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Manifest Shipping v Uni-Polaris Insurance Co.Ltd

Star Sea was owned by Captain Kollakis and his two sons, the Kollakis brothers. The same people owned a shipping fleet of 30 vessels, which included two other ships called Centaurus and Kastora. All three ships were managed by Kappa Ltd, of which the directors were Captain Kollakis, his two sons and Mr. Nicholaidis, the technical director. Both Centaurus and Kastora were lost by fire. A report was prepared by an expert regarding the Kastora fire, whereby it was stated that the engine room was not properly sealed, because the dampers on board Kastora were ineffective. That prevented the fire extinguishing system from working and thus, the fire spread. Subsequently, a fire broker out on board Star Sea which rendered the vessel a contructive total loss and the dampers were again found to be defective. The report about the Kastora fire had not been shown to the insurers, because it had been mislaid by solicitors and did not appear until after the beginning of the trial. Thus, the Kollakis brothers did not see the report until the trial. When the assured sought to claim under the policy , the insurers alleged breach of utmost good faith for the failure to disclose the contents of the said report and fraud.

The court ruled in favour of the assured, in that they were innocent and did not act in breach of the duty of utmost good faith.