United Kingdom, 2010 (3) All
ER 248..........................................................................................................................................9
Hamilton Fraser & Co. v. Pandrof& Co, the United Kingdom, (1887) 12 App Cas 518............12
Harris v. Poland, the United Kingdom, (1941) 1 All ER 204.......................................................10
Lawrence v. The Accidental Insurance Co. Ltd [1881] L.R.-7 Q.B.D. 216...................................6
Leyland Shipping Co. Ltd. v. Norwich Union Fire Society Ltd., HL, the United Kingdom, [1918]
AC 350....................................................................................................................................7,12
Nani Bala Sen v. Auckland Jute Co. Ltd., Calcutta High Court, India, (1925) ILR 52 Cal 602,
para. 12.........................................................................................................................................9
Pawsey & Company v. Scottish Union and National Insurance Co, The Times, 17 October 1908.
......................................................................................................................................................7
Pink v. Fleming, Queen’s Bench, the United Kingdom, (1890) 25 QBD 396................................7
Reischer v. Borwick, Queen’s Bench, the United Kingdom, (1894) 2 QB 548..........................7,11
Spaight v. Tedcastle, HL, the United Kingdom, [1881] 6 A.C. 217 , p. 219...................................8
Taylor v.Dunbar, Court of Common Pleas, the United Kingdom, LR 4 CP 206..........................12
Trinder, Anderson & Co. v. Thomes& Mersey Marine Insurance Co , Queen’s Bench, the United
Kingdom, (1898) 2 QB 114, p.124..............................................................................................7
Yorkshire Dale Steamship Company Ltd. v. Minister of War Transport [1942] AC 691..............6
 SYNOPSIS

1.Title of Research paper:-

JUDICIAL TRENDS IN REJUVENATING THE CONCEPT OF CAUSA PROXIMA IN
MARINE INSURANCE
2. Aim of the study:-
The aims of this research paper are:-
i. To know about how Proximate Cause help in determining the reason of the damage or
loss in Marine insurance.
ii. What doctrine applied by the Foreign and Indian Court in deciding the matter of Marine
insurance.
iii. Why court are now rejuvenating the concept of Proximate Cause in Marine insurance
now.
iv. To understand the judicial point of view on determining the concept of the doctrine.
v. To know how the doctrine of proximate cause applicable under insurance law.
3. Scope of the study:-
The scope of this research paper will extend to the Foreign law and foreign Court Judgment
basically UK and US. Further, it also discuss the topic in Indian scenario, under insurance law
and the landmark judgment given by the Indian Court.
4. Significance:-
The research paper tell about the significance of proximate cause applied in Marine insurance by
going through different case laws and how the damage occur and whether it comes under insured
peril or not.
5. Research questions:-
Whether the Proximate Cause is interpreted by the court according case to case basis?
Whether the doctrine of proximate cause play same role in marine insurance case?
Whether wilful misconduct by the insurer lead to damage covered under peril?
Whether there are two proximate causes than which proximate cause will be considered?
6. Research methodology:-
The researcher is use doctrinal research methodology in this research paper. It is totally based on
secondary source i.e various article, books, websites.

3
7. Literature review:-
i. The Rule of Causa Proxima as a Principle of Insurance 1:- the author talk about
Proximate cause in insurance law and how the Judges interpreted the doctrine in different
country like US, UK, India. Further also talk about the applicability of the doctrine in law
of insurance and how to determine the liability if there is any loss to the goods or
carriages.
ii. Doctrine of Proximate Cause-The Application of Commonsense 2:- in this the author
state that for any insurance loss the reason must be proximate cause not the remote cause
should be taken. Further, she also stated that the doctrine of proximate cause applied by
the court is on a definitive basis or its on case to case basis.

iii. Proximate Cause Is it Interpretation of Courts or Is There Any Clear Definition3

In this the author has discussed about the Proximate Cause and how court has interpreted
it. Author also stated that court has approached different- different method to solve the
cases which is discussed through landmark case. According to author there are two
approach to decide is proximate cause and remote cause. Where proximate cause is the
immediate cause due to which the incident happen and the remote cause is which is
before the proximate cause. To decide the case the best approach is the proximate cause.
Which is decided on case to case basis.

