Pan-United Shipyard Pte Ltd v India International Insurance Pte Ltd

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 26 January 2000
• Neutral Citation: [2000] SGHC 14
• Court: High Court (Singapore)
• Year: 2000
• Published date: 25 March 2013
• Plaintiff Counsel: Navinder Singh (Joseph Tan Jude Benny)
• Defendant Counsel: Jainil Bhandari (Khattar Wong & Partners)
• Citation: [2000] SGHC 14

JUDGMENT:

GROUNDS OF JUDGMENT

The parties

1 The Plaintiffs are shipbuilders and repairers. Their yard is situated at 33 Tuas Crescent, Singapore. The Defendants are authorised insurers under the Insurance Act (Cap 142).

The background

2 On 22 January 1992, the Plaintiffs entered into a contract with Ranger Shipping Pte Ltd to convert a bulk carrier the Ikopa (‘the Vessel’) to a clean product tanker. The scope of works included and required grit blasting and spray painting.

3 For the purpose of securing protection and indemnity against, inter alia, their liability arising from any accident or occurrence, the Plaintiffs under the advice of their brokers Frank B Hall Insurance Brokers (S) Pte Ltd obtained from the Defendants, a Collective Policy of Insurance (‘the Collective Policy’). The insureds were described as ‘Pan-United Shipyard Pte Ltd and/or Petro Ships Pte Ltd and/or Ranger Shipping Pte Ltd and/or Asian Lift Pte Ltd for their respective rights and interest.’ The relevant clauses are clauses 19 and 10.1. They read:

"19.1 The Underwriters agree to indemnify the Assured for any sum or sums paid by the Assured to any other person or persons by reason of the Assured becoming legally liable, as Owner of the Vessel, for any claim, demand, damages and/or expenses, where such liability is in consequence of any of the following matters or things and arises from an accident or occurrence during the period of this insurance:

[underlining added]

19.1.1 loss of or damage to any fixed or movable object or property or other thing or interest whatsoever, other than the Vessel, arising from any cause whatsoever in so far as such loss or damage is not covered by Clause 17 [clause 17 refers to liability of the Assured arising from collision involving the Vessel]

19.1.2 any attempted or actual raising, removal or destruction of any fixed or movable object or property or other thing, including the wreck of the Vessel, or any neglect or failure to raise, remove, or destroy the same

19.1.3 liability assumed by the Assured under contracts of customary towage for the purpose of entering or leaving port or maneuvering within the port

19.1.4 loss of life, personal injury, illness or payments made for life salvage.

19.2 The Underwriters agree to indemnify the Assured for any of the following arising from an accident or occurrence during the period of this insurance:

19.2.1 the additional cost of fuel, insurance, wages, stores, provisions and port charges reasonably incurred solely for the purpose of landing from the Vessel sick or injured persons or stowaways, refugees, or persons saved at sea

19.2.2 additional expenses brought about by the outbreak of infectious disease on board the Vessel or ashore

19.2.3 fines imposed on the Vessel, on the Assured, or on any Master Officer crew member or agent of the Vessel who is reimbursed by the Assured, for any act or neglect or breach of any statute or regulation relating to the operation of the Vessel, provided that the Underwriters shall not be liable to indemnify the Assured for any fines which result from any act neglect failure or default of the Assured their agents or servants other than Master Officer or crew member

19.2.4 the expenses of the removal of the wreck of the Vessel from any place owned, leased or occupied by the Assured

19.2.5 legal costs incurred by the Assured, or which the Assured may be compelled to pay, in avoiding, minimizing or contesting liability with the prior written consent of the Underwriters.

DEDUCTIBLE

10.1 No claim arising from a peril insured against shall be payable under this insurance unless the aggregate of all such claims arising out of each separate accident or occurrence (including claims under clauses … 19 … exceeds __________ in which case this sum shall be deducted."

This clause is to be read with the schedule which provided:

"Deductible, Clause 10 – S$50,000.00 All claims Each Accident."

4 The conversion work to the Vessel was carried out during the period February 1992 to January 1993. Grit blasting and spray painting were carried out. At the material time, a yacht, the El Corsario was undergoing warranty and docking works at a neighbouring shipyard at No 29, Tuas Crescent, Singapore.

5 In June 1995, the Plaintiffs received a claim from the owners of the El Corsario for damage allegedly caused by the grit blasting and spray painting works carried out by the Plaintiffs on the Vessel.

6 The Plaintiffs referred the claim to the Defendants. On 4 October 1995, the Defendants denied liability principally on the ground that the claim was not being brought against the Plaintiffs as the owner but as the repairer of the Vessel. Consequently the Plaintiffs were not entitled to be indemnified under Clause 19.

7 On 31 August 1996, the owners of El Corsario commenced proceedings in Suit 1627 of 1996 against the Plaintiffs and the neighbouring shipyard Kvaerner Fjellstrand (S) Pte Ltd.

8 As liability to indemnify the Plaintiffs had been denied by the Defendants, the Plaintiffs conducted their own defence through their own solicitors.

9 Pending the hearing of Suit 1627 of 1996, the Plaintiffs on 6 February 1998 filed these proceedings for, inter alia, a declaration that in the event that they were held liable for the claim made by the owners of the El Corsario, they were entitled to be indemnified by the Defendants under clause 19 of the Collective Policy in respect of the said claim including all interest and costs.

10 Eventually, the claim in Suit 1627 of 1996 was settled on 25 August 1998 when, by consent, the claim was...