Yeo Hiap Seng (Malaysia) Sdn Bhd 1. ) MSIG Insurance (Malaysia) Bhd 2. ) MPI Generali Insurans berhad

WA-27NCC-17-04/2022 Kand. 93 06/05/2024 10:51:02 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY, MALAYSIA (COMMERCIAL DIVISION) SUIT NO.: WA-27NCC-17-04/2022 BETWEEN YEO HIAP SENG (MALAYSIA) SDN BHD (Company No.: 195901000058(3405-X)) … PLAINTIFF AND 1. MSIG INSURANCE (MALAYSIA) BHD (Company No.: 46983-W) 2. MPI GENERALI INSURANS BERHAD (Company No.: 197301001061 (14730-X)) …DEFENDANTS JUDGMENT Introduction [1] This is an insurance claim by the Plaintiff against the Defendants under their respective marine open cover policies. [2] On or around 5.5.2019, the Plaintiff’s cargo carried onboard the vessel, M. V. 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. S/N hVNcQPi1U06wfUTKhxuVMA 1 **Note : Serial number will be used to verify the originality of this document via eFILING portal [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, were carried on deck and also was 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 Clause 1/1/01; (iii) For cargo on deck subject to Institute Cargo Clauses (C) 1/1/09. S/N hVNcQPi1U06wfUTKhxuVMA 2 **Note : Serial number will be used to verify the originality of this document via eFILING portal [7] The Plaintiff also took insurance policy from the 2nd Defendant. More specifically: (a) on 15.2.2019, a Marine Open Cover Policy (hereinafter known as “MPI Policy”); (b) on 2.5.2019, 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 13.5.2019, 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 2.5.2019 to 1.8.2019 (hereinafter known as “Marine Cargo Certificate”). The premium invoice in the sum of RM 1,443.33 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 Classification Society (“IACS”). As such, the clear wording of the terms and conditions and/or the S/N hVNcQPi1U06wfUTKhxuVMA 3 **Note : Serial number will be used to verify the originality of this document via eFILING portal 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 following: “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 Clause 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 been available at a reasonable commercial market rate on reasonable commercial market terms. AGE LIMITATION 2). Cargoes and/or interests carried by Qualifying Vessels (as defined above) which exceed the following age limits will be insured on the policy or open cover conditions subject to an additional premium to be agreed. Bulk or combination carriers over 10 years of age or Other vessels over 15 years of age unless they: S/N hVNcQPi1U06wfUTKhxuVMA 4 **Note : Serial number will be used to verify the originality of this document via eFILING portal 2.1 have been used for the carriage of general cargo on an established and regular pattern of trading between a range of specified ports, and do not exceed 25 years of age, or 2.2 were constructed as containerships. vehicle carriers or double-skin open hatch gantry crane vessels (OHGCs) and have been continuously used as such on an established and regular pattern of trading between a range of specified ports, and do not exceed 30 years of age. CRAFT CLAUSE 3). The requirements of this Clause do not apply to any craft used to load or unload the vessel within the port area. NATIONAL FLAG SOCIETY 4). A National Flag Society is a Classification Society which is domiciled in the same country as the owner of the vessel in question which must also operate under the flag of that country. PROMPT NOTICE 5). Where this insurance requires the assured to give prompt notice to the Underwriters, the right to cover is dependent upon compliance with that obligation. LAW AND PRACTICE 6). This insurance is subject to English law and practice.” [10] According to the Bill of Lading No. PKG/BTM-01 (“the B/L”), the Plaintiff’s cargo that is the subject matter of this claim was loaded on the vessel MV “Asian Trader” V.1904 (“the Vessel”) on 30.4.2019. There were in total 570 pallets comprising: S/N hVNcQPi1U06wfUTKhxuVMA 5 **Note : Serial number will be used to verify the originality of this document via eFILING portal (a) 40,700 Cartons of Yeos Grass Jelly; and (b) 22,840 Cartons of CD Yeos Soy Bean Milk. (“the Cargo”) [11] Of the 570 pallets loaded: (i) 479 pallets of Cargo were loaded in the cargo hold (“the Under Deck Cargo”); (ii) The remaining 91 pallets were loaded on deck/hatch covers covered with tarpaulin and lashed with lashing wires (“the Deck Cargo”). [12] The Vessel was to carry the Cargo from Port Klang to Batam. [13] On 5.5.2019, the Vessel encountered heavy weather (wind force 6/7, heavy seas and high swell of 4-5m) while passing Pulau Pisang Island, Pontian, Johor, off the coast of Malaysia. [14] Based on the report by the 1st Defendant’s surveyor, during the aforesaid heavy weather, the Under Deck Cargo stowage collapsed, the Under Deck Cargo shifted and the Vessel developed a 20- degree list to starboard. [15] The Master anchored the Vessel and initial attempts were made to right the Vessel, and the crew attempted to move some of the Deck Cargo. In the process some Deck Cargo fell overboard when lashings were released to enable Deck Cargo to be moved. The list increased to 35 degrees. The Master requested assistance. S/N hVNcQPi1U06wfUTKhxuVMA 6 **Note : Serial number will be used to verify the originality of this document via eFILING portal [16] On 6.5.2019, the Master and crew were taken on board an attending tug, abandoning the Vessel. [17] On 15.5.2019 the Master and crew returned to the Vessel which was still listing. The Under Deck Cargo and Deck Cargo were found to have been pilfered. [18] The Vessel was righted on 20.5.2019. [19] On 22.7.2019 the Master was instructed to move the Vessel to Kukup anchorage by the Malaysian Maritime Enforcement Agency, and received clearance to sail on to Batam on 1.8.2019. [20] Eventually the Vessel reached Batam on 5.8.2019 and the survey was carried out on 6.8.2019 and 7.8.2019 by PT Binaga Ocean Surveyor (“BOS”). They produced their survey report dated 8.8.2019 (“BOS Report”), [21] The BOS surveyor found that there was no sign of any cargo stowed on deck. Some cargo had fallen overboard. In the holds, none of the Under Deck Cargo remained on pallets and the Under Deck Cargo was found loose and scattered throughout the hold, with pallets stacked to the port side and loose cargo scattered towards the starboard side. The Under Deck Cargo remaining was dented and or punctured with contents leaking and unfit for human consumption. It was concluded that the entire Cargo had been ransacked by unauthorised persons who boarded the Vessel after it was abandoned in Pontian waters on 6.5.2019. S/N hVNcQPi1U06wfUTKhxuVMA 7 **Note : Serial number will be used to verify the originality of this document via eFILING portal [22] The Plaintiff submitted its claims to both the 1st Defendant and the 2nd Defendant under their respective policies. Both the Defendants rejected the claims. Court’s Deliberations [23] Both the 1st Defendant and the 2nd Defendant denied that they are liable to the Plaintiff under their respective policies. Their denials of the Plaintiff’s claims are based on the same grounds. [24] Firstly, it was contended that the Vessel was not a “qualifying vessel” under the policies in accordance with the Institute Classification Clause 1/1/01 above. [25] Upon notification of the claim under the MSIG Policy by the Plaintiff, the 1st Defendant appointed Maphilindo-Insight Sdn Bhd (“MISB”) who are Lloyd’s Agents to investigate the