A UK court in Amlin Corporate Member Ltd v Oriental Assurance Corporation held that reinsurers were entitled to enforce an express warranty clause that provided that cargo on the carrying vessel would not be covered if the vessel sailed out of port when there was a typhoon warning.
The vessel did sail into a typhoon despite a warning and the cargo was lost. The court rejected the argument that the warranty had to be read in the light of local coast guard guidelines and in the light of what an experienced insured mariner would have understood the storm warning to mean.
The commercial purpose was to ensure that no unnecessary risks would be taken and not to allow the insured to make a subjective judgment of the degree of danger. In the circumstances the reinsurer did not have to follow the settlement of the underlying insurer and did not have to pay the reinsurance claim.