The failure to comply with the Institute Classification Clause in marine insurance policies results in a fundamental breach, negating coverage for cargo loss.

JUDGMENT

Ong Chee Kwan J:

Introduction

[1] This is an insurance claim by the plaintiff against the defendants under their respective marine open cover policies.

[2] On or around 5 May 2019, the plaintiff's cargo carried onboard the vessel, MV Asian Trader, whilst sailing from Port Klang to Batam, Indonesia, had encountered heavy weather which resulted in the loss and damage to the entire cargo.

[3] Both the defendants rejected the plaintiff's claims, primarily on the grounds that the vessel was not classed with the International Association Classification Society as stipulated in the insurance policies and for breach of the warranty in the policies as the cargo, not being in containers, was carried on deck and also inadequately secured under deck.

[4] After hearing the testimonies of the witnesses and hearing the oral submissions of counsel and perusal of the relevant cause papers, I dismissed the plaintiff's claims with costs.

Background Facts

[5] The plaintiff is an established and well-known manufacturer of food and drink in Malaysia.

[6] The 1st defendant had issued an Open Marine Cargo Policy No BK- 05608893 ("the MSIG Policy") to the plaintiff, subject to the terms and conditions therein. Among the relevant terms applicable were:

(a) The terms and conditions are as per the Marine Open Cover Schedule;

(b) Conditions of cover were subject to inter alia:

(i) Institute Cargo Clauses (A) 1/1/09;

(ii) Institute Classification cl 1/1/01;

(iii) For cargo on deck subject to Institute Cargo Clauses (C) 1/1/09.

[7] The plaintiff also took insurance policy from the 2nd defendant; more specifically:

(a) on 15 February 2019, a Marine Open Cover Policy (hereinafter known as "MPI Policy");

(b) on 2 May 2019, a certificate of Marine Cargo Insurance, MC- 0260247 was issued wherein the plaintiff has been named as the consignor and assured, the subject matter of 570 Pallets of the plaintiff's products, the name of the vessel, Asian Trader together with the voyage number have also been stated in the same (hereinafter known as "Certificate of Marine Cargo Insurance"); and

(c) on 13 May 2019, a Marine Cargo Certificate was issued to Unizen Agency Sdn Bhd (who is the plaintiff's agent which, inter alia, specified the coverage period from 2 May 2019 to 1 August 2019 (hereinafter known as "Marine Cargo Certificate"). The premium invoice in the sum of RM1,443.33 was also attached to the same.

(collectively, the Certificate of Marine Cargo and the Marine Cargo Certificate referred as "MPI Certificates")

[8] The salient terms of the MPI Policy were, inter alia, conveyance by approved vessel not exceeding 30 years and classed as per Institute Classification Clause 1/1/01 (hereinafter known as "ICC 1/1/01") and the classification society as referred to in the ICC 1/1/01 was International Association of Classification Society ("IACS"). As such, the clear wording of the terms and conditions and/ or the preconditions of the MPI Marine Open Cover Policy allowed the usage of vessels classed by IACS only.

[9] For ease of reference, the terms and conditions in ICC/1/1/01 in both the MSIG Policy and the MPI Policy stated as follows:

"QUALIFYING VESSELS

1) . This insurance and the marine transit rates as agreed in the policy or open cover apply only to cargoes and/or interests carried by mechanically self-propelled vessels of steel construction classed with a Classification Society which is:

1.1 a Member or Associate Member of the International Association of Classification Societies (IACS); or

1.2 a National Flag Society as defined in cl 4 below, but only where the vessel is engaged exclusively in the coastal trading of that nation (including trading on an inter-island route within an archipelago of which that nation forms part).

Cargoes and/or interests carried by vessels not classed as above must be notified promptly to underwriters for rates and conditions to be agreed. Should a loss occur prior to such agreement being obtained cover may be provided but only if cover would have bee