Further, many more article are used by the researcher in this project which will be mention in the
following research paper.

1
Manjeet Kumar Sahu, The Rule of Causa Proxima as a Principle of Insurance, 4KSL 154,(2014).
2
Shambhavi, Doctrine of Proximate Cause-The Application of Commonsense, 1 CHPJ 18,(2012).
3
Devikrupa D, Proximate Cause Is it Interpretation of Courts or Is There Any Clear Definition, 1IJLMH 1,(2018).

4
CHAPTER 1:- INTRODUCTION
‘Insurance is a method of spreading over a large number of persons a possible financial loss too
serious to be conveniently borne by an individual.’ By J.B. Maclean4
Insurance is safeguard which provide compensation in a way of financial for the loss cause to the
insured. It does not bring back the same goods or property or give life to the person who is
insured but it can promise to indemnify the person who causes loss or damage or the pay back
the family financial support for the loss occurred to them due to the death of the person.
Insurance law does not cover only person but it also covers goods as well.
As every action has some effect similarly every effect has some cause, therefore the principle of
causation theory comes into picture of Insurance law. Under insurance law we have seen that
properties are insured under different peril for example fire, earthquake, flood, sea, war, riots etc.
if any damage or loss occurred to any property which is insured under Insurance law for that the
insurance company would not go for investigation or to do analysis to find out the reason behind
of which such event has occurred. Therefore to come at conclusion the insurer will considered
the remote cause or the proximate cause of such loss or damage of goods which is insured under
Insurance law, but since these two doctrines was in question therefore the insurer not able to
decided which doctrine will be applicable to decide the loss occurred due to which reason.
There has been a lot of debate on the applicability of doctrine as to which doctrine will be
applicable for recovery of damage or loss occurred to the goods whether remote cause and
proximate cause will be applied to find out the loss occurred due to which reason was in
question. The judiciary have decided many judgments as to which doctrine would be applicable
and appropriate to find out the damage or loss cause to the goods insured. These two doctrines
has been in question from long time, later the doctrine of proximate cause has played a very
important role under law of insurance where the doctrine in jure causa proxima non remota
spectator which mean the proximate cause not the remote cause will be applicable on deciding
the question of insurance in case of loss or damage of goods under insurance law.
The reason behind considering doctrine of proximate cause is that there are many causes for
causes and to decide because of which cause the damage or loss has occurred it would be
difficult and also complex there to settle this the doctrine of proximate cause was applied in all
insurance law. The question arises when number of event occurs and due to which the loss or

4
C.L. Tyagi & Madhu Tyagi, Insurance Law and Practice, Atlantic Publishers & Distributors, New Delhi, 2007, p.
2.

5
damage happen to the goods in that subsequent event which cause loss to goods the doctrine of
proximate cause will be applied to find out the real reason of such loss as per the policy given
under insurance law. Further, the loss of goods under insurance law does not cover the goods
covered under peril it only covered the goods which are damaged or loss. Therefore the
insurance law work on principle of indemnification where the goods which are damaged or loss
that much part of the goods will be indemnify by the insurer not the goods which are covered
under insurance policy.
Therefore the principle of insurance law is based on the doctrine of proximate cause and that
much goods will be indemnify which is loss or got damage not the whole goods covered in peril
for that only the insured has right to recover the by the loss or damage from the insurer. Further
the same doctrine of proximate cause is also applicable on Marine Insurance to find out the
proximate cause of the loss occurred to the goods under Marine Insurance law. Proximate cause
is the immediate cause due to which goods got damaged or loss, if the immediate cause is
insured peril in that case the insured will be indemnified for the loss caused to the goods or the
insured property.5
But when it comes to the wilful miscount due to remote cause because of which the loss or
damage has occurred in that case the doctrine of proximate cause is not applicable and instead of
that the other principle is applied where no one can be benefited from its own wrong. 6 Insurer
will not be liable for the goods which are uninsured peril or which is accepted or caused by
misconduct or the insured fault. In such case the insured will not be indemnified for the loss
occurred to them due to their own wilful misconduct or fault.
Insurance is way to protect individual or company from any financial loss. There are different
types of insurance for example fire insurance, marine insurance, life insurance etc. To come
under one the insurance individual have to take insurance policy and it is also important to cover
them self under the given peril. If any loss occurred due to some act which is not mention in the
policy then the Insurance Company will not be liable and the insuree is not covered under the
insurance policy.

