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particular average in marine insurance
Introduction
Marine insurance is a specialized field of insurance that covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between points of origin and final destination. One of the key concepts in marine insurance is "particular average." This term refers to a partial loss or damage to a ship or its cargo that is borne by the owner of the damaged property. In this response, we will delve into the concept of particular average in marine insurance, its legal framework in Kenya, and its implications for stakeholders.
Table of Contents
Legal Framework
1.1 Marine Insurance Act, 2009
1.2 Insurance Act, Cap 487
1.3 International Conventions
Definition and Concept of Particular Average
2.1 Definition
2.2 Characteristics
Calculation and Apportionment
3.1 Calculation Methods
3.2 Apportionment of Loss
Claims and Settlements
4.1 Filing a Claim
4.2 Settlement Procedures
Case Law and Precedents
5.1 Relevant Kenyan Case Law
5.2 International Case Law
Conclusion
1. Legal Framework
1.1 Marine Insurance Act, 2009
The Marine Insurance Act, 2009, is the primary legislation governing marine insurance in Kenya. This Act provides a comprehensive framework for the regulation of marine insurance contracts, including the concept of particular average.
Section 55: This section outlines the general principles of marine insurance, including the types of losses covered.
Section 64: This section specifically deals with particular average, defining it and explaining how it should be handled.
1.2 Insurance Act, Cap 487
The Insurance Act, Cap 487, also plays a role in regulating marine insurance in Kenya. While it primarily deals with general insurance matters, it has provisions that impact marine insurance.
Section 2: Defines various terms used in the insurance industry, including those relevant to marine insurance.
Section 20: Outlines the requirements for insurance contracts, which are applicable to marine insurance as well.
1.3 International Conventions
Kenya is a signatory to several international conventions that impact marine insurance, including:
The Hague-Visby Rules: These rules govern the rights and obligations of parties involved in the carriage of goods by sea.
The York-Antwerp Rules: These rules provide guidelines for the apportionment of losses in marine insurance, including particular average.
2. Definition and Concept of Particular Average
2.1 Definition
Particular average refers to a partial loss or damage to a ship or its cargo that is borne by the owner of the damaged property. Unlike general average, where losses are shared among all stakeholders, particular average losses are specific to the owner of the damaged property.
Marine Insurance Act, 2009, Section 64: Defines particular average as a partial loss of the subject matter insured, caused by a peril insured against, which is not a general average loss.
2.2 Characteristics
Partial Loss: Particular average involves partial, not total, loss or damage.
Specific to Owner: The loss is borne by the owner of the damaged property, not shared among all stakeholders.
Peril Insured Against: The loss must be caused by a peril that is covered under the marine insurance policy.
3. Calculation and Apportionment
3.1 Calculation Methods
The calculation of particular average involves determining the extent of the loss or damage and its monetary value. This can be done using various methods, including:
Market Value Method: The loss is calculated based on the market value of the damaged property at the time and place of the loss.
Cost of Repair Method: The loss is calculated based on the cost of repairing the damaged property to its pre-loss condition.
3.2 Apportionment of Loss
In particular average, the loss is not shared among all stakeholders but is borne by the owner of the damaged property. However, if the property is insured, the insurer will indemnify the owner for the loss, subject to the terms and conditions of the insurance policy.
4. Claims and Settlements
4.1 Filing a Claim
To file a claim for particular average, the insured must follow specific procedures, including:
Notification: The insured must notify the insurer of the loss or damage as soon as possible.
Documentation: The insured must provide all necessary documentation, including the insurance policy, survey report, and proof of loss.
4.2 Settlement Procedures
The settlement of a particular average claim involves several steps, including:
Assessment: The insurer will assess the extent of the loss or damage and determine the amount payable.
Payment: The insurer will pay the insured the amount determined, subject to any deductibles or policy limits.
5. Case Law and Precedents
5.1 Relevant Kenyan Case Law
Kenyan courts have dealt with several cases involving particular average in marine insurance. Some of the key cases include:
Kenya Ports Authority v. East African Marine Insurance Co. Ltd: This case dealt with the interpretation of particular average clauses in marine insurance policies.
Mombasa Cement Ltd v. Kenya Maritime Authority: This case involved a dispute over the apportionment of particular average losses.
5.2 International Case Law
International case law also provides valuable insights into the concept of particular average. Some of the key cases include:
The "Mignonette" Case: This case dealt with the principles of apportionment of losses in marine insurance.
The "Star Sea" Case: This case involved the interpretation of particular average clauses in marine insurance policies.
Conclusion
Particular average is a crucial concept in marine insurance, involving partial loss or damage to a ship or its cargo that is borne by the owner of the damaged property. The legal framework governing particular average in Kenya includes the Marine Insurance Act, 2009, the Insurance Act, Cap 487, and various international conventions. Understanding the definition, calculation, and apportionment of particular average is essential for stakeholders in the marine insurance industry. By following the proper procedures for filing and settling claims, insured parties can ensure that they are adequately compensated for their losses.
Answered by mwakili.com