PT Adidaya Energy Mandiri v MS First Capital Insurance Ltd
Court | International Commercial Court (Singapore) |
Judge | Jeremy Lionel Cooke IJ |
Judgment Date | 31 August 2022 |
Neutral Citation | [2022] SGHC(I) 14 |
Citation | [2022] SGHC(I) 14 |
Docket Number | Suit No 6 of 2021 |
Hearing Date | 04 May 2022,05 May 2022,06 May 2022,09 May 2022,10 May 2022,12 May 2022,13 May 2022,17 May 2022,18 May 2022,23 May 2022 |
Plaintiff Counsel | Bazul Ashhab bin Abdul Kader, Prakaash s/o Paniar Silvam and Nurulhuda Atiqah Binte Sawal (Oon & Bazul LLP) |
Defendant Counsel | Bhandari Jainil, Aleksandar Anatoliev Georgiev, Kristin Ng Wei Ting and Nathaniel Loh (Rajah & Tann Singapore LLP) |
Subject Matter | Insurance,Marine Insurance,Contract,Contractual terms,Evidence,Admissibility of evidence,Hearsay |
Published date | 03 September 2022 |
The plaintiff claims from its insurer, the defendant, the sum of US$4,700,000 as the insured value (“the Insured Value”) of a Single Point Mooring Buoy “Banner Hex SPM Hex 06” (“the SPM”) as a constructive total loss (“CTL”) as a result of damage which occurred in collisions with the storage vessel attached to the SPM. It also claims the sum of US$2,165,528.71 as Sue and Labour charges (“S & L”) for expense incurred for the purpose of averting a CTL. The defendant denies liability on a number of different grounds. It denies that the SPM was a CTL, contending:
It was common ground between the parties that the following damage was found to the SPM, for which there were many photographs, but the experts did not agree that all had been caused by the collisions:
Due to the side shell fractures, the Compartments were flooded and in such condition, the relevant experts agreed that the SPM was at risk of sinking. Furthermore, the loss of buoyancy and entrained water inside the Compartments adversely affected the stability of the SPM.
The major issue in relation to the dispute as to CTL centred on the question whether or not it was reasonable or necessary for the SPM’s skirting to be renewed which involved either the SPM being transported to a yard for work to be done, or heavy lift equipment to be utilised to take the SPM out of the water for such repairs/renewal to be effected. The cost of transporting the SPM or lifting it out of the water was substantial and made all the difference to the scale of expenditure in the context of the Insured Value of the SPM.
The plaintiff claimed four categories of S & L, as follows:
A number of subsidiary issues arose on the pleadings which were either abandoned or not strenuously argued at trial. The defendant originally contended that the insurance did not cover CTL but only actual total loss. That defence was not pursued in its written opening submissions and was abandoned on the first day of the hearing. The plaintiff contended that its broker (“LCH”), in the person of Mr Ng Choon Kiat (“Mr Ng”), was the agent of the insurer and that the terms of the insurance were to be found in the LCH Cover Note dated 16 April 2018 (“the Cover Note”) alone. It also sought rectification of the policy, which was issued on 26 October 2018 (“the Policy”), some three months or more after the incidents in which the damage to the SPM occurred. Mr Peter Arista Pramana (“Mr Pramana”), a major shareholder of the plaintiff who dealt with LCH, agreed in his evidence that LCH had negotiated the terms of the insurance for the plaintiff with the defendant, thus effectively accepting that LCH was the agent of the plaintiff and that the terms of the Policy were binding on it. It was never clear, in any event how these arguments could advance the plaintiff’s position since the Cover Note of 16 April 2018 specifically stated: “As per Machinery & Equipment All Risks Policy (Marine & Subsea Equipment Policy Wordings)”, thereby incorporating the very warranties found in the Policy which were said to be breached and also the Claims Notification Clause relied on by the defendant.
The agreement to insureAs the evidence emerged, there was no basis available to the plaintiff upon which to pursue a claim for rectification of the Policy. In addition to the evidence of Mr Pramana, the documents also made it plain that the broker, in accordance with conventional practice, acted as agent of the insured plaintiff in negotiating the terms of the insurance with the underwriter, Mr Ramaswamy Athappan (“Mr Athappan” or “the Underwriter”), and secured his subscription to Slip No HMH 180152/001 dated 14 April 2018 (“the Slip”), upon which the Cover Note was based. There was no material difference between the terms of the Slip and the Cover Note and the dispute as to where the terms of the insurance were to be found was therefore arid. It is nonetheless clear, on the documents and the evidence of both the broker and the underwriter, that the terms of the insurance were originally to be found in the Slip dated 14 April 2018 which expressly incorporated the Machinery & Equipment All Risks Policy (Marine & Subsea Equipment Policy Wordings), which was then superseded by the Policy issued on 26 October 2018 which properly reflected those terms.
There is no room for any suggestion that the Policy should be rectified to delete reference to cll 1, 2, 3 and 5–10 of the Warranties on the basis that they were inapplicable to the intended cover. The suggestion that was made by the plaintiff that there was a common intention to insure the SPM, that the plaintiff erroneously believed that the Policy gave effect to that intention, that the defendant knew that this was not the case by reason of the existence of these Warranties and failed to bring that to the attention of Mr Ng was not, and cannot be, supported on the evidence. There is no evidence of any mistake as to the terms of cover agreed between the professional broker and underwriter and Mr Ng’s witness statement does not even hint at the existence of any such mistake, whilst Mr Athappan’s evidence is that no mistake was made in the terms of the wording which was agreed between him and Mr Ng at a series of meetings. It cannot be said that there was anything remotely akin to unconscionable conduct on Mr Athappan’s part which would justify the grant of the equitable remedy of rectification in the course of a standard negotiation of terms between a broker and underwriter.
Mr Ng produced a draft Slip to the Underwriter, which he, Mr Ng, had drafted with a Precedent Policy Schedule consisting of an earlier version of the Marine and Subsea Equipment Policy wording, which he had obtained from other LCH placings and which was materially the same as that which was ultimately incorporated in the signed Slip and upon which LCH had previously placed risks with the Underwriter. He then negotiated the terms of the cover in the usual way between broker and underwriter. Mr Ng produced further slips based upon his discussions with Mr Athappan, which he drafted and which Mr Athappan altered and initialled which led to the final form of the Slip produced by Mr Ng to which the defendant subscribed. Mr Athappan did not know of any mistake made in the terms of the policy, which, because it was designed to cover various types of equipment, would necessarily be likely to include some terms which would apply to some types of machinery or sub-sea equipment but not to others.
It is clear that the parties, in the persons of Mr Ng and Mr Athappan, intended to, and did, embody their entire agreement in the written contract documents, namely the slip and incorporated terms, and then in the Policy which reflected those terms. The terms of the Machinery & Equipment All Risks Policy (Marine & Subsea Equipment Policy Wordings) were known to both of them and were the basis upon which the insurance was placed by LCH with the Underwriter. There was nothing “hidden” or covert about any of the terms which were first advanced by Mr Ng when seeking cover from Mr Athappan and there is no basis for any argument that any of them was not effectively incorporated into the Policy. Any reliance on the decision in
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