Proximate cause means “the nearest cause or the immediate one” in Latin we say “causa
proxima non remota spectator”. Marine Insurance Law talk about two doctrine 1) “causa

5
C. Sivadasan v. The New India Assurance Co., Kerela High Court, India, A.S. no. 647 of 1994, decided on 25
March 2011.
6
See Susan Hodges, Law of Marine Insurance, 1st edn, Cavendish Publishing Ltd., London, 1996, p.158.

6
proxima non remota spectator 2)"non remota causa sed proxima spectator". One which is
Bacon’s Rule and other is Newton’s Rule respectively. Who have discuss these two doctrine in
detail and given there point of view. There Rules are still applicable in courts, who give there
judgment on the basis of these doctrine.

There is also a third part to this paper is the insurer has done a willful misconduct which leads to
the damage and that damage is covered under the peril. In such situation the law will applied in
different way as compare to other scenario, with the landmark judgments.

Further, the paper will analyze the test to find out the Proximate Cause of the damage and if
there is two proximate cause then which will be applicable. It will be discussed with the case
laws where insurer is liable to pay. With that the researcher will analyze that where the judges
have applied court interpretation or there common sense while deal with marine insurance cases.

When it comes to insurance money or compensation, the insured have to prove that the accident
happen is not because of their negligent act and it is because of the Proximate Cause. So depend
on case to case the burden of proof is shifted. With the problem faced by the insurance policy
holder is also discussed in this case.

The researcher is going to talk about the concept of proximate cause in marine insurance. It will
be started with the history of Proximate Cause is going to be discussed and how the foreign court
applied these rule in there cases. Further, we are going to discuss about the India scenario
according to judicial point of view, followed by conclusion and suggestion.

7
CHAPTER 2:- HISTORY OF PROXIMATE CAUSE
Doctrine of causa promixa is taken from Latin phrase “in jure causa proxima non remota
spectator” which means the proximate cause that the immediate cause due to which the loss or
damage has occurred. Whereas the remote cause means the event occurred before the proximate
cause. The doctrine of proximate cause came into picture in 19 century, where Lord Bacon has
explained the doctrine “It were infinite for the law to judge the cause of causes, and their
impulsion one or another; therefore it contenth itself with the immediate cause, and judgeth of
acts by that, without looking to any further degree”.
Further, “proximate” was not even used by Lord Bacon instead “immediate” word was used to
describe the proximate word. To elaborate this Watkins, J. has explained the above context in the
Lawrence v. The Accidental Insurance Co. Ltd7 where he held that
“It seems to me that the well-known maxim of Lord Bacon, which is applicable to all
departments of the law, is directly applicable to this case....Therefore, I say according to the true
principle of law, we must look at only the immediate and the proximate cause of death, and it
seems to me impracticable to go back ultimately to the birth of the person, for if he had never
been born the accident would not have happened”
Concept of Proximate cause has been followed from way back to Aristotle time where the
concept was understand as a common sense where common people can understand the cause of
loss or damage without applying any scientific or mathematic procedure or any other method to
find out the reason or cause of loss or damage and further, Lord Wright in Yorkshire Dale
Steamship Company Ltd. v. Minister of War Transport8 held that:-
“The choice of the real or efficient cause from out of the whole complex of the facts must be
made by applying common sense standards. Causation is to be understood as the [person] in the
street, and not as either the scientist or the metaphysician, would understand it. Cause here
means what a business or seafaring person would take to be the cause without too microscopic
analysis but on a broad view”