Plaintiff’s claim and their search with the Vessel’s documents showed that: (a) The Vessel is registered in Mongolia and its port of registry is Ulaanbaatar according to the Seaworthiness Certificate issued by the Mongolia Ship Registry (“MSR”). The MSR is actually a company registered in the Singapore as Mongolia Ship Registry Pte Ltd; (b) The Vessel is classed by SingClass International Pte Ltd and it is clear that: S/N hVNcQPi1U06wfUTKhxuVMA 8 **Note : Serial number will be used to verify the originality of this document via eFILING portal (i) SingClass is not a member or associate member of the International Association of Classification Societies (IACS) and appears to be a commercial organisation offering all manner of marine surveying services on a commercial basis; and (ii) The documents state that SingClass is issuing certificates under the authority of the MSR and it is referred to on the MSR website. [26] In light of the above facts, the 1st Defendant contended that the Plaintiff was in clear breach of the Institute Classification Clause 1/1/01 and by reason thereof, the Plaintiff had no right to cover under the MSIG Policy because the Vessel is not a "qualifying vessel" within Clause 1 of the Institute Classification Clause 1/1/01 and thus fell outside the scope of the contract of insurance. Hence, there was no insurance coverage under the MSIG Policy for all cargo carried on board the said Vessel at all material times. This, of course, also applies to the MPI Policy. [27] In an open cover, insurance will only attach if the risk accepted and declared by the assured falls within the terms of the open cover. In the instant case, it is clear from the Institute Classification Clause that cover will only attach if the Vessel carrying the Cargo is classed with a Classification Society which is a member or associate member of the IACS. S/N hVNcQPi1U06wfUTKhxuVMA 9 **Note : Serial number will be used to verify the originality of this document via eFILING portal [28] The historical significance of this is explained in Bennett, The Law of Marine Insurance (2nd Ed) paras 19.71 to 19.73: “Marine insurance pre-dates the advent of international maritime standards for the condition and operation of vessels, and marine insurers rapidly realized both the need to expert and objective inspection of vessels. Classification societies evolved to meet this need. A shipowner will enter its vessel with a classification society to have the society perform a variety of surveys and inspections of the hull and equipment. The leading classification societies are members of the International Association of Classification Societies (IACS), which promulgates new technical specifications for vessels and oversees members’ internal quality management systems and compliance with a code of ethics. Certification that a vessel is classed by certain classification societies, especially IACS members, will be used by a shipowner as evidence of the good condition of its vessel when seeking insurance cover. In addition, international conventions that impose obligations on flag states requiring a variety of surveys and inspections of vessels permit the national authorities of such states to delegate the carrying out of such surveys and inspections to ‘recognised organizations’. …Consequently, it is classification societies that carry out the vast quantity of survey and inspection work required under international maritime law. The 1995 Institute hull and freight clauses and the International hull clauses seek to reinforce the work of the International Maritime Organization and IACS, while at the same time providing additional protection for underwriters by including new and enhanced provisions relating to classification.” S/N hVNcQPi1U06wfUTKhxuVMA 10 **Note : Serial number will be used to verify the originality of this document via eFILING portal [29] The Institute Classification Clause which is incorporated in a marine cargo open cover contract means that the Plaintiff as the insured has to comply with the said clause. [See: Arnould's Law of Marine Insurance and Average (19th Ed., 2018), paragraph 9-17]: "Whatever the nature of the open cover, insurance will only attach if the risk accepted and declared by the assured falls within the terms of the open cover. If the cargo is not of the correct description, or the vessel does not meet the requirements laid down by the insurers, the risk will not attach. Many open covers on goods incorporate the Institute Classification Clause 2001.” [30] Arnould further states at paragraph 19-66: "It is common practice when cargoes are insured pursuant to open cover arrangements for the open cover contract to incorporate the Clause named the Institute Classification Clause which imposes restrictions with regard to the classification and age of vessels. Under this clause, cover is only afforded in respect of cargo declared for shipment on a vessel which is not entered in a qualifying Classification Society subject to prompt notice being given for rates and conditions to be agreed. The current version of the Clause specifies that: '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 been available at a reasonable commercial market rate and on reasonable commercial market terms.' S/N hVNcQPi1U06wfUTKhxuVMA 11 **Note : Serial number will be used to verify the originality of this document via eFILING portal The practical effect is similar to that of imposing a classification warranty in respect of the individual declaration subject to a “held covered” proviso, achieved by a different route. " [31] From the facts of this case, it is very clear that the Vessel carrying the Cargo was not classed by IACS. This is based on the following evidence: (a) Maphilindo-Insight Sdn Bhd’s report dated 21.10.2019; (b) The testimony of Capt Rosdi bin Ahmad (DW1); (c) The testimony of Capt Chan Ying Wai (DW2); (d) The admission by Chan Moon Hong (PW1) during cross examination and also the letter from the Plaintiff to the 2nd Defendant dated 18.8.2021 which clearly states: “They provided you the SingClass International classification that shows the classification of the Vessel, that it was not by a national flag society or the International Association of Classification Societies (IACS).” [32] The Plaintiff has not produced any evidence to rebut the fact that the Vessel is not classed by IACS, and they have in fact admitted that it is not. The relevant extract from the notes of proceedings is reproduced below: “SOFIAN Ms. Tham, would you agree with me, the reason the Plaintiff policy was stipulated by the 2nd Defendant because the ship was not classified under IACS, do you agree? PW2 Sorry, can you repeat your question again? S/N hVNcQPi1U06wfUTKhxuVMA 12 **Note : Serial number will be used to verify the originality of this document via eFILING portal SOFIAN Would you agree with me, the basis… one of the basis why 2nd Defendant rejected the Plaintiff’s policy is because the ship MV Asian was not classified under IACS, do you agree? PW2 As per the document, agree. SOFIAN Do you agree with me, that Asian Trader was classified as a SingClass ship, do you agree with me? PW2 Yes.” [33] In the Singapore case of Everbright Commercial Enterprises Pte Ltd v. AXA Insurance Singapore Pte Ltd [2001] 2 SLR 316, the trial judge dismissed the insured’s claim. The learned judge held inter alia that the cover note B03019 insured cargo shipped on board an ‘approved vessel’ and that an ‘approved vessel’ was one which fell within the parameters of the ICC. The ‘Sirena I’ did not possess the necessary classifications listed in the ICC and neither could it fall within the held covered clause in the ICC as it was a chartered vessel and already fell within the scope of the second paragraph of the ICC which dealt with chartered vessels. Consequently, the ‘Sirena I’ was not an ‘approved vessel’ and there was no contract of insurance between Everbright and AXA. The insured appealed to the Singapore Court of Appeal who dismissed their appeal. It was held by LP Thean JA as follows: “[28] Bearing in mind the nature of an open cover insurance and the function of the ICC which is part of the cover note, we think that where a vessel is declared by Everbright to AXA which complies with the terms and conditions of the cover note, AXA are obliged to accept it for the purpose of the insurance and such a vessel is an ‘approved vessel’. In our opinion, an ‘approved vessel’ is one which falls within the parameters of the ICC. In this S/N hVNcQPi1U06wfUTKhxuVMA 13 **Note : Serial number will be used to verify the originality of this document via eFILING portal regard, a vessel falls within the parameters of the ICC in one of two ways, namely: (i) where the vessel possesses one of the classifications listed in the ICC and is within the age limitation stated there, and (ii) where the vessel does not possess any of such classifications and/or is not within the age limitation, but falls within the ‘held covered clause’ of the ICC. AXA are under no obligation to inform Everbright that the vessel declared by them does or does not fall within the parameters of the ICC. The responsibility rests with Everbright to ensure that the vessel declared is one which can, at least, fall within the scope of the held covered clause. If the held covered clause applies, AXA are entitled to impose a higher premium and other conditions, if any, in providing insurance for the shipment. If the held covered clause does not apply, AXA are not under a duty to inform Everbright that they are not providing cover for such a vessel. In such circumstances, there will simply be no contract of insurance for the shipment. [emphasis added] [34] The Court of Appeal essentially held that since there was no contract of insurance between Everbright and AXA, there was no basis upon which Everbright could have brought a successful claim against AXA. [35] Based on the above case, the burden of proof is on the Plaintiff as the Insured to show that they have complied with requirement that the Cargo was shipped on a qualifying vessel. Any failure to do so meant that there is no cover for any cargo carried on board the Vessel. [36] The above ratio has been followed in other jurisdictions. In the Hong Kong case of Nam Kwong Medicines & Health Products Co. Ltd. v. S/N hVNcQPi1U06wfUTKhxuVMA 14 **Note : Serial number will be used to verify the originality of this document via eFILING portal China Insurance Co. Ltd [2002] Vol. 2 Lloyd's Law Reports 591, the plaintiff, Nam Kwong, was a mainland Chinese company based in Macau. It had purchased 15,788 drums of refined bleached and deodorized palm olein valued at U.S.$2,442,000 from a Singaporean company Pao Sang Trading by means of a letter of credit. Pao Sang had purchased the cargo from another Singaporean entity Kong Hoo (Private) Ltd. The cargo was shipped on board the vessel Pacifica at Pasir Gudang, Malaysia. The bills of lading recorded the discharge port as Beihei, Guangxi, China and that the notify party was the plaintiff, Nam Kwong. The voyage to Beihei should have taken 8 to 10 days but Pacifica never arrived. Pacifica had never been found. It was said that Pacifica was a "phantom ship" which disappeared on a voyage only to assume a new identity thereby facilitating the theft and onward sale of her fraudulently acquired cargo. [37] The cargo was insured by the defendant on the application of Nam Kwong. The policy was expressly subject to the condition: “Covering Marine Risks as per Institute Cargo Clauses (A) dated 1/1/82 . . . Institute Radioactive contamination clause. Institute classification clause”. [38] The plaintiff claimed under the policy. The defendant denied liability contending that (1) the vessel was unclassified in breach of the Institute Classification Clause (ICC); (2) there was material non- disclosure on the part of the plaintiff at the time the risk was placed; (3) s. 44 of the Marine Insurance Act, 1906 was applicable in that it provided inter alia: S/N hVNcQPi1U06wfUTKhxuVMA 15 **Note : Serial number will be used to verify the originality of this document via eFILING portal “Where the destination is specified by the policy, and the ship instead of sailing for that destination sails for another destination the risk does not attach”. [39] The plaintiff submitted that the reference to the ICC should be ignored or rejected but that if it should be held that the ICC was effectively incorporated then rectification was sought by deletion of the reference to the ICC on the ground of unilateral mistake in that the ICC was introduced into the contract by unfair dealing and inequitable conduct. The plaintiff also argued that the ICC was not effectively incorporated into the insurance agreement since if the ICC had any meaningful role in purely facultative cover such could not be as a condition but merely as a held covered clause; and references to classification could have no relevance in a held covered provision where there was no contractual requirement or warranty that the vessel be classified. [40] Stone J in the Hong Kong High Court in dismissing the plaintiff’s claim held inter alia that: (1) the policy as issued stated expressly that the policy was subject to the ICC; the undisputed evidence was that classification was a fundamental requirement of commercial shipping, that virtually all vessels were classed and about 95 percent were classed by societies listed in the classification clause; Pacifica was not classed with an approved classification society; S/N hVNcQPi1U06wfUTKhxuVMA 16 **Note : Serial number will be used to verify the originality of this document via eFILING portal (2) there was no possibility of the assured being held covered under the ICC in that no prudent underwriter would be prepared to underwrite this risk at any reasonable premium on the basis of the facts capable of being known at the material time; the held covered provision in the ICC did not assist; and such provision could not be invoked where it would be impossible to offer the risk at a commercial rate of premium. [41] In the case of Kam Hing Trading (Hong Kong) Limited v The People’s Insurance Company of China (Hong Kong) Limited & Anor [2010] HKCU 1864, by a writ issued on 6 June 2008, the plaintiff, Kam Hing Trading (Hong Kong) Limited (‘Kam Hing’), made an insurance claim in respect of the loss of a cargo of 877 Malaysian round logs which on 31.10.2007 were shipped on board the vessel "WORLDWIDE SHANGHAI" (‘the vessel’) at the port of Sandakan, Sabah, Malaysia, for carriage to, and delivery at, Zhangzhou, China. There is no dispute that the vessel sank in heavy weather in the Taiwan Strait, close to Kaohsiung, at around 0800 hours on 10 November 2007; the crew were rescued, but the cargo of 877 round logs went down with the vessel. [42] Stone J in the Hong Kong High Court held inter alia as follows: (1) That the Institute Classification Clause (ICC) has been in widespread indeed almost universal and used in Marine Cargo Open Covers based on the Institute Cargo Clauses for many years to