The court affirmed the validity of the insurance policy and the seaworthiness of the vessel, ruling that the plaintiff was entitled to recover damages due to unjustified repudiation of the claim by the defendants.

JUDGMENT :

(R. Sakthivel, J.)

(PRAYER: Original Side Appeal filed under Section 13 of Commercial Courts Act, 2015 read with Clause 15 of the Letters Patent, praying to set aside the judgment and decree passed in C.S.No.399 of 2017 dated 27.06.2023 and thereby dismiss the Suit in C.S.No.399 of 2017 with costs.)

Assailing the judgment and decree dated June 27, 2023 passed by the learned Single Judge of this Court in C.S.No.399 of 2017, the appellants / defendants have preferred this Original Side Appeal under Section 13 of Commercial Courts Act, 2015 read with Clause 15 of the Letters Patent, praying to set aside the judgment and decree.

2. For the sake of convenience, the parties will be referred to as per their array in the suit.

Case of the plaintiff:

3.Plaintiff, a reputed commodity trading company, entered into two contracts for purchase of Dried Raw Cashew Nuts in shell (Fresh Crop 2014) from ‘M/s.SNK General Trading LLC, Dubai and SNK General Trading Pte. Ltd, Singapore’ (henceforth collectively referred to as ‘sellers’). The sellers agreed to sell 3500 Metric Tonnes (M.T.) +/- 10% of the Cashew Nuts which were to be shipped from Port Guinea Bissau to Port Tuticorin in the vessel ‘MV Golden Endurance’ (henceforth ‘subject vessel’ for convenience and clarity) chartered by the seller through ‘M/s. St. John Logistics LLC, Dubai’ (henceforth ‘Charterer’). Apart from the plaintiff’s cargo, cargoes containing cashew nuts from a few other sellers were also to be loaded on the same vessel (subject vessel).

3.1.Upon the instance of the sellers, essential credentials of the subject vessel were made available to the plaintiff by the charterer vide Emails dated June 26, 2014 (Ex-P.5).

3.2.Since both contracts were on Cost and Freight basis (C&F contract), the plaintiff had to procure an insurance to save their own interest in the cargo. Accordingly, the plaintiff approached the Insurance Broker, who in turn approached the second defendant on June 26, 2014 along with all the essential certificates and credentials of the subject vessel, proposing to avail an “all risks” cover on warehouse-to-warehouse terms for the plaintiff’s cargo, which was to be loaded into the subject vessel. There were discussions and the plaintiff had furnished all the relevant information regarding cargo, vessel and the voyage, before the loading commenced at Port Bissau on June 29, 2014. Upon the defendants’ approval of the vessel and acceptance of the insurance proposal, the plaintiff paid a premium of Rs.2,22,474/- on July 2, 2014 through cheque. Then the defendants issued the voyage policy dated July 3, 2014 covering the plaintiff’s cargo of all risks on warehouse-to-warehouse terms subject to ‘Institute Cargo Clauses (A)’ [henceforth ‘ICC (A)’] and ‘Institute Theft, pilferage and Non-delivery Clause’. The entire plaintiff’s cargo was insured for 33 Crores, having been valued at their C&F Value + 10% towards their incidentals.

3.3.While so, loading of cargo as per the contract began on June 29, 2014. Plaintiff’s cargo was packed in 41472 bags each containing approximately 80Kg of Cashew Nuts. When the subject vessel reached its draught limit, it sailed on its own power and reached a deeper berth on July 17, 2014, which shows that the subject vessel was seaworthy. Loading of 3350.069 M.T. of plaintiff’s cargo and 1857.854 M.T. of other buyers’ cargo was completed on July 19, 2014. Upon completion of loading, the Master of the subject vessel issued 37 Nos. of Bills of Lading on July 20, 2014.

3.4.Right before her voyage on July 20, 2014, the subject vessel encountered a problem with her engine and the voyage was abandoned. The non-negotiable copies of Bills of Lading were sent by the plaintiff to the Insurance Broker on July 26, 2014, who in turn forwarded the same to the 2nd defendant. After due incorporation of the Bills of Lading numbers and the dates, the 2nd defendant released the policy document on August 7, 2014.

3.5.The plaintiff, on receiving communication f