7
Lawrence v. The Accidental Insurance Co. Ltd [1881] L.R.-7 Q.B.D. 216.
8
Yorkshire Dale Steamship Company Ltd. v. Minister of War Transport [1942] AC 691.

8
Further in Trinder, Anderson & Co. v. Thomes& Mersey Marine Insurance Co.9 that doctrine of
proximate cause is not applicable if there is wilful misconduct by remote cause in that case L.J
Smith has held that:-
“after acknowledging the fact that remote causes were generally inconsequential, reminded the
court that the maxim causa proxima non remota spectator was qualified by a well-established
legal maxim dolus circuitu non purgatur, which simply means that a loss, even though
proximately caused by a peril insured against, would not be recoverable if it was also
occasioned albeit remotely by the wilful misconduct of the assured”
Therefore, if there is any wilful misconduct or and fault on behalf of the insured in that case the
doctrine of proximate cause is not applicable.
Proximate cause principle is not ascertain as it play a vital role to decide what amount to
proximate cause whether the immediate cause due to which the damage or loss has occurred will
be considered as proximate cause10 or whether the efficient cause due to which the damage has
occurred is considered as the proximate cause.11 This difference was discussed in Leyland
Shipping Co. Ltd. v. Norwich Union Fire Society Ltd.12
Proximate cause was defined in Pawsey & Company v. Scottish Union and National Insurance
Co.13 “the active efficient cause that sets in motion train or events which bring about a result,
without the intervention of any force, started and working actively from a new and independent
source”. Further in Coxe v. Employers’ Liability Assurance Corporation 14 in this case an army
officer was passing through railways line where he met with an accident and amount to death.
Later the question of insurance was raised where it was held that since the insurance peril does
not cover death or accident due to war, since death was caused due to train which is proximate
cause but the reason of his presence is because of the war therefore he is not entitled for the
insurance.
Further the Indian law follow the second concept i.e the efficient proximate cause due to which
the damage or loss has occurred. Another important point is that any incident has occurred due to
more than one cause than it is not necessary to consider the immediate cause of occurrence of

9
Trinder, Anderson & Co. v. Thomes& Mersey Marine Insurance Co , Queen’s Bench, the United Kingdom, (1898)
2 QB 114, p.124.
10
Pink v. Fleming, Queen’s Bench, the United Kingdom, (1890) 25 QBD 396.
11
Reischer v. Borwick, Queen’s Bench, the United Kingdom, (1894) 2 QB 548.
12
Leyland Shipping Co. Ltd. v. Norwich Union Fire Society Ltd., HL, the United Kingdom, [1918] AC 350.
13
Pawsey & Company v. Scottish Union and National Insurance Co, The Times, 17 October 1908.
14
Coxe v. Employers Liabilities Assurance Corporation, King’s Bench, the United Kingdom, [1916] 2 KB 629.

9
such damage or loss. Even the last event can be considered as the proximate cause of the loss or
damage.