ensure that neither unusual nor unanticipated elements of risk, specifically relating to the carrying vessel, are introduced into the insured venture; S/N hVNcQPi1U06wfUTKhxuVMA 17 **Note : Serial number will be used to verify the originality of this document via eFILING portal (2) The practical effect of the ICC is to allow insurers to consider and to evaluate any shipments which are contemplated on board old, or non-IACS [International Association of Classification Societies] classed ships, since in certain trades i.e. log trades, where it is frequently the case that the ships employed fall outside the parameters of the ICC; (3) Where the issue involves classification per se, the insurers are inclined to decline the risk altogether or impose a substantial additional premium as there is a widespread perception that a vessel is not so classed is likely in some way to be physically substandard; (4) A significant purpose of the ICC is that even though the insurer is on risk before it is aware of the carrying vessel, nevertheless it has the security of knowing that the assured has ensured that the vessel is within the scope of the agreed risk. Therefore, the court agrees that it is the assured who should bear the burden of ensuring that the carrying vessel is in compliance with the requirements laid down by the ICC; and (5) the Singaporean Court of Appeal case in Everbright Commercial Enterprises Pte Ltd (supra) is correct to find that it is the assured which bears the obligation to ensure ICC compliance in light of the fact that the insurer, with obligatory commitments already in place, was agreeing to be on risk prior to being furnished details of the carrying vessel. S/N hVNcQPi1U06wfUTKhxuVMA 18 **Note : Serial number will be used to verify the originality of this document via eFILING portal [43] Finally, in the Malaysian case of Seapower Shipping Sdn Bhd v QBE Insurance (Malaysia) Bhd [2022] MLJU 1796, Christopher Chin J in the Sibu High Court, in dismissing the plaintiff’s case held as follows in respect of the ICC: “[5] My decision was founded on two main findings. Firstly, the plaintiff had failed to maintain the vessel’s classification, an issue which is sacrosanct in the shipping industry and, secondly, such failure resulted in a breach of the terms of the insurance policy over the vessel. I bore in mind the fundamentally established obligation for full disclosure in contracts of insurance. [19] The classification of a vessel is critical to its existence and its ability to carry trade as well as mandatory requirement of charterparties. The charter and voyages of a vessel are planned around its scheduled survey to maintain its classification. Here is where the Plaintiff fell short. [24] With the classification suspended due to the clear fault or neglect of the Plaintiff, it triggered a breach of warranty of the policy in clause 4 (above). [25] The Plaintiff has through his own neglect or inaction committed a breach of warranty of the Policy through his neglect and this fact renders the Plaintiff without a cause of action. The able arguments by the Plaintiff’s counsel cannot change this fact. The Plaintiff has failed to realise the importance of maintaining a vessel’s classification which is a routine requirement in the maritime industry worldwide. Conclusion [32] The suspension of the vessel’s classification brought about by the omission by the Plaintiff to have the vessel surveyed within S/N hVNcQPi1U06wfUTKhxuVMA 19 **Note : Serial number will be used to verify the originality of this document via eFILING portal the period mandated by the classification society has resulted in the Plaintiff committing a breach of warranty of the terms of the Marine insurance policy covering the vessel, allowing the Defendant insurer to be exonerated from liability thereunder.” [emphasis added] [44] The above cases clearly illustrate that the failure by the Plaintiff to comply with the ICC and ensure that the Vessel was classed with the IACS is a fundamental breach of the warranty in the MSIG Policy and the MPI Policy requiring such classification. Such failure renders the Plaintiff without any cause of action. The cases also illustrate that the burden of proof is on the Plaintiff to ensure compliance with such classification. The effect of breach of warranties can also be demonstrated in the case of Tay Wee Khyun v Americal International Assurance Co Ltd The “Yuling No 2” [1971] 1 MLJ 218. [45] The Plaintiff’s response to the non-compliance of the ICC classification clause is to refer to the 1st Defendant’s certificate of renewal which stipulates special excess amount and limit of liability for shipment to and from Batam. More specifically, the terms and conditions stipulated thus: “1. By Air/Sea -RM3,000,000.00 (incidental to air/sea shipment) 2. Wooden Vessels (eg: to/from Batam) - RM1,000,000.00” [46] The Plaintiff contended that because of the special arrangements for the cover to include wooden vessels to and from Batam for a S/N hVNcQPi1U06wfUTKhxuVMA 20 **Note : Serial number will be used to verify the originality of this document via eFILING portal reduced limit of liability of RM1,000,000.00, this must necessarily mean that the 1st Defendant was prepared to cover for a full range of ships, namely, from those that are classified under the ICC clause to wooden ship. This would include ships which are not classed by IACS, which according to the Plaintiff only means that the limit of the cover would be lower than RM 3,000,000.00 but above the minimum RM 1,000,000.00. The aforesaid is said to flow from the fact that the 1st Defendant had accepted a higher risk when it agreed to cover ‘wooden vessels’. [47] In support, the Plaintiff referred to the following passage in the case of Medan Damai Sdn Bhd v. Lonpac Insurance Sdn Bhd [2018] MLRHU 1088, where the Lordship stated as follows: “[31] The fact that the Retaining Wall had stood strong and stable for 9 years is testament to the fact that it had been properly built for there is no evidence that for those years before the collapse, there had been no heavy rain. In fact it is precisely because of the unpredictability of the weather and in this case water from heavy rain and sometimes unusually heavy rain, that people like the Plaintiff would take out such a Policy from people like the Defendant who would be in a position to weigh and consider the risk involved and quote the necessary premium. The fact that the Retaining Wall had stood strong and stable for 9 years is testament to the fact that it had been properly built for there is no evidence that for those years before the collapse, there had been no heavy rain. In fact it is precisely because of the unpredictability of the weather and in this case water from heavy rain and sometimes unusually heavy rain, that people like the Plaintiff would take out such a Policy from people like the Defendant S/N hVNcQPi1U06wfUTKhxuVMA 21 **Note : Serial number will be used to verify the originality of this document via eFILING portal who would be in a position to weigh and consider the risk involved and quote the necessary premium… [77] However upon a closer scrutiny of the relevant Clause, I can appreciate where the Defendant Insurer is coming from where the premium of the Policy will be adjusted upwards accordingly if the proper total replacement costs of the whole of the collapsed Wall is higher than the amount insured against... [85] I agree with the Defendant that Memo 1 is generally known as an underinsurance clause or an average