By: Albors Galiano Portales
The Supreme Court, Civil Chamber, sitting in Plenary Session, has issued Judgment No. 1130/2026, resolving a highly significant dispute in the field of marine hull insurance, in which our firm represented the interests of the vessel’s insurers.
The tuna fishing vessel TXORI URDIN sank on 25 September 2015 as a result of an ingress of water of unknown origin, with its shipowner—insured under the policy—claiming more than €8.5 million from the insurers under the hull and machinery insurance policy. The Judgment of Commercial Court No. 1 of A Coruña of 31 July 2019 dismissed the claim in its entirety, finding the “principle of universality of risk” inapplicable and concluding, in light of the evidence produced at trial, that the vessel had not sunk as a result of a risk covered under the policy. The 4th Section of the Provincial Court of A Coruña issued a Judgment of 30 July 2021 upholding the insured shipowner’s appeal and granting the claim in full, ordering the insurers to pay the insured value of the vessel. The insurers filed an extraordinary appeal for procedural infringement and a cassation appeal against the Judgment of the Provincial Court of A Coruña.
The Plenary Session of the Civil Chamber of the Supreme Court upholds the extraordinary appeal brought by the insurers, sets aside the Judgment of the Provincial Court of A Coruña and, assuming the role of the lower court, confirms the dismissal of the claim, ordering the insured to bear the costs of the appeal. In setting aside the Provincial Court’s Judgment, the Supreme Court holds that it had made an illogical and arbitrary assessment of the expert evidence. As regards the fundamental legal question in dispute, the Supreme Court establishes that where a policy incorporates named-risk clauses—such as the “Institute Fishing Vessel Clauses”—the traditional “principle of universality of risk” does not apply, since the insured risks are defined by express agreement between the parties. Consequently, the insured shipowner was required to prove that the loss corresponded to one of the risks expressly covered under the policy, and it failed to do so.
The Judgment is particularly significant as the first occasion on which the Supreme Court has ruled on the validity of the principle of universality of risk following the entry into force of the Maritime Navigation Act. It does so by decision of the Plenary Session of the Civil Chamber, making clear that freedom of contract between the parties prevails over that traditional principle. This is a highly anticipated judgment in the Spanish insurance market and of considerable practical importance, given the customary submission of vessel insurance contracts to the English conditions of the Institute of Underwriters.