Chubb Insurance Singapore Ltd v Sizer Metals Pte Ltd

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean JCA
• Judgment Date: 03 May 2023
• Neutral Citation: [2023] SGHC(A) 17
• Court: High Court Appellate Division (Singapore)
• Docket Number: Civil Appeal No 37 of 2022
• Hearing Date: 10 November 2022,31 October 2022
• Citation: [2023] SGHC(A) 17
• Year: 2023
• Plaintiff Counsel: Goh Phai Cheng SC (Goh Phai Cheng LLC) (instructed), Yee Mun Howe Gerald and Koh Kuan Hong John Paul (Premier Law LLC)
• Defendant Counsel: Vergis S Abraham SC (Providence Law Asia LLC) (instructed), Ramachandran Doraisamy Raghunath, Lee Weiming Andrew and Dumaguing Laurene Yzabel Rowena Adeline Dagalangit (PDLegal LLC)
• Published date: 03 May 2023

Belinda Ang Saw Ean JCA (delivering the judgment of the majority consisting of Aedit Abdullah J and herself):

This appeal arises from the decision of the General Division of the High Court in Sizer Metals Pte Ltd v Chubb Insurance Singapore Ltd [2022] SGHC 51 (the “Judgment”). In HC/S 1248/2019, Sizer Metals Pte Ltd (“Sizer”) successfully sued Chubb Insurance Singapore Ltd (“Chubb”) for the loss of four shipments of tin concentrate in drums (the “Four Shipments”) that were insured with Chubb under a Marine Cargo Open Policy which incorporated standard Institute Cargo Clauses (A) (1/1/1982) (“ICC(A)”) terms. The Judge held that Chubb was liable to indemnify Sizer since the loss of the Four Shipments was due to theft that had occurred during the insured voyage. Dissatisfied with the Judge’s decision, Chubb appealed.

This appeal hinges on the Transit Clause in cl 8.1 of the ICC(A), which stipulates the operative duration of the insurance, ie, when the insurance attaches and when it terminates. Ultimately, the key point at issue is whether the thefts of the Four Shipments occurred during the period of insurance. Chubb contends that the Judge came to the wrong conclusion that Sizer had discharged its burden of proof that the thefts occurred during the period of insurance (ie, the insured voyage). In the court below, the primary question before the Judge was whether the thefts of the Four Shipments occurred prior to or after the cargo insurance in question had come on risk for the duration of the insurance cover. It was undisputed that the thefts were first discovered by the end receiver in Penang, Malaysia (“Penang”), whereupon it was revealed that the drums contained iron oxide (also known as “iron ore”) instead of tin concentrate (also known as “tin cassiterite”). It is common ground that the tin concentrate was replaced with the iron oxide after the drums were sealed in Kigali, Rwanda (“Kigali”). Put differently, the parties do not dispute in this appeal that the subject matter insured under the insurance policy, ie, tin concentrate, did exist at the outset and was filled into the drums.

In our judgment, Sizer prima facie discharged its legal burden of proving that the thefts had occurred during the period of insurance on the basis of undisputed facts and contemporaneous documentation. The evidential burden then shifted to Chubb who had the opportunity to produce evidence either rebutting Sizer’s evidence or supporting Chubb’s counter theory that the theft had occurred in Excellent Mining’s premises (ie, prior to the commencement of the insured voyage). However, in our view, Chubb failed to discharge its evidential burden. Consequently, we conclude that Sizer had discharged its legal burden on the balance of probabilities. We elaborate on our reasons for arriving at this conclusion below. Where relevant, we also make reference to the dissenting judgment of Woo Bih Li JAD (“the Minority Judgment”) and address some of the points raised therein.

Background facts

Sizer is a company incorporated in Singapore that carries on the business of trading base metals. On 16 September 2013, Sizer and Chubb entered into a Marine Cargo Open Insurance Policy No 92359646 (the “Policy”). Pursuant to the Policy, Chubb agreed to insure Sizer’s purchases comprising base metals including tin concentrate against any loss, damage, or expense arising out of their conveyance from Kigali to various inland destinations such as the port at Dar es Salaam, Tanzania (“Dar es Salaam”), and thereafter by sea carriage to overseas destinations such as Penang. The schedule to the Policy incorporated the ICC(A) terms which covers all risks save for express exclusions (see cl 1 of the ICC(A)). For our present purposes, these exclusions are not relevant as Chubb did not raise any express exclusions in defending Sizer’s claims.

Sizer entered into two sale and purchase contracts with Excellent Mining Co Ltd (“Excellent Mining”), a company incorporated in Rwanda, for the purchase of tin concentrate on 15 September 2017 (the “First Contract”) and 30 May 2018 (the “Second Contract”). The First Contract concerned six shipments of tin concentrate. The first five shipments under the First Contact were shipped and received by the end receiver in Penang, the final destination, without incident. However, the last shipment of tin concentrate under the First Contract bearing International Tin Supply Chain Initiative (“ITSCI”) Shipment Number EXC/RW/0000011 for 27 drums of tin concentrate (“the Sixth Shipment”) was discovered after its arrival in Penang on 10 July 2018 to have been replaced with iron oxide.