clause. Such a clause effectively provides that the insured could only recover the proportion that his loss bears to the risk known to the insurer, and upon which the insurer assessed the premium. Authority for this is found in Dirby C Jess (1993) The Insurance of Commercial Risks : Law And Practice (Second Edn), Butterworths, London, Dublin and Edinburgh at p 326.” [emphasis added] [48] Based on the above authority, it was contended that the premium quoted for a particular period of insurance is based on the risk undertaken by the insurer. Accordingly, the premium and their limit of liability is adjusted based on the insurer’s risk assessment. By this I understand the Plaintiff to mean that the scope and coverage of the risks in the insurance policy with the 1st Defendant would be decided by the Plaintiff. In the contract of insurance based on the certificate of renewal issued by the 1st Defendant before us, because the Plaintiff had chosen to limit the 1st Defendant’s liability to RM1,000,000.00 even for wooden vessel travelling to and from Batam which the 1st Defendant had accepted, this means that any vessel which is better than a wooden vessel would come under the scope of the risks and the 1st Defendant’s action in repudiating S/N hVNcQPi1U06wfUTKhxuVMA 22 **Note : Serial number will be used to verify the originality of this document via eFILING portal liability on the ground that the vessel was not properly classed by IACS is wrong. [49] With respect, the case of Medan Damai Sdn Bhd v. Lonpac Insurance Sdn Bhd (supra) does not at all support the proposition canvassed by the Plaintiff. That was a case dealing with an underinsurance clause or an average clause. Such a clause deals with the case where the insured has insured for less than the full value of the property that is lost and the insurer can reduce the claim in proportion to the amount of the under-insurance. This has nothing to do with the present case. [50] This is also not a case where it can be said that the Plaintiff had changed the nature of the risks during the currency of the policy which had been accepted by the 1st Defendant. The certificate of renewal was issued pursuant to the MSIG Policy which was a Marine Open Cover Policy. Such a policy offers a blanket coverage and keeps the insured from having to purchase a new policy each time a shipment or voyage is made. Instead, a declaration is made for each new voyage and the insurer is duty bound to notify the insurer if the voyage falls outside the scope of the policy. In other words, unless so notified, the terms and conditions of the Marine Open Cover Policy shall apply. [51] Thus, in the present case, no such notification had been made and there is a clear breach of the ICC 1/1/01 classification clause by the Plaintiff. S/N hVNcQPi1U06wfUTKhxuVMA 23 **Note : Serial number will be used to verify the originality of this document via eFILING portal [52] As against the 2nd Defendant, the Plaintiff contended that the 2nd Defendant had accepted the Vessel and had admitted its liability to pay based on the internal correspondence between the Plaintiff and the Plaintiff’s own agent, Marsh Broker as well as from the 2nd Defendant. The Plaintiff further alleged that there was a delay from the 2nd Defendant to process the claim from the Plaintiff. [53] More specifically, the Plaintiff relied on the internal audit trail of the 2nd Defendant where the Vessel which was declared by the Plaintiff was referred as “Unlisted Vessel”. By this, learned counsel for the Plaintiff contended that the 2nd Defendant had accepted the unlisted status of the Vessel, namely that the 2nd Defendant had known of the fact that the Vessel was not classed by IACS and still accepted the said Vessel for the voyage. [54] The 2nd Defendant maintained that it had never agreed to accept a non-ICC compliance vessel at all. The testimony of DW4 on the issue relating to the 2nd Defendant’s alleged acceptance of the Plaintiff’s declaration of the Vessel are set out below: “SOFIAN Ms Neela, just now my learned friend has asked you several questions. One of the questions is whether you have agreed that the underwriter has approved the declaration of the ship? And you have answered that you agreed the underwriter has accept the declaration. Can you explain to this Honourable Court why the underwriter accepts that declaration at that material time? S/N hVNcQPi1U06wfUTKhxuVMA 24 **Note : Serial number will be used to verify the originality of this document via eFILING portal DW4 Okay. Yang Arif, basically, when insured makes a declaration for their shipment, they are under the duty to declare the information that they submit to the insurance company to be truthful. So, based on that, we have endorsed Asean Trader, and we’ve issued a policy for the shipment.” “SOFIAN Last question, Ms Neela. My learned friend also asked you and give suggestion whether you agree that the vessel has been declared and accepted as an unlisted vessel by MPI for the 2nd Defendant. And you said you disagree. Can you explain why you disagree? DW4 Because it is not an unlisted vessel. Asean Traders is a listed vessel. And, the element of delay, or the elements of assessment of claim, it’s all will not come to place, I believe that is why the adjuster’s report was not included in the bundle. The reason why we are repudiating the claim is because the declaration of vessel is actually wrong. They have declared to us Asean Trader with a different IMO number, Yang Arif. But when the adjuster conducted investigation, it was actually belongs to a different vessel that was not declared to us. YA When you said it's unlisted vessel, what do you mean? DW4 Unlisted vessel is a vessel that is not recognized by the certain society. Meaning the maintenance, the seaworthiness of the vessel is actually non-classified. YA Non-classified. Not classed? DW4 Yes, yes.” S/N hVNcQPi1U06wfUTKhxuVMA 25 **Note : Serial number will be used to verify the originality of this document via eFILING portal [55] From the aforesaid, it is clear that the 2nd Defendant had treated the Vessel as a listed vessel and not an unlisted vessel. To my mind, the confusion lies in the meaning ascribed to words “unlisted vessel”. In the audit trail, the vessel was stated as “unlisted vessel” because the Plaintiff had provided a wrong IMO number to the 2nd Defendant for the Vessel. It was in this sense that the Vessel was stated as “unlisted vessel”. Indeed, there is no evidence that the Plaintiff had notified the 2nd Defendant that the Vessel was a non-ICC compliance vessel. [56] Based on DW4’s testimony, what is clear to this Court is the 2nd Defendant had accepted the declaration of the ship by the Plaintiff at that time on the premise that the Plaintiff, who was under the duty to declare the information to the insurance company to be truthful, had properly declared an ICC compliance vessel, albeit with a wrong IMO number. Thus, the 2nd Defendant had endorsed the Vessel and issued a policy for the shipment on that basis. [57] If truth, there is no evidence that the 2nd Defendant had accepted the Vessel as an unlisted vessel. If indeed this was the case, the 2nd Defendant would have engaged with the Plaintiff to negotiate on the increase premium payable to cover for the greater risk or danger in respect of the use of an unlisted vessel. [58] As regards the issue of delay by the 2nd Defendant in processing the Plaintiff’s claims, I do not find this to be relevant given that the Plaintiff had breached clause ICC1/1/01 