Insurance Law

AuthorLEE Kiat Seng LLB (Hons) (National University of Singapore); LLM (Maritime Law) (London); Advocate and Solicitor (Singapore); Adjunct Associate Professor, Faculty of Law, National University of Singapore.
Citation(2008) 9 SAL Ann Rev 354
Date01 December 2008
Published date01 December 2008
Tay Eng Chuan v Ace Insurance Ltd [2008] 4 SLR 95

16.1 The facts in Tay Eng Chuan v Ace Insurance Ltd[2008] 4 SLR 95, a decision of the Court of Appeal, are really quite simple. The appellant had taken out a ‘Double Guarantee Protector Policy’ (the ‘Policy’) from the defendant insurance company. The appellant suffered a number of eye injuries when a wire mesh struck his eye. What was undisputed is that he underwent surgery to remove the lens in his left eye. What was disputed was whether he did in fact suffer a loss of sight in the same eye. The insurer paid for the loss of the lens but refused to pay for the alleged loss of sight.

16.2 The Policy contained a clause which stated that any dispute was to be referred to arbitration within three months (‘Arbitration Clause’), which was made a condition precedent to liability of the insurer by way of a general clause which made the conditions in the Policy conditions precedent to liability (‘Condition Precedent Clause’). In the Policy, there was another clause which provided that the policyholder had to bring an action on the policy prior to the expiration of a period of 60 days after submitting written proof of his claim to the insurer (‘Legal Action Clause’).

16.3 Before the High Court below, there were a number of issues in the striking out action by the insurer:

(a) whether the appellant was entitled to bring a court action despite the failure to initiate arbitration proceedings within three months; and

(b) whether to allow the appellant to recover for both the loss of the lens and the loss of sight would amount to double recovery (since the policy provided that where compensation was payable for the loss of a whole member of the body, a claim could not be made for parts of that member as well).

16.4 The High Court judge agreed with the insurer on both grounds and struck out the claim by the appellant, who then lodged an appeal to the Court of Appeal.

16.5 The Court of Appeal disagreed with the High Court on both grounds.

Right to bring court proceedings

16.6 In so far as the reading together of the Arbitration Clause and the Legal Action Clause was concerned, the Court of Appeal was of the view that the failure of the appellant to initiate arbitration proceedings meant that he lost the right to refer the dispute to arbitration and no more. He could still rely on the Legal Action Clause to bring a legal action notwithstanding his breach of the Arbitration Clause as there were no clear words in the Arbitration Clause or in the Condition Precedent Clause which precluded the bringing of a court action.

16.7 In order for the failure to initiate arbitration to extinguish the right of the appellant to have recourse to the courts, there would...

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