Page 31 - The Insurance Times August 2025

damage to its port main engine, while on a voyage from I) After the first accident, although the Insured had
Singapore to Mumbai. The appointed Surveyor opined on informed the-Insurer about the damage caused to the
preliminary inspection that the crankshafts and connecting port main engine of the Vessel, based on which the
rods were beyond repair. However, due to urgent Insurer had paid a provisional claim of Rs 1 crore
commercial commitments, the main port engine was only towards advance for preliminary repairs, it was the
temporarily repaired. The Insurer, based on the Surveyor's insured's responsibility to subsequently get the
recommendation, and the invoice submitted by the insured, complete repair / replacement of the damaged parts .
paid Rs 1 crores as an advance for completing the repairs
ii) The Appellant-Insured failed to subsequently get the
complete repair of the Vessel done, and did not bring
Thereafter, the Insured renewed their Marine Hull Policy for
this fact to the knowledge of ABS-Surveyor. The Class
another year and during the validity of this renewed policy,
certificate is supposed to be issued by the Surveyor only
the Vessel was struck by a tug boat in Mumbai, as a result after taking into consideration all aspects including the
of which the Vessel sank with all the cargo on board. The defects, if any, brought to the notice of the Surveyor.
Insured submitted a Claim for the total loss of the Vessel.
iii) As per the ABS Rules for Building and Classing Marine
Insurer got a survey conducted to assess the loss. The vessel
Vessels, the class certificate issued by ABS in respect of
was found classed by the American Bureau of Shipping (ABS)
a vessel, will get suspended or cancelled in case, the
at the time of accident. However, the Surveyor's Report,
defects or damage pertaining to the ship or vessel are
noted that:
not reported to ABS before issue of such class warranty
(a) The Appellant or the owner of the Vessel did not inform
/ certificate.
ABS about the previous damage to the Vessel's main
port engine and ABS had issued the Class Warranty
The Two-Judge Bench of the Apex Court in its judgment said
based only on their inspection.
that,
(b) The Country Manager of ABS reported that if a vessel
sustains any damage to either Hull or Machinery and "As per the terms of the insurance policy, the termination
the same is not reported to the Class, then the Class
clause at 4.1 reads,
would deem to be automatically suspended as per ABS
Rules for Building and Classing Steel Vessels.... "Unless the Underwriters agree to the contrary in writing,
(c) It was concluded in the Surveyor's Final Report that the this insurance shall terminate automatically at the time of
Vessel cannot be recovered and that the permanent change of the Classification Society of the vessel, or change,
repairs to the Vessel, at the said stage, won't be suspension, discontinuance, withdrawal or expiry of her Class
effective, as the same ought to have been done after therein, provided that if the Vessel is at sea, such automatic
the first accident itself, which was not done by the termination shall be deferred until arrival at her next port.
Appellant-Insured. However, where such change, suspension, discontinuance
(d) Thus, the Surveyor recommended that the Insurer or withdrawal of her Class has resulted from loss or damage
covered by Clause 6 of this insurance, such automatic
recovers the advance Rs. 1 Crore, earlier paid to the
termination shall only operate, should the Vessel sail from
Appellant-Insured.
her next port without the prior approval of the Classification
Society".
As the Appellant-Insured's Claim was not settled by the-
Insurer, hence, the Insured filed a Consumer Complaint
before the Hon'ble National Consumer Disputes Redressal Clause 6 covers perils and includes the perils of the sea.
Commission .When the NCDRC dismissed their complaint, Rivers, lakes or other navigable waters.
the Insured aggrieved by the NCRDC order, filed Civil Appeal
No. 7228 of 2015 before the Hon'ble Supreme Court of Class warranty as per the policy warranted that the Assured
India. Owner's Manager and Superintendents shall comply with all
requirements of the Classification Society regarding the
The Apex Court vide Order dated 09-08-2023 made the reporting to the society of accident to and defects in the
observations that: vessel and for the purpose of any claim the Assured will

28 August 2025 The Insurance Times