MERCHANT SHIPPING (AMENDMENT) (NO. 2)
Ord. No. 65/78
A209
(2) No sum shall be payable by an authorized insurer under subsection (1)
(a) in respect of any judgment, unless before or within 7 days after the commencement of the proceedings in which the judgment was given, the authorized insurer had notice of the bringing of the proceedings;
or
(b) in respect of any judgment, so long as execution
thereon is stayed pending an appeal; or
(c) in connexion with any liability, if before the happen- ing of the event which was the cause of the death or bodily injury giving rise to the liability the policy was cancelled by mutual consent or by virtue of any provision contained therein, and either-
(i) before the happening of the said event the policy was surrendered to the authorized insurer, or the person in whose favour the policy was issued made a statutory declaration stating that the policy had been lost or destroyed; or
(ii) after the happening of the said event, but before the expiration of a period of 14 days from the taking effect of the cancellation of the policy, the policy was surrendered to the authorized insurer, or the person in whose favour the policy was issued made such a statutory declaration as aforesaid.
(3) No sum shall be payable by an authorized insurer under this section if, in an action commenced before, or within 3 months after, the commencement of the proceedings in which the judgment was given, he has obtained a declara- tion that, apart from any provision contained in the policy, he is entitled to avoid it on the ground that it was obtained by the non-disclosure of a material fact, or by a representa- tion of fact which was false in some material particular, or, if he has avoided the policy on that ground, that he was entitled so to do apart from any provision contained in it:
Provided that an authorized insurer who has obtained such a declaration as aforesaid in an action shall not thereby become entitled to the benefit of this subsection as respects any judgment obtained in proceedings commenced before the commencement of that action, unless before or within 7 days after the commencement of that action he has given notice thereof to the person who is the plaintiff in the said proceedings specifying the non-disclosure or false representa- tion on which he proposes to rely, and any person to whom notice of such an action is so given shall be entitled, if he thinks fit, to be made a party thereto.
(4) If the amount which an authorized insurer becomes liable under this section to pay in respect of a liability of a person insured by a policy exceeds the amount for which he would, apart from this section, be liable under the policy in respect of that liability, he shall be entitled to recover the excess from that person.
(5) In this section, the expression "material" means of such a nature as to influence the judgment of a prudent insurer in determining whether he will take the risk, and, if so, at what premium and on what conditions; and the expression "liability covered by the terms of the policy"