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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
V.K. Jain, Presiding Member
Ceyaki Shipping Pvt. Ltd. —Complainant
versus
New Indian Assurance Pvt. Co. Ltd. —Opp. Party
Consumer Case No.278 of 2011
Decided on 21.3.2017
Result: Complaint allowed.
Key Points: - The insurer cannot reject a genuine claim merely because the complainant failed to produce original logbooks (!) (!) . - The vessel had valid safety and class certificates, and the insurer was estopped from denying the claim due to prior knowledge of vessel deficiencies (!) (!) . - The surveyor appointed by the insurer verified the damages, and their approval of repair costs must be accepted (!) (!) .
Key Points: - The insurer must prove that the unreported incident caused damage affecting seaworthiness or classification and that reporting was mandatory (!) (!) . - The insurer failed to produce classification society rules requiring such reporting (!) . - The insurer is estopped from denying the claim after issuing the policy with knowledge of the vessel’s deficiencies (!) (!) .
Key Points: - Compensation equals the sum approved by the insurer’s surveyor for repairs, plus a reasonable adjuster fee (!) (!) . - Interest is awarded at 9% per annum, not 18%, due to the nature of the transaction (!) . - The total award is Rupee 1,93,39,965.45 plus interest, to be paid within three months (!) (!) .
V.K. Jain, Presiding Member—The complainant, being owner of a vessel namely MV Comorin Pride, submitted a proposal dated 18.6.2007 to the opposite for insurance of the aforesaid vessel. The complainant got the said vessel inspected through Industrial Maritime Surveyors Ltd. The said inspection / survey was carried out on 03.7.2007 and 04.7.2007 at a Port in Mombasa, Kenya. The report of the surveyor was forwarded by the complainant to the opposite party vide Email dated 12.7.2007, through its broker Athena Insurance & Reinsurance Brokers Pvt. Ltd. The opposite party then issued a Marine Hull Policy, insuring the aforesaid vessel for the period from 13.7.2007 to 12.7.2008 to the extent of US$ 6.4 million. The case of the complainant is that from 15.7.2007 to 17.7.2007, when the aforesaid vessel was on a voyage in Ballast from Dare-E-Salam Tanzania to Cochin to load a cargo she encountered heavy weather, as a result of which the vessel started rolling and pitching heavily due to continuous hitting of long swell on the vessel over the main deck and forecastle deck. On 17.7.2007, an inspection of the vessel was carried out by the crew which noted substantial deck side electrical and steel damages on the forward portion. Despite the aforesaid incident, the vessel completed her voyage, loaded the containers at Cochin and sailed to Jabel Ali in UAE on or about 01.8.2007. When the vessel arrived at Port of Khorfakkan in UAE, Master of the Vessel issued a Marine Note Protest, it was inspected by the surveyor appointed by the opposite party, namely BMT Marine & Offshore Surveyors at Jabel Ali. The surveyors issued a preliminary report referring to the damages found by them on the vessel. The aforesaid preliminary report dated 08.8.2007 was forwarded to the opposite party on 11.8.2007. After completing the discharge at Jabel Ali, the vessel proceeded to Mina Saqr Port where berth was not available from 16.8.2007 onwards and therefore, it sailed to Sharjah for completing the repair work. The repair work was carried out at the cost of US $ 4,13,948.85. The final report of the surveyor dated 16.1.2008 was forwarded to the opposite party. The opposite party thereafter, advised the complainant to appoint an Average Adjuster to determine the amount payable under the policy. The opposite party also received the Class Maintenance Certificate and International Safety Management Certificate, in terms of the request made by it. The complainant appointed J.B. Boda & Co. Pvt. Ltd., as the Average Adjuster who approved a sum of US $ 4,10,181.03 as the amount payable by the opposite party. Subsequently, the aforesaid Adjuster also raised a bill of US $ 19,596/- towards their fee which was paid by the complainant.
2. The claim was rejected vide letter dated 15.4.2010, which to the extent it is relevant, reads as under:—
“1) The Certificate of Class and Certificate of Registry do not bear the name of the owner referred on the insurance policy viz. M/s. Ceyline Shipping (P) Ltd. These documents stand in favour of M/s. Ceyaki Shipping Pvt. Ltd.
As per Hull Classification clause (forming part of Policy), condition 1.4 warrants that all statutory or regulatory requirements whether arising before or during the period covered by this insurance shall be complied with insofar as they relate to the seaworthiness of the vessel. Therefore, not holding the registration certificate and certificate of class in favour of the insured mentioned in the policy M/s. Ceyline Shipping Pvt. Ltd., stands non-fulfilment of statutory regulations, thus resulting in breach of policy conditions.
Also the subject policy is having a condition of International Safety Management Code, which necessitates the owner/manager to hold valid documents of compliance as to International Safety Management Code under the solas convention 1974 as amended and also the vessel covered by the insurance policy to hold a valid safety Management Certificate issue by appropriate authorities. In th
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