Court of Appeal clarifies duty of fair presentation in maritime insurance dispute

In Delos Shipholding SA & Ors v Allianz Global Corporate and Specialty SE & Ors, the Court of Appeal has delivered a significant judgement addressing maritime insurance principles following the detention of the vessel WIN WIN by Indonesian authorities. The decision, handed down on 30 July 2025, examines the interplay between the Insurance Act 2015's duty of fair presentation and exclusions in maritime policies.

The dispute arose from events between 17 February 2019 and 9 January 2020, when the WIN WIN, owned by Delos Shipholding SA, was detained for anchoring without permission in Indonesian territorial waters. Following the vessel's constructive total loss declaration under the war risks policy, Allianz Global Corporate and Specialty SE contested the claim on multiple grounds, principally concerning breaches of the duty of fair presentation under the Insurance Act 2015.

The insurers' challenge focused on two critical areas: the application of disclosure duties within a one-ship company structure, and the policy exclusions relating to detentions not arising from hostilities. Central to their argument was the alleged failure by Delos to disclose serious criminal allegations against its sole director, Mr Bairactaris, when entering the insurance contract.

The underlying circumstances revealed that the WIN WIN was engaged in routine shipping operations until Indonesian policy changes led to aggressive enforcement against vessels anchoring illegally. Despite questions over the lawfulness of the detention under international law, the Court recognised that Indonesian authorities acted within their domestic legal framework, complicating the insurers' reliance on policy exclusions regarding 'arrest, restraint or detainment' under customs or quarantine regulations.

The judgement's most significant aspect concerned the interpretation of section 3 of the Insurance Act 2015, which mandates that insured parties provide fair representation of risks when entering insurance contracts. The Court was required to determine whether the criminal allegations against Mr Bairactaris constituted material information that should have been disclosed to the insurers.

The Court ultimately found that this information was neither material to the policy nor pertinent to the insurers' risk assessment. The evidence demonstrated that Mr Bairactaris operated as a nominee director without significant managerial authority or decision-making responsibility within Delos's operational structure. Consequently, his alleged legal difficulties were deemed unconnected to the company's policy obligations or the risks being insured.

The judgement also highlighted the complex relationship between local maritime enforcement and international trade practices. The Court noted how Indonesian authorities' interpretation of their territorial waters regulations created exposure for vessels following standard international shipping practices, demonstrating the challenges facing maritime operators in navigating varying jurisdictional approaches.

The dismissal of the insurers' appeal reinforces established principles governing material disclosure in maritime insurance whilst clarifying the boundaries of fair presentation duties. The decision emphasises that disclosure obligations must be assessed in the context of their actual relevance to the insured risks, rather than any theoretical connection to the insured entity.

This ruling carries substantial implications for maritime insurance practice, particularly regarding the assessment of materiality in disclosure requirements. The judgement underscores the importance of distinguishing between information that appears significant and information that genuinely affects risk evaluation. The decision also highlights the continuing relevance of local regulatory frameworks in determining the validity of detention-related insurance claims.

The case serves as a reminder of the evolving nature of maritime regulatory environments and the need for careful analysis of both disclosure obligations and policy exclusions in the context of rapidly changing international trade conditions.