The court held that seawater damage to steel bars was not excluded by the ROD Exclusion Clause in a marine cargo insurance policy, confirming insurer's liability under an all-risk coverage.

Introduction

[1] This is a claim by the Plaintiff under a marine All-Risks cargo insurance policy number KK-87495196-MAR (the marine Policy) for the damage sustained by the insured cargo comprising of 305 Bundles of 12m steel bars (Type T16, T20, T25 and T32) Commercial Invoice No 4070000114 weighing 637.70 MT amounting to RM963,520.01.

[2] The 1st Defendant (insurer) and 2nd Defendant (insurance agent) disputed the Plaintiff's claim mainly on the ground that the liability for the loss and damage to the insured cargo was excluded by the ROD Exclusion Clause which excludes the risks of rusting, oxidation and discolouration howsoever caused. The 1st Defendant also made a claim against the 5th Defendant for indemnity and contribution in the event that the 1st Defendant is found liable for the Plaintiff's claim. The 2nd Defendant denied making any misrepresentation to the Plaintiff that had caused the Plaintiff to purchase the marine Policy.

[3] The Plaintiff made an alternative claim against the 5th Defendant (carrier/shipowner of MV Bandar Baru) for the loss and damage to the said cargo under the terms of the contract of carriage contained in a Bill of Lading No PKGBKI02 dated 2 August 2018. The 5th Defendant disputed the Plaintiff's claim mainly on the ground that the 5th Defendant is not liable for the damage caused by perils of the sea pursuant to art 4, r 2(c) of the Hague Rules.

[4] The action against the 3rd, 4th and 6th Defendants was struck out under O 18 r 19 ROC 2012 by this Court and there was no appeal by the Plaintiff against the orders for striking out.

The Trial

[5] This Court sat for trial on 11 October 2022, 12 October 2022, 17 November 2022, 29 November 2022, 9 December 2022, 13 February 2023, 14 February 2023, 15 February 2023, 16 February 2023, 16 March 2023, 17 March 2023, 27 March 2023, 17 April 2023, 18 April 2023, 19 April 2023, 13 June 2023, 14 June 2023, 15 June 2023, 16 June 2023, 14 July 2023, 4 August 2023, 11 August 2023, 11 September 2023, 12 September 2023, 9 October 2023, and 10 October 2023 where the following witnesses gave testimonial evidence:

1. For the Plaintiff:

(i) Mr Pang Chiew Fam ("PW1"), the Manager of Ramah Kaya Construction Sdn Bhd ("Ramah Kaya");

(ii) Mr Low Ing Ching ("PW2"), the Plaintiff's Warehouse Supervisor;

(iii) Mr Auther Almeer Alias ("PW3"), the ex-forwarding agent of TS Top Logistics Sdn Bhd ("TS Top");

(iv) Ms Chong Pei Nie @ Irene Chong ("PW4"), the Director of Multihope Enterprise Sdn Bhd ("Muitihope");

(v) Mr Jelin Bin Jamua ("PW5"), the ex-cargo handler of Syarikat Gaya Transport ("Gaya Transport");

(vi) Mr Victor Wong Kiun Wee ("PW6"), the Plaintiff's Senior Manager;

(vii) Mr Kurniawan Bin Pungut ("PW7"), the Assistant Manager of Construction Industry Development Board ("CIDB");

(viii) Mr Shaieran Bin Sukar ("PW8"), CIDB's Assistant Manager;

(ix) Ms Tan Pei Yong ("PW9"), Chemist of Biochem Laboratories Sdn Bhd ("Bioche