CHAPTER 3:- PROXIMATE VS REMOTE CAUSE

Insurance law is based on two doctrines the first doctrine if Proximate cause or ‘causaproxima’
and the second doctrine is remote cause. These two doctrine have been on conflict from 19
century, as there are many judgment based on these two principle which is discussed by the court
to find out which doctrine is applicable for deciding the case of insurance.
Dealing with proximate cause the principle has been arises from Aristotle time where the
immediate cause was taken into consideration while deciding the case as to which cause is the
reason for the loss or damage of the goods which is insured. Sometime there causes for cause and
due to which it will be difficult to understand which cause was the main reason for the loss or
damage of the goods or property. To clarify this the court has discuss many cases where it was
find out that the judge should decide cases of proximate cause based on the common sense of the
common people. Where it can be clearly find out by the common people the reason behind the
loss or damage of goods or property without going into detail of the act or cause. This principle
was based on the causation theory where due to which cause the effect has arises.
This principle is slightly different in India where the court have not went into the proximate
cause but they considered the point of effective proximate cause so the cause because of which
the effect has been started will be considered as the effective proximate cause.
The doctrine of remote cause is means cause which is before the proximate cause and that cannot
be unascertained as there can be many causes due to which such event has occurred and therefore
deciding the remote cause is the not a valid point. Therefore to decide the reason or cause behind
the incident or damage or loss doctrine of proximate cause is appropriate principle.
Further if we considered that proximate cause is the immediate cause can be taken as direct cause
or indirect cause. To decide this court has discussed the above principle in Spaight v. Tedcastle15
in this the court has discussed whether proximate cause can be considered as direct cause or
indirect cause through remote cause in terms of immediate cause. In this case the court has held
that:-
“When the direct and immediate cause of damage is clearly proved to be the fault of the
defendant, contributory negligence by the plaintiffs cannot be established merely by showing
15
Spaight v. Tedcastle, HL, the United Kingdom, [1881] 6 A.C. 217 , p. 219

10
that if those in charge of the ship had in some earlier state of navigation taken a course, or
exercised a control over the course taken by the tug, which they did not actually take or exercise,
a different situation would have resulted, in which the same danger might not have occurred”.
Further, in British Columbia Electric Railway Co. Ltd. v. Loach 16 that “many Judges have
applied to the cause, which has to be ascertained for this judicial purpose of determining
liability and how many more to other acts and incidents, which for this purpose are not the
cause at all”.
Further in Nani Bala Sen v. Auckland Jute Co. Ltd.17 The court has discussed about type of cause
it can be “Efficient or effective cause, real cause, proximate cause, direct cause, decisive cause,
immediate cause, causacausans on the one hand, as against, on the other, causa sine qua non,
occasional cause, remote cause, contributory cause, inducing cause, condition, and so on”.
From the above judgment it is clear that immediate cause cannot be considered as direct cause
neither direct and indirect cause can be considered as the antonyms to each other while deciding
the proximate cause in case of insurance.
Further if there is two proximate causes than in that case whether the insurance company is liable
to compensate or indemnify the insured party. This question was discussed in many judgments.
In Global Process Systems v. Syarikat Takaful 18 the court has discussed the above mention issue
i.e in case if there is two proximate cause than which will be considered and if both is considered
than how the compensation is paid in such scenario. The court has discussed two point of view
first is if there is two proximate cause and the goods is insure peril for the first proximate cause
and not expressly excluded from second proximate cause than in that case the it will come under
the insurance policy and the party is indemnify by the insurance company. The second point is
that for the first proximate cause the peril is insured but for the second the peril is expressly
excluded in that case the insured party will not be covered under insurance policy and therefore
they will not indemnified or compensate for the loss or damage to the goods or property.

16
British Columbia Electric Railway Co. Ltd. v. Loach, HL, the United Kingdom, [1916] 1 A.C. 719, p.727
17
Nani Bala Sen v. Auckland Jute Co. Ltd., Calcutta High Court, India, (1925) ILR 52 Cal 602, para. 12.
18
Global Process Systems v. Syarikat Takaful, Supreme Court, the United Kingdom, 2010 (3) All ER 248.