on the classification of the Vessel. In any case, DW4 provided a satisfactory reason for the delay in her testimony. This was what she said: S/N hVNcQPi1U06wfUTKhxuVMA 26 **Note : Serial number will be used to verify the originality of this document via eFILING portal “Yes. I disagree because when the claim was notified to us, Yeo Hiap Seng informed our insured, Unimaju that they are going to make a claim under MSIG first. So, we did do investigation, but we did not deliver a claims decision as yet. Until they came back to us and inform that MSIG has actually declined the claim, so only then we have collected the documents and handle the claim more proactively”. [59] The fact that the 2nd Defendant had not rejected the Plaintiff’s claim and had wanted to wait for the 1st Defendant’s decision on the Plaintiff’s claim cannot amount to an admission of the Plaintiff’s claims. [60] Accordingly, it is my judgment that the Plaintiff has no right to cover under the MSIG Policy and the MPI Policy since the Vessel is not a "qualifying vessel" within Clause 1 of the Institute Classification Clause 1/1/01 and thus falls outside the scope of both the policies. AS the Plaintiff has failed in its duty to comply with the condition precedent and or terms and conditions of the MSIG Policy and the MPI Policy and or the MPI Certificates of insurance, there was no insurance coverage for the Plaintiff and its claims must fail. This alone is sufficient to dispose of the Plaintiff’s action. [61] Nevertheless, for completeness, in addition to the defence relating to the ICC Clause and non-qualifying vessel, the 1st Defendant and the 2nd Defendant also contended that the Cargo was stored in breach of the terms under their respective policies. [62] In both the MSIG Policy and the MPI Policy, it was provided inter alia as follows: S/N hVNcQPi1U06wfUTKhxuVMA 27 **Note : Serial number will be used to verify the originality of this document via eFILING portal “CONDITIONS OF COVER Against the Risks of physical loss or damage from an external cause subject to the terms and conditions of the attached clauses and/or warranties insofar as applicable: … BY SEA Institute Cargo Clauses (A) 1.1.09 Institute War Clauses (Cargo) 1.1.09 Institute Strikes Clauses (Cargo) 1.1.09 … Institute Classification Clause 1.1.2001 … Cargo ISM Endorsement (JC98/019 1st May 1998) Warranted interest shipped under deck unless containerised … DECK CARGO Interest shipped on deck within a container of solid wall and roof construction is covered on Open Cover conditions specified without additional premium. All other deck cargo is subject to the Institute Cargo Clauses (C) 1.1.09 (including washing overboard), …” [emphasis added] [63] Based on the photographs provided for by the Plaintiff’s shipping agent, Unimajestic Agency Sdn Bhd (“Unimajestic”) to MISB, some of the Plaintiff’s Cargo was placed on the open deck in breach of the above warranty. S/N hVNcQPi1U06wfUTKhxuVMA 28 **Note : Serial number will be used to verify the originality of this document via eFILING portal [64] Unimajestic also supplied the stowage plan to MISB showing that there were 91 pallets stowed on the open deck and 479 pallets stowed below deck. [65] In fact, PW2 when giving evidence for Unimaju Logistics Sdn Bhd also confirmed that she was a director of Unimajestic. At no time did she offer any evidence to contradict the evidence put forth by DW1 and DW2 from MISB. Their evidence in this regard remained unchallenged. [66] During cross examination, PW2 was referred to a Fixture Note. She confirmed as per the contents therein that her company Unimajestic was named as the Disponent Owner of the Vessel and Unitylink Services & Agency Sdn Bhd (“Unitylink”) was named as the Charterer. She confirmed that Unitylink was an unconnected company to her group of companies. This is what she said in the NOE (8.1.2024): FARIK And you are… or rather, since you're director, Unimajestic Agency Sdn. Bhd. named as Disponent Owner, can you tell the Court, what is the Disponent Owner? PW2 Disponent Owner, we are not the owner of the vessel, but in this contract, we are the representative of the owner. YA You're the representative of the? PW2 Owner in… ship owners. FARIK Ship owners. Meaning the ship… PW2 I mean this vessel is chartered by us. S/N hVNcQPi1U06wfUTKhxuVMA 29 **Note : Serial number will be used to verify the originality of this document via eFILING portal FARIK So your… or rather this document seem to be putting yourself brought as the agents for the carriers? The ship? PW2 Aaa… yes. FARIK Is Unitylink Services & Agency Sdn. Bhd. also a related company? PW2 No. [67] It is clear that Unimajestic as the Disponent Owner, representing the Ship Owner knew of the arrangement of the Cargo and knew that 91 pallets of the Cargo had been placed on the open deck. [68] The 91 pallets that were shipped on deck was a clear breach of the warranty. In this regard, Section 33(3) of the Marine Insurance Act 1906 provides that, in the event of non-compliance with a warranty, “then subject to any express provision in the policy, the insurer is discharged from liability as from the dated of breach of warranty, but without prejudice to any liability incurred by him before that date”. [69] The Marine Insurance Act 1906 is applicable in Malaysia by virtue of Section 3 of the Civil Law Act 1956 which provides inter alia as follows: “Application of U.K. common law, rules of equity and certain statutes 3. (1) Save so far as other provision has been made or may hereafter be made by any written law in force in Malaysia, the Court shall— S/N hVNcQPi1U06wfUTKhxuVMA 30 **Note : Serial number will be used to verify the originality of this document via eFILING portal (a) in Peninsular Malaysia or any part thereof, apply the common law of England and the rules of equity as administered in England on the 7 April 1956; Provided always that the said common law, rules of equity and statutes of general application shall be applied so far only as the circumstances of the States of Malaysia and their respective inhabitants permit and subject to such qualifications as local circumstances render necessary.” [70] Lord Goff in Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Ltd (The Good Luck) (1992) AC 233 said: “…if a promissory is not complied with, the insurer is discharged from liability as of the date of breach of warranty, for the simple reason that fulfilment of the warranty is a condition precedent to the liability of the insurer. This moreover reflects the fact that the rationale of warranties in insurance law is that the insurer only accepts the risk provided that the warranty is fulfilled…” [71] As such, I agree with learned counsel for both the 1st Defendant and the 2nd Defendant that the 91 pallets on the open deck are clearly not covered under their respective policies. Not containerised, the stowage of the Deck Cargo was in breach of the Conditions of Cover. [72] In fact, quite apart from the aforesaid breach of the Conditions of Cover, there is further evidence that both the Deck Cargo and the Under Deck Cargo were inadequately secured. S/N hVNcQPi1U06wfUTKhxuVMA 31 **Note : Serial number will be used to verify the originality of this document via eFILING portal [73] DW1 in his evidence in chief stated that the Cargo both On Deck Cargo and Under Deck Cargo were inadequately secured. In his evidence in chief, DW 1 stated thus in his Q/A 3: “Storage of cargoes (a) The Master, Captain Isep Yayat had advised that out of the 570 pallets