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2025 MarsdenLR 1361
HIGH COURT MALAYA KUALA LUMPUR
KEJORA RESOURCES SDN BHD – Appellant
Versus
CHUBB INSURANCE MALAYSIA BERHAD – Respondent
[Admiralti In Personam No: WA-27NCC-38-08/2022]
The breach of warranty in marine insurance requires strict compliance; however, manufacturer recommendations may not constitute mandatory obligations. Insurers must prove actual breaches to evade liability.
Headnote:(A) Marine Insurance Act 1906 - Warranties - The Plaintiff claimed indemnity for damages to its tug's engine post-repudiation by the Defendant insurer. The Defendant alleged breach of warranty due to failure to maintain the engine as per its manual, asserting the vessel was not adequately manned and had a lack of supervision (Paras 1-24).
(B) The court addressed whether the policy's warranty on proper maintenance was breached. The court found the manufacturer’s recommendations were not mandatory and that the Plaintiff had exercised due diligence in maintaining the vessel, as the engine was not consistently operating near maximum capacity (Paras 66-86).
(C) Jurisprudence surrounding warranties under marine insurance was cited, emphasizing stringent compliance and the automatic discharge of insurer liability upon breach (Paras 40-46).
(D) The court concluded the Defendant failed to prove breach of warranty, permitting the Plaintiff’s claim for indemnity (Paras 106-114).
Result: Claim allowed, indemnity awarded along with costs.
| Table of Content |
|---|
| 1. plaintiff's claim on insurance policy. (Para 1 , 2 , 3 , 4 , 5) |
| 2. summary of claims submission process. (Para 13 , 14 , 15 , 16) |
| 3. defendant's reasons for claim rejection. (Para 17 , 18 , 19 , 20 , 21) |
| 4. cause of explosion linked to engine management. (Para 25 , 26 , 27 , 28 , 29 , 30) |
| 5. warranties in marine insurance and their implications. (Para 39 , 40 , 41 , 42 , 43 , 44) |
| 6. assessment of warranty compliance in insurance. (Para 66 , 67 , 68 , 69 , 70) |
| 7. due diligence and crew management responsibilities. (Para 87 , 88 , 89 , 90 , 91) |
| 8. conclusions on warranty breaches and claims. (Para 106 , 107 , 108 , 109) |
Introduction
[1] This suit is filed by the Plaintiff as the assured against the Defendant following the Defendant's repudiation of the Plaintiff's claim for its loss arising from the damage to the port side main engine onboard the Plaintiff's tug, Kejora Prosper ("the Tug" or "Kejora Prosper") which exploded on 25 May 2019.
[2] The Plaintiff is basing its claims against the Defendant as the insurer under the Chubb Marine Hull Policy No HQ-H0010623-HHM and its Renewal Schedule Policy No HQ-H0010623-HHM-R001 (collectively referred as "the Policy"). The Plaintiff claims that the Defendant has breached the terms of the Policy when it failed and or refused to indemnify the Plaintiff for the claims submitted,
[3] The Defendant, on the other hand, contends that it has no obligation to pay the Plaintiff for its claims under the Policy because the Plaintiff has breached the warranty to "'properly and reasonably maintained, equipped, kept up, officered and manned [the Tug] during the currency of the policy'. More specifically, the Defendant contends that the Plaintiff had breached the aforesaid warranty when it failed to overhaul the port side main engine of Kejora Prosper when it reached the 15,000 running hours mark +/- 20% as stipulated by the manufacturer of the engine.
[4] The Defendant further contends that there was an implied duty to exercise due diligence on the part of the Plaintiff under the said warranty which the Plaintiff had breached as evidenced by the lack of instructions and supervision by the Plaintiff of its crew as well as the poor maintenance of the Tug by the Plaintiff. In particular, the Defendant refers to the fact that there was no proper handover when there was a change of the Chief Engineer of the Tug sometime in May 2019.
[5] The aforesaid lack of due diligence, according to the Defendant is a breach of the warranty which entitles the Defendant to repudiate the Plaintiff's claims under the Policy.
[6] This judgment deals with the significance of a warranty in the contract of marine insurance and the interpretation and scope of the warranty to "properly and reasonably maintained, equipped, kept up, officered and manned [the Tug] during the currency of the policy'.
Background Facts
[7] The Plaintiff is the registered owner of the tugboat Kejora Prosper (IMO: 9501485), sailing under the Malaysian flag.
[8] By the Chubb Marine Hull Policy No HQ-H0010623-HHM, issued on 11 January 2018, the Defendant provided insurance coverage in respect of Hull and Machinery, including perils of the sea, for a period of 12 months commencing on 1 December 2017 ("the Initial Policy").
[9] Upon the expiration of the Initial Policy, on 2 January 2019, the Defendant issued a Renewal Schedule for the policy, Policy No HQ- H0010623-HHM-R001, renewing the coverage for another 12 months, from 1 December 2018 to 30 November 2019 ("the Renewed Policy"). The Renewed Policy provided insurance coverage for Hull and Machinery for the sum of RM12,439,725.20.
[10] On 25 May 2019, the following transpired on board the Tug:-
(a) while the Tug was at West Port Berth 10 assisting to push and hold a container vessel, MV Cape Fawley, the port main engine of the Tug encountered a sudden over-speed;
(b) the Master on board the Tug tried to stop the port main engine of the Tug by pushing the emergency stop button located at th