11
CHAPTER 4:- PERILS COVERED UNDER INSURANCE CLAIM
Under insurance law peril is classified in three different category i.e insured peril, uninsured
peril, excluded peril.
1) Insured peril :- is a peril which is included in the terms or policy of insurance of the
company for example insurance against goods damage due to fire, water, earthquake etc.
these peril are insured peril and if any goods are damaged or loss than the insurer
company have to compensate or indemnify the insured person.
2) Uninsured peril:- are the peril which is not insured and which is also not excluded in that
case the peril comes under uninsured peril. For example in case of fire peril the word
smoke is not insured not even mention as excluded that will comes under uninsured peril.
3) Excluded peril:- peril which is mentioned in the policy or terms of the insurance where it
is mention that these peril are excluded from the insurance policy. For example if it is
mention that the goods is excluded from fire than in that case the insurer cannot be
indemnify or can ask for compensation.
Proximate cause principle is applied in insured peril only not in other peril i.e excluded and
uninsured peril. Further, the doctrine is applicable in insured peril whether the event of
damage or loss happened due to negligence of the insured or because of the third party it is
irrelevant in the case of proximate cause in insured peril.

Further, in Harris vs Poland19 in this case the women insure her jewellery against fire in case
of damage or loss. Later she hides that jewellery near a fire place. The insured forgot about
the jewellery and lit a fire in that area due to which the whole jewellery got damage. The
insured claim for the money for the damage of jewellery which was objected as the insured
was negligent and due to which the fire take place therefore the insurance company is not
liable to compensate the insured. This was challenged in court where the court held that since
the jewellery comes under insured peril therefore, it is irrelevant to talk about whether the
goods is damaged due to the insured negligent or due to the third party negligent. The
insurance company have to indemnify the insured for the loss of jewellery.

Therefore the doctrine of proximate cause is applicable in insured peril only and not for
uninsured or excluded peril. Further, it is totally irrelevant to consider where the loss or
damage is occurred due to negligent of the party or due to third person, if it is insured peril

19
Harris v. Poland, the United Kingdom, (1941) 1 All ER 204.

12
 than in that case the insurance company is liable to compensate or indemnify the insured
person.

CHAPTER 5:- MARINE INSURANCE

The reason behind developing marine insurance law was the trading system which took place
from 16th century, where goods where transported from one country to another through ship. To
safeguard the goods and ships the law of insurance was introduce so that if any loss have
occurred or any damage take place to the cargo or goods during the voyage the carrier was made
liable or the whole burden come to the head of the carrier. To protect them from such burden
insurance law is required to economically support them at the time of the damage or loss have
occurred.

Marine insurance is the first insurance contract which was made way century back as all the
trade take pace through sea therefore, it also known as “mother of all insurance”. It is considered
as the oldest insurance. ‘Hammurabi code’ is the first written code of marine insurance law. The
law governing the marine insurance is the Lex Mercatoria law i.e law of merchants. Earlier
marine insurance was introduced in the form of “bottomry” which protect the merchant from any
loss or damage at the time of voyage.20

The first marine insurance market was Lloyd's Coffee House it become a place where all
shipping owner or industry people meet with each other and insure their cargo, ships etc. Marine
insurance is based on the principle of indemnity, therefore in marine insurance law the insurer
undertake to indemnify the insured goods if is cause damage or loss due to peril of sea. In this
the insured is indemnify for that much goods which is damaged or loss not the whole goods
which is insured. In India Marine Insurance Act 1963 has be implementing to give protection to
the carrier of the goods and the owner of the cargo.21

The contract of marine insurance is based on the doctrine of uberrimae fidie which mean
principle of utmost good faith, where it is expected that the insured and the insurer must disclose
all the information related to the goods. If there is no disclosure of any information than in that

20
Christopher Kingston, Marine Insurance in Britain and America, 1720-1844: A Comparative Institutional Analysis,
EHS (Aug. 17, 2014, 11.13 PM), http://www.ehs.org.uk/dotAsset/332686ee-2db9-4f09-abc6- cb900150d473.pdf
21
Addya Mishra, Archika Agarwal, Marine insurance and its legal aspects in India: Perils of the Sea, International
Journal of Law and Legal Jurisprudence, Volume 1 Issue 8.
(lljs.in/wp-content/uploads/2014/12/Short_Article_Marine_insurance_and_its_legal_aspects_in_Indi-1.pdf)

13
case that goods will not covered under Marine insurance law. Further, Marine insurance is based
on doctrine of proximate cause where the immediate cause be taken into consideration while
deciding the liability not the remote cause.