The Second Contract concerned three shipments of tin concentrate. For ease of identification, the three shipments under the Second Contract are referred hereto as follows: (a) ITSCI Shipment Number EXC/RW/0000013 for 30 drums of tin concentrate (“the Seventh Shipment”); (b) ITSCI Shipment Number EXC/RW/0000015 for 36 drums of tin concentrate (“the Eighth Shipment”); and (c) ITSCI Shipment Number EXC/RW/0000017 for 40 drums of tin concentrate (“the Ninth Shipment”). The Seventh Shipment arrived in Penang on 25 July 2018. The Eighth and Ninth Shipments arrived in Penang on 6 September 2018. It was similarly discovered after delivery to the end receiver in Penang that the contents in the drums of the Seventh to Ninth Shipments had also been substituted and replaced with iron oxide. In short, from the Four Shipments a total of 86.075mt of tin concentrate in 133 drums had been replaced with iron oxide. Pursuant to the Policy, Marine Cargo Insurance Certificates were issued on 25 May 2018, 12 June 2018, 23 June 2018, and 3 July 2018 to signify insurance cover in respect of the Four Shipments.

After the discovery of the thefts of the tin concentrate, Sizer sent notices of claim for the shipments to Chubb on 16 July 2018 for the Sixth Shipment, on 31 July 2018 for the Seventh Shipment, and on 24 September 2018 for the Eighth and Ninth Shipments.

Operational activities, be it in connection with the appropriation of the consignment purchased under the First and Second Contracts or the preparation of the consignments for export, would be accompanied with the relevant documentation tracking each of these activities (see [9(a)]–[9(e)] below). In relation to the Four Shipments, these operations were conducted in Excellent Mining’s premises in Kigali.

In the Judgment (at [8]), the Judge set out the various stages involved in the transporting of the tin concentrate from Excellent Mining to the end receiver, Malaysian Smelting Corp Bhd (“MSC”), in Penang. We adopt the Judge’s list with the addition of other activities that are important to the reasoning behind the majority’s judgment (the “Majority Judgment”): Leading up to each shipment, approximately 20 to 25mt of tin concentrate was procured by Excellent Mining and brought to Excellent Mining’s premises in plastic bags (Judgment at [8(a)]). A representative from Alex Stewart International Rwanda Ltd (“ASIR”) would collect samples of the tin concentrate for analysis. The tin concentrate was then weighed and filled into empty second-hand steel drums in the presence of an ASIR representative. It is undisputed that the drums were filled with tin concentrate through a bunghole at the top of each drum. After the drums were filled, the bungholes were welded to close the openings. Tamper-proof clips (also known as “Precintia clips”) were spot welded on the sealed bungholes. A layer of white alkyd paint was applied to the top of the drums and the ITSCI Shipment Number and/or lot number and the addresses of both Excellent Mining and Sizer were written on the paint coating. A representative from the ITSCI and a Mineral Field Officer (“MFO”) from the Rwanda Mines, Petroleum and Gas Board (“RMB”) were in attendance during this process (Judgment at [8(a)]). The drums were stored at Excellent Mining’s premises pending the results of sampling from ASIR (Judgment at [8(a)]). Three certificates were issued before the drums were transported from Excellent Mining’s premises: The first was the Certificate of Sampling, Weighing and Packing (the “Packing Certificate”) issued by ASIR. The Packing Certificate documented the sampling process, packing of the tin concentrate into the drums, weighing of the drums containing the tin concentrate, and sealing of the drums. The second was the Certificate of Assay (the “Assay Certificate”) issued by ASIR certifying the mineral content of the tin concentrate sampled. The third was the International Conference on the Great Lakes Region (“ICGLR”) certificate which was issued jointly by the RMB and Rwanda Standards Board after the drums were inspected by RMB’s certification officers at Excellent Mining’s premises. Inspection of the drums by RMB’s certification officers would be at Excellent Mining’s premises after issuance of the Packing Certificate and the Assay Certificate. After the Packing Certificate, the Assay Certificate, and the ICGLR certificate were issued, Excellent Mining would have to obtain the certificates of origin and export declaration sheets from the Rwanda Revenue Authority (“RRA”). Before these documents were made available to Excellent Mining, the RRA would have to ensure that: (i) all taxes and dues for the export of the shipments of tin concentrate have been paid; and (ii) the relevant documentation (eg, the Packing Certificate, the Assay Certificate and the ICGLR certificate) were in order. Thereafter, the drums would be ready for transport. The drums would be stuffed into a 40ft container outside of Excellent Mining’s premises in the presence of the ASIR and RMB representatives. At this stage, no sign of tampering or thefts was observed. After stuffing, an ASIR representative would affix temporary seals on the doors of the 40ft container (Judgment at [8(b)]). The 40ft container would be driven on a 45 to 60minute-long...