In Garnat Trading & Shipping (Singapore) PTE LTD (GARNAT) and Vung Tau Shipbuilding Industry Joint Stock Company (Vung Tau) v Baominh Insurance Corporation (Baominh) [2010] EWHC 2578 (Comm), the Court of Appeal considered the first instance judgment of Mr Justice Clarke which we previously reported here.

The appellant insurers sought to overturn the first instance findings that a fair presentation of risk had been made by the insured ship owners, and that the implied warranty as to seaworthiness had been satisfied. They contended that a fax and email purportedly sent by the ship owners during pre-contractual disclosure were in fact fabrications of a later date and that Clarke J had approached case in a manner adverse to the insurers due to his finding that the ship owners' principal witness was honest.

The court upheld Clarke J's decision. It was held that the appellant's submissions regarding the fax and email had little supporting evidence and were founded on speculation. The judge at first instance had been justified in accepting the honesty of the ship owners' witness.

As to seaworthiness, the court found that no new arguments had been presented and that there was nothing to persuade the court that Clarke J's conclusion was wrong. There was an implied warranty in the insurance policy that the vessel would be seaworthy for the purpose of the contemplated voyage. The court agreed with Clarke J that the contemplated voyage meant one in which wave heights of 3.5 metres would be encountered (the ship in fact encountered 10 metre waves). Applying this test, the ship had been seaworthy at the commencement of the voyage.

This decision and the first instance judgment provide useful guidance on the nature and extent of the insured's duty of disclosure and the implied warranty of seaworthiness.