Page 32 - The Insurance Times August 2025

provide certification by the Classification Society that the insurer will still be discharged from liability if it can be
vessel's Class has been maintained. It is contended that the proved that such confirmation was made without the
said warranty constitutes an express warranty in terms of knowledge of a breach of warranty.
Section 37 of the Marine Insurance Act, 1963 which was
breached by the appellants by not disclosing the first Effect of changes in Insurance Act and
accident and damage to the vessel. The appellant's failure
to comply with the requirements of ABS Rules and the Marine Insurance Act in UK
warranties by not reporting the accidents and damages to In this context an aspect that is overlooked by these
the vessel discharge the respondent from any liability under judgments is that the Marine insurance policies issued by
the insurance policy as per Section 35(3) of the Marine Indian underwriters are usually subject to Institute Cargo
Insurance Act, 1963." Clauses ,Institute Classification Clause (for Cargo ) and ITC
Hulls Clause 1.10.83( for Hull) , which would normally contain
From a perusal of Sections 35, 37, 41(5) and 55 of the Marine the clear provision that they are subject to English law and
Insurance Act, 1963 relating to warranties, the Court noted practice .This raises the interesting question of whether the
that a warranty is a condition which has to be exactly Indian Marine Insurance Act,1963 is at all applicable for
complied with, whether it is material to the risk or not. claims under such policies .Till recently such a discussion
Hence, if an insured breaches a warranty, the insurer is would be of academic relevance only ,since the UK Marine
discharged from its liability w.e.f. from the date of breach Insurance Act,1906 and the Indian Marine Insurance
of warranty. Act,1963 were identical in all aspects.

Both NCDRC and the Supreme Court have opined that the But that is not the situation presently with the enactment
seaworthiness or otherwise of the vessel at the point of of the Insurance Act, 2015 on 12th August, 2016 in the UK
accident is of no relevance to the admissibility of the claim. and the resultant changes effected in the UK Marine
Though the vessel was actually classed on the date of Insurance Act, 1906. .This is suitably highlighted in the
accident, the fact that it was obtained by concealment of excellent article by Prof (Dr) Abhijit K.Chattoraj in the
the prior damages, would render the same invalid under the Insurance Times issue of, March 2025, titled," Unlocking the
Classification Society rules. The policy having being issued Implication of Warranty, where he states that:
with an express warranty requirement of valid
Classification, such invalidity would constitute a breach of "Insurance Act, 2015(UK) initiated many changes that suit
warranty and and hence the claim would be inadmissible. the requirements of customers and business entities ..It
Further ,mere knowledge of the insurer that there is a is pertinent to mention that the two insurance laws that
breach of warranty is not a waiver in absence of an express work in the UK :
representation or disclosure to the insurer to that effect. 1. Consumer (Disclosure and Representations0 Act, 2012,
deals with consumer insurance contracts where an
In an earlier case involving a cargo claim titled Rajankumar individual enters into the contract wholly or mainly for
& Bros (Impex) vs. Oriental Insurance{ (2020), 4 SCC 364}, purposes unrelated to the individuals trade, business or
the Apex Court in a judgment dt 7.2.2020, had similarly held profession .The word consumer means an individual
that the non compliance of the Institute Classification Clause entering a consumer insurance contract or proposing
in the policy would discharge the insurer from liability and to do so.
further :
2. Insurance Act, 2015 applies to non consumer insurance.
a) It was not necessary to consider whether the non
It defines a non consumer insurance contract as a
compliance of the warranty would materially affect the
contract of insurance that is not a consumer insurance
risk.
contract.
b) There was no requirement for a specific representation
or conduct from the insurer The changes made in these two acts and the Marine Act,

c) but if the insurer makes a specific confirmation to 1906 somehow weren't incorporated in India's Insurance
indemnify the insured after the occurrence of a loss, the Laws (Amendment Act), 2015."

The Insurance Times August 2025 29