L'ATLANTIQUE CASE

Evening Post, Volume CXVII, Issue 76, 31 March 1934, Page 11

L'ATLANTIQUE CASE

FRESH DOCU3IENTS

IMMEDIATE APPEAL LIKELY

IiOIsDOl?, March' 29. A party of Englishmen, after an exciting journey to Switzerland, obtained documents which enable : underwriters immediately to appeal against the Paris Court's verdict of £2,000,000 insurance oh the liner L'Atlantique. ; The documents not only prove that important facts concerning the steamer's construction were withheld when it was reinsured,, but connect the Stavisky gang with the fire.

_ The Seine Commercial Tribunal gave judgment in January in favour of the owners of the Atlantique in their action against underwriters and insurance companies, on the hull. The ship, which, was burned in. January, 1933, was insured against all risks for; 100,200,000 francs and bonne arrivee (total loss) for 70,000,000 francs. If the cost of repairing her was more than .100,200,000 francs, then she was a constructive total loss on the. all-risks policy; and only if she /was avconstructive jtotal loss ;on the_ all-risks policy could there "be » claim on the bonne arrivee."

; Consequently; says tie "Economist/, 1 the real issue between, the owners and thq insurance interests was whether .the costJorT;repairs'.inr elation to the insuied [ value was such as to produce a claim on' l a policy in which the all-risks under[writers were not primarily interested. !It was obvously a close thing between, the cost of repairs and the insured' valuej underwriters . haying received from Harland and Wolff a tender in.' sterling which was.less than 100,200,000 francs when the franc was above 80.70, but more than 100,200,000 francs as soorf as -the. price of the franc fell to 81 or 82. Actually it is probable that th« job could have been done for less than. 100,000,000 francs ■'if ■'Franco remained on gold, but the French Court avoided the, currency problem by deciding that, even if Harland and Wolfe did the work, they would be not repairing but reconstructing. ' ; The distinction between repairing and reconstructing is subtle,' and. has hitherto had no place in the jargon of English marine insurance, so that the Atlantique has provided us with two novelties: (1) A constructive total loss, hinging on the movements of the foreign exchange market, and (2) a tender for repairs rejepted because it i* not really for repairs but for something more drastic. :