CHAPTER 6:-APPLICATION AND JUDICIAL TREND IN REJUVENATING

PROXIMATE CAUSE IN MARINE INSURANCE
Judicial trend has played a vital role in determining the concept of proximate cause where the
doctrine is applicable on case to case basis. The applicability of the doctrine is dealt by the
Judiciary in different cases related to different peril for example earthquake, marine insurance in
which the proximate cause has been applied.
The principle of “causa proxima” is applicable in Marine insurance law if any loss caused to
goods by peril of sea. The Hague Visby rule define Peril of sea under article 4(2)(c) as any peril,
accident, danger cause on sea or which is covered under the terms and condition given in Marine
insurance or bill of lading. In India it is settle law that doctrine of proximate cause will be
applicable in case Marine insurance case, further any loss would not have occurred without that
reason.22 To govern this act the Marine Insurance Act 1963 is applicable which talk about the
doctrine of proximate cause.
In Dudgeon v. Permbroke23 in this case ship was insured on the basis of time policy and on the
voyage it was lost in the strong wind and waves. The insured claimed for indemnification for the
damage of the goods where the insurer rejected the demand as the ship was not fit for voyage and
therefore they are not entitle for the indemnification. On this the court held that in marine
insurance case the doctrine of proximate cause will be applicable and according to it the ship was
lost due to strong and violent wind and the waves therefore the insurer company is liable to pay
for the loss occurred to the insured.
Further, when it comes into question whether on the misconduct done by the party itself will it be
covered under proximate cause or not. To understand this Supreme Court of Canada has given it
judgment in C.C.R. Fishing Ltd. v. British Reserve Insurance Co. 24 in this case there was a
fishing vessel which sank due to ingress of water, failure of cap screw, further due to corrosion
and failure to close valve due to which the ingress of sea water was not stopped. The appellant
contended that he will be covered under peril by sea, which was objected by the insurance
22
Reischer v. Borwick (1894) 2 QB 548.
23
Dudgeon v. Permbroke (1877)2 AC 284 (H.L)
24
C.C.R. Fishing Ltd. v. British Reserve Insurance Co (1990) 1 SCR 814.

14
company. The court held that the appellant should be indemnifying as the damage covered under
peril of the sea. In this case it was also clarified that peril of sea covered causalities of sea and
fortuitous accident.
In Taylor v. Dunbar25 in this case the ship was carrying meat which got decomposed due to the
delay, later it was thrown overboard. For the damage and loss occurred on such happing the party
asked for compensation as it was covered under the peril of the sea. This was objected as the
meat is not covered under peril of the sea. The court held that since the decomposed of meat
happen due to delay which is proximate cause and the delay was caused by peril which is insured
by the party, therefore the insurer have to indemnify the insured and have to pay compensation.
Further the court held in Hamilton Fraser & Co. v. Pandrof & Co.26 in this case the ship was
carrying rice which was insure from sea water but in mean time of voyage the rat cut the pine
connected which is connected with bathroom with the sea water and due to which the sea water
enter where rice was stored and damaged all the rice. The insured claimed for the compensation
for the loss occurred at the time of transport. The insurance company raised the object as the
goods were insured against the sea water but in this case it was damaged due to rat therefore they
are not liable to compensate the insured. The court held that since the proximate cause is the sea
water which damaged the rice and the rats come under the remote cause therefore the damage of
rice comes under insured peril.
In Leyland’s Shipping Co. v. Norwich Fire Insurance Co.27 “in this ship was covered under all
peril related to sea. The ship was torpeodoed by submarine belonging to Germany on the way of
its voyage. She was towed near to the port where she was moored inside the outer breakwater.
There she remained for two days taking to ground at each ebb tide but floating again with the
flood and finally her bulkheads gave way and she sunk. The Court held that torpedoing was the
proximate cause of the loss and the underwriters were protected by the warranty against all
consequences of hostilities. The point is that the original cause predominates and is regarded as
the real cause of the loss unless it was merely facilitating a subsequent cause which totally
changed matters”.

