The Maritime and Commercial Court recently ruled on whether a shipwreck in Greenlandic waters, caused by a collision with a submerged rock in darkness and fog at a speed of 15-16 knots, could be considered due to gross negligence.
1. Facts of the Case:
The owner of a motorboat had taken out hull insurance with insurer F. The insurance terms stated that coverage could be reduced or denied if the insured caused damage through gross negligence. Gross negligence was defined in the insurance policy as follows:
"Gross negligence occurs when a person significantly fails to exercise the necessary care required by the circumstances as a whole, fails to make the simplest considerations, and/or fails to account for matters that should be obvious to a reasonable person under the given circumstances."
On September 16, 2022, the owner sailed from Nuuk, Greenland, in his motorboat along the so-called “Sisak route” for a hunting trip. The Sisak route is commonly used by Greenlandic police cutters and is logged into GPS. The boat navigated at speeds between 15-24 knots in dark, foggy, and calm weather. Visibility was 5-7 meters when using a spotlight, and it was raining. During the voyage, the motorboat struck a submerged rock and sank. The owner claimed compensation under the hull insurance for the loss of the boat, amounting to DKK 876,000.
The hull insurers denied the claim, asserting that the damage was caused by gross negligence, arguing that:
· Traveling at 15-16 knots with a visibility of 5-7 meters was reckless.
· The collision could have occurred because the boat strayed outside the Sisak route, as the owner and passengers were rescued from a position outside the route.
· By navigating at such a speed, the owner would not have been able to visually detect the rock in time or react if the depth sounder indicated shallow water.
The insured denied that the collision was due to gross negligence, arguing that:
· The burden of proof for gross negligence rested on the hull insurers.
· The plaintiff was an experienced sailor in Greenlandic waters and had navigated the Sisak route many times using GPS.
· Poor visibility and speed were not the cause of the collision, as it would have occurred even in daylight.
2. The Court’s Decision:
The court found that the wreck could not be considered to have been caused by gross negligence, and the hull insurers were therefore obligated to pay insurance compensation.
The court specifically noted the following:
"It has not been demonstrated that [the insured], due to the sailing route, reduced visibility caused by fog, weather conditions, the speed of the boat, or other circumstances, exhibited gross negligence as defined in the insurance terms. According to the testimony of [the insured] and [a passenger], relevant actions were taken both before and after the wreck. It appears unlikely that [the insured] could have seen and avoided a submerged rock, visible only under certain favorable daylight conditions, with the naked eye. It has not been demonstrated that a lower speed would have prevented the collision or that a lower speed would have resulted in less damage under the given conditions, where it cannot be excluded that lower speed would have made the current have a greater effect on the boat, complicating safe navigation further."
3. Comments:
Under general principles, the burden of proof that a collision-related damage results from gross negligence lies with the hull insurers. In non-charted waters with poor visibility, traveling at 15-16 knots could, depending on the circumstances, be deemed reckless. It must be deemed to have been of significant relevance for the result that the insured was able to demonstrate, through testimonies, that the collision occurred on the “Sisak route” and that this was a customary navigational path. Based on this, the court concluded that the wreck was caused by a collision with a submerged rock that could not have been detected by the insured. The case demonstrates that the question whether gross negligence has occurred is assessed based on the specific circumstances of the case.
Maritime and Commercial Court Ruling of October 11 in Case BS-60061/2023-SHR.