loaded, 91 pallets were loaded on deck/hatch covers whilst 479 pallets were loaded in the vessel’s cargo hold. (i) 91 pallets were loaded on deck/hatch covers Based on the photographs (Appendix 11- see Bundle B1 pp131- 133) of the palletised cargoes on the deck/hatch covers, it can be noted that the palletised cargoes on deck/hatch covers were partially lashed/secured and covered with tarpaulin/canvas. This method is not secured enough. The tarpaulin should be secured with rope nets. When the vessel was listing after encountering the bad weather and sea condition at Pulau Pisang, Johor and in order to upright the vessel, the vessel’s crew members had released the lashings on the palletised cargoes on hatch covers with the intention of re- stowing the cargoes. However, when the lashing wires were released, this had resulted in most of the cargoes to have fallen overboard and lost into the sea. See also Master’s police report at Appendix 6 of my report at pp 116-118 IDBI. (ii) 479 pallets were loaded in the vessel’s cargo hold Based on the photographs (Appendix 12- see Bundle B1 pp134- 135), it is noted that the palletised cargoes in the vessel’s cargo hold were stacked on top of each other up to 3 tiers high. No lashing of cargoes in cargo hold was noted. As the cargoes in the cargo hold were not secured/lashed in this case, this had caused the cargoes in the vessel’s cargo hold to have S/N hVNcQPi1U06wfUTKhxuVMA 32 **Note : Serial number will be used to verify the originality of this document via eFILING portal shifted/moved/collapsed and resulted in the listing of the vessel and thus cargo damaged. However, if the cargoes in the cargo hold had been adequately secured/lashed and shoring with dunnages applied, the cargoes would not have collapsed/shifted.” [emphasis added] [74] PW3 who represented Avatar Atlantic Sdn Bhd (“Avatar”) and purportedly witnessed the loading and stowage of the Deck Cargo actually agreed that the lashings were most likely inadequate: See NOE (8.1.2024): FARIK Do you also agree with me that the photos in 387 and even in the colours is not extremely clear whether the goods are securely… The word is securely now, you agree with me? PW3 Yes. FARIK So based on that, there is possibilities that during a rough sea, do you agree with me, the goods on board in the open deck may fall into the sea? There is a possibility? PW3 Because of a rough sea? FARIK Yes. PW3 Yes. [emphasis added] [75] In fact, based on Avatar’s report, only 40 minutes were spent on lashing before the Vessel set sail 15 minutes later. Based on this, PW3 agreed with learned counsel for the 1st Defendant that the lashings were most likely inadequate. See NOE (8.1.2024): S/N hVNcQPi1U06wfUTKhxuVMA 33 **Note : Serial number will be used to verify the originality of this document via eFILING portal FARIK Correct. Okay, let’s go back to the timelines. So this is at page 381. Now, you give the date of 4.5.2019 you went there, and the vessel also sailed about 15 minutes later after the lashing was completed, am I correct? Based on this timeline? PW3 Based on the report. FARIK Which was prepared by your company? PW3 Ya. FARIK So based on this, there were so many pallets as you can see, there is a lot cargo on board. But according to your report, only 40 minutes was taken between the commence of lashing and the completion of lashing, am I correct? PW3 Yes. FARIK I put it to you that, the 40 minutes given the size of the cargo both on board and on the open deck as well as in the hold, would be insufficient, do you agree with me? PW3 Ya. FARIK You agree with me? PW3 Ya. [emphasis added] [76] PW3 also testified that the Under Deck Cargo was not properly secured using dunnages. In fact, he very candidly acknowledged that he was an ‘oil and gas man’ and not a marine expert. He confessed not knowing what were dunnages when asked about the same. [77] In this regard, the BOS surveyor concluded that the cause of the casualty was the collapse of the stowage in the cargo-hold during the heavy weather reportedly experienced and the resulting shift of S/N hVNcQPi1U06wfUTKhxuVMA 34 **Note : Serial number will be used to verify the originality of this document via eFILING portal Under Deck Cargo to starboard. The cause of the collapse of the stowage was the reported lack of lashing, securing and shoring of the Under Deck Cargo within the hold. [78] More specifically, the MSIG Policy was subject to the Institute Cargo Clauses (A) 1/1/09, which provide inter alia as follows: “EXCLUSIONS 4. In no case shall this insurance cover 4.1 loss damage or expense attributable to wilful misconduct of the Assured 4.3 loss damage or expense caused by insufficiency or unsuitability of packing or preparation of the subject-matter insured to withstand the ordinary incidents of the insured transit where such packing or preparation is carried out by the Assured or their employees or prior to the attachment of this insurance (for the purpose of these Clauses "packing" shall be deemed to include stowage in a container and "employees" shall not include independent contractors) … 5. … 5.1 In no case shall this insurance cover loss damage or expense arising from 5.1.2 unfitness of container or conveyance for the safe carriage of the subject-matter insured, where loading therein or thereon is carried out prior to attachment of this insurance or by the Assured or their employees and they are privy to such unfitness at the time of loading.” S/N hVNcQPi1U06wfUTKhxuVMA 35 **Note : Serial number will be used to verify the originality of this document via eFILING portal [79] Based on the evidence alluded to above, and the admissions by PW3, the 479 pallets of cargo were loaded in the cargo hold of the Vessel were not secured properly in a fit and proper manner to withstand the ordinary incidents of the insured transit (i.e where they were not properly secured), the loss of the said cargo is excluded by Exclusions 4.3 and/or 5.1.2 of the Institute Cargo Clauses (A) 1/1/09. [80] In fact, a similar defence was successfully upheld in the English case of Mayban General Assurance BhD and others v Alstom Power Plants Ltd and another [2004] All ER (D) 93. In that case, a large electrical transformer was shipped on board the vessel 'Eliane Trader' at Ellesmere Port by the first defendant, for carriage to Rotterdam on the first stage of its journey by sea to Malaysia. The transformer had been manufactured by the second defendants as part of the equipment required for a new power station being built at Manjung. At Rotterdam it was transferred to a container vessel, the 'P&O Nedlloyd Southampton' on which it was carried to Lumut before being carried on to Manjung. On arrival at the site, it was found to be seriously damaged and had to be returned to the second defendant for repairs. The cost of those repairs and associated expenses was in excess of £1m. [81] The second defendant believed that the damage to the transformer had been caused by some unusual event in the course of the voyage from the UK to Malaysia. It made a claim under the policy of insurance covering electrical equipment being supplied to the power station. Clause 10 provided: S/N hVNcQPi1U06wfUTKhxuVMA 36 **Note : Serial number will be used to verify the originality of this document via eFILING portal '[T]his insurance shall in no case be deemed to extend to cover loss damage or expense proximately caused by delay inherent vice or nature of the subject matter insured'. The policy also incorporated the Institute Cargo Clauses (A) CL-252 (Jan. 1. 