25
Taylor v.Dunbar, Court of Common Pleas, the United Kingdom, LR 4 CP 206
26
Hamilton Fraser & Co. v. Pandrof& Co, the United Kingdom, (1887) 12 App Cas 518.
27
Leyland’s Shipping Co. v. Norwich Fire Insurance Co., (1918) AC 350

15
CHAPTER 7:- ANALYSIS
Insurance law based on the principle of beneficiary rule as it provides economic support after the
death, loss or damage of goods or property or person. But to come under the terms and policy of
insurance the goods must come under insured peril than only the insured will get the money or
compensation or in other words the insurance company will indemnify the insured party.
Insurance law does not cover all goods which is insured it only covered the damage goods or the
goods which are lost not the whole goods, i.e the principle of indemnification is applicable in this
context. Further dealing with Insurance law the main question arises the types of peril and what
if the goods are comes under uninsured peril or whether the willful misconduct of the party will
cover in insured peril is different in marine law where for willful misconduct the insurers have to
pay compensation.

Marine insurance is based on the doctrine of proximate cause not on remote cause therefore the
immediate act will be taken into consideration while deciding the liability of the insurer. But
there is slight difference in India is that the effective proximate cause will be considered not the
proximate cause as there can be many causes for cause and to decide according to which cause
such event have occurred therefore, to decide the liability the only way is to find out the effective
proximate cause not proximate cause.

The concept of proximate cause is based on case to case basis as the circumstance on which
court have to decide whether compensation or indemnification can be done based on each cases.
Further, when it comes to proximate cause in maritime law the doctrine is applied as same as
everywhere in insurance law. Further proximate cause principle is applicable on insured peril
only not against the uninsured or excluded peril, and it is also irrelevant to discuss about whether
it amount to negligent of the insured or other person while deciding the liability of insurance
company to indemnify or compensate the insured.

The main reason behind the insurance law is to reduce the burden of the insured person from loss
or damage of goods therefore the concept of proximate cause must be taken with good intension
as insurance law is made for the benefit of the society and therefore while deciding any case on
marine insurance law proximate cause must be taken into consideration and on the basis of case
the court have to interpreted the doctrine according to it and the court should apply common
sense while deciding the case.

16
Further the last research question was on two proximate cause, if such situation arises where
there is two proximate cause than in that case the court will look into the causes if they are
covered under insured peril than in that case and not come under excluded peril than in that case
it will be covered under insurance policy and if the second proximate cause is expressly excluded
than it will not be covered under insurance policy.

CHAPTER 8:- CONCLUSION AND SUGGESTION

Insurance law is based on beneficiary rule of interpretation where the society is benefited if there
is any loss or damage has occurred. This law has be introduce to reduce the burden of the people
and also helping them economically. The judiciary have to decide any cases related to insurance
must keep in mind the common sense as the insurance case is not about hard and fast rule it is
about the act which cause damage or loss to people and they should be benefitted through it. The
key principle of insurance is proximate cause on which the case is decided. Court has compare
both the doctrine i.e proximate cause and remote cause and come to conclusion that proximate
cause is more appropriate principle than remote cause to decide the liability of insurance
company.

When it comes to Marine insurance law it is based on principle of indemnity and in that case the
doctrine of proximity is the appropriate principle as there cannot be other doctrine which can be
followed in this situation. Further, even if there is negligent on part of the party than also the
insurance company is liable to compensated the insured, but in case of wilful misconduct than
the insurance company is not liable to indemnify the insured party.

17