1982), cl 4.4 of which provided that the insurance would not cover 'Loss, damage or expense caused by inherent vice or nature of the subject matter insured'. [82] The claimant insurers took the view that the damage to the transformer had resulted from the transformer's inability to withstand the ordinary incidents of carriage by sea from the UK to Malaysia during the winter months. They accordingly rejected the claim on the ground that the loss was caused by inherent vice and issued proceedings seeking a declaration that they were not liable to indemnify the defendants in respect of it. [83] According to Moore-Bick J in dismissing the Insured’s claim: “32. A cargo that cannot withstand prolonged exposure to conditions of that kind cannot in my view be regarded as fit for the voyage. The fact that many other transformers of a similar design have been carried without apparent mishap does not enable one to draw the conclusion that something extraordinary happened in this case. It was apparent from Prof Allan's evidence that a certain degree of damage to the mitre joint between the unwound limbs and the yoke is not fatal because no mechanical stresses are imposed on it in operation and the consequent losses in efficiency may be within acceptable limits. There is no evidence of the extent to which the joints in any other transformers were affected by their experiences in the course of S/N hVNcQPi1U06wfUTKhxuVMA 37 **Note : Serial number will be used to verify the originality of this document via eFILING portal the voyage, but in the light of the evidence that has been given in this case I would not be willing to assume that they were all wholly unaffected. 33. In the light of the evidence as a whole I am satisfied the loss in the present case was caused by the inability of the transformer to withstand the ordinary conditions of the voyage rather than by the occurrence of conditions which it could not reasonably have been expected to encounter. It follows that the insurers are not liable to indemnify Alstom in respect of the damage it suffered.” [emphasis added] [84] The above put paid to the Plaintiff’s contention that the proximate cause for the loss of the Cargo was in fact the storm and not the insufficient lashings and or stowage. The Cargo was not secured properly in a fit and proper manner to withstand the ordinary incidents of the insured transit. It was never suggested that the storm that had occurred was one that was beyond the usual occurrences that such voyage would face such that even with the Cargo properly secured and lashed, the loss would have followed. [85] Finally, the 1st Defendant contended that the Plaintiff in this case had obtained another insurance policy covering the same Cargo at the material times. In reliance on the preamble to the MSIG Policy, the 1st Defendant submitted that it would only be liable for an amount (if at all) in excess of the other policy. More specifically, the preamble of the Policy stipulates: “This insurance does not cover any loss or damage to the property which at the time of the happening of such loss or S/N hVNcQPi1U06wfUTKhxuVMA 38 **Note : Serial number will be used to verify the originality of this document via eFILING portal damage is insured by or would but for the existence of this certificate/policy be insured by any fire or other insurance certificate/policy or policies except in respect of any excess beyond the amount which would have been payable under the fire or other insurance certificate/policy or policies had this insurance not been affected.” [86] In this case, it is not in dispute that the Plaintiff had obtained a Certificate of Marine Insurance issued by the 2nd Defendant for the insured sum of US$256,039.94 or RM1,110,252.31. This amount exceeds the Plaintiff’s claim in prayer (a) of the Statement of Claim of US$238,096.40, which is equivalent to RM972,790.46. [87] In Nanyang Insurance Co Ltd v Commercial Union Assurance Co plc [1996] SGHC 40, a firm of contractors who were insured under 2 public liability policies issued by Nanyang Insurance and Commercial Union. The contractors damaged certain underground cables and a third-party claim was settled by Nanyang for $63,023.28. Nanyang claimed contribution from Commercial Union. The Commercial Union policy stated that it was liable “except in so far as concerns any excess beyond the amount which would be payable under such other indemnity or insurance had this policy not been effected.” Warren L. H. Khoo J. decided that the Commercial Union policy expressly limited the insurers’ liability to any excess beyond the other policy. Nanyang Policy Commercial Union’s liability only came in when the loss suffered by the policyholder exceeded the coverage provided by the Nanyang policy. [88] Thus, guided by the case of Nanyang Insurance Co. Ltd (supra), it is my judgment that the 1st Defendant’s policy is not triggered. S/N hVNcQPi1U06wfUTKhxuVMA 39 **Note : Serial number will be used to verify the originality of this document via eFILING portal Conclusions [89] Accordingly, and for the reasons set out above, the Plaintiff’s action against the 1st and 2nd Defendants is hereby dismissed with costs fixed at RM 75,000.00 in respect of the 1st Defendant and RM 50,000.00 in respect of the 2nd Defendant subject to the usual payment of the allocator to be paid by the Plaintiff to each of the Defendants forthwith. [90] I would like to express my gratitude to the well written submissions by counsel, especially that of the 1st Defendant, which has assisted the Court considerably in arriving at this judgment. Dated the 4th day of April 2024 ONG CHEE KWAN Judge of the High Court of Malaya High Court of Kuala Lumpur, NCC2 S/N hVNcQPi1U06wfUTKhxuVMA 40 **Note : Serial number will be used to verify the originality of this document via eFILING portal Counsel: 1. Mr. Suthessegran A/L Gunasegran together with Mr. R. M. Murali for Plaintiff Messrs. Suthessegran & Assoc (Shah Alam) 2. Mr. Tunku Farik Bin Tunku Ismail together with Ms. Pee Kui Yee and Ms. Wong Hui Yi (PDK) for 1st Defendant Messrs. Azim, Tunku Farik & Wong (Kuala Lumpur) 3. Mr. Mohamad Sofian Shamsudin together with Ms. Lahvanya Chanelara and Ms. Farah Aqila Binti Mustafa for 2nd Defendant Messrs. Law Chambers of Vin & Ian (Kuala Lumpur) Case Reference: 1. Everbright Commercial Enterprises Pte Ltd v. AXA Insurance Singapore Pte Ltd [2001] 2 SLR 316 2. Nam Kwong Medicines & Health Products Co. Ltd. v. China Insurance Co. Ltd [2002] Vol. 2 Lloyd's Law Reports 591 3. Kam Hing Trading (Hong Kong) Limited v The People’s Insurance Company of China (Hong Kong) Limited & Anor [2010] HKCU 1864 4. Seapower Shipping Sdn Bhd v QBE Insurance (Malaysia) Bhd [2022] MLJU 1796 5. Tay Wee Khyun v Americal International Assurance Co Ltd The “Yuling No 2” [1971] 1 MLJ 218 6. Medan Damai Sdn Bhd v. Lonpac Insurance Sdn Bhd [2018] MLRHU 1088 S/N hVNcQPi1U06wfUTKhxuVMA 41 **Note : Serial number will be used to verify the originality of this document via eFILING portal 7. Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Ltd (The Good Luck) (1992) AC 233 8. Mayban General Assurance BhD and others v Alstom Power Plants Ltd and another [2004] All ER (D) 93 9. Nanyang Insurance Co Ltd v Commercial Union Assurance Co plc [1996] SGHC 40 Legislation Reference: 1. Sections 33(3) and 44 of the Marine Insurance Act 1906 2. Section 3 of the Civil Law Act 1956 S/N hVNcQPi1U06wfUTKhxuVMA 42 **Note : Serial number will be used to verify the originality of this document via eFILING portal