Page 55 - Insurance Times May 2023

Insurance Caselaws

When goods can be said to have been in interpretation of similar matters related to insurance
claims but the principles of Business common sense can be
despatched/shipped in case of Marine
used in general other matters as well.
Insurance guaranteeing default in payment by
the Overseas Buyer. Compensation under Motor Vehicles Act
Haris Marine Products
Judgment passed by the Supreme Court in the case
Vs titled as
Export Credit Guarantee Corporation (ECGC) Limited Ramla
(Supreme Court) v.
National Insurance Company Limited
An interesting issue arose in this case when three judges Civil Appeal No. 11495 of 2018, Special Leave to Appeal
bench of Supreme Court was called upon to decide the issue (C) No.22334 of 2017.
where the foreign buyer in this case defaulted payment of
Rs 2.45 crores for which Credit insurance policy was taken Through a bench comprising of Justice N.V. Ramana and
by the appellant herein which was to run from 14th Justice M.M. Shantanagoudar, the Hon'ble Supreme Court
December, 2012. The goods were handed over to Ship on has held that there is no restriction in awarding
13th December,2012 though the ship sailed on 15th compensation over and above/ exceeding the amount
December, 2012 and ECGC in this case disputed the liability claimed under Section 168 of Motor Vehicles Act, 1988.
by saying that the goods were shipped before the start of
the policy by relying on the definition of Despatch in the Facts of the case
DGFT guidelines. The appellant argued that despatch must In the present case, claimants before the Hon'ble Supreme
mean the date on which the Ship sailed as simply loading Court were seeking further enhancement of compensation
the goods on the ship when the loading was to continue for from Rs. 21,53,000/- awarded by the High Court of Kerala
days could not have been meant despatched. The Supreme at Ernakulam.
Court agreeing with the appellant relied on the principles
of Business Common Sense as propounded by UK Supreme The claimants were the dependents i.e the wife, two
Court in Rainy Sky SA Case which was further developed in children, and an aged father of the deceased who
Arnold Vs Britton and held that this Court is of the opinion succumbed to death due to grievous injuries in an accident
that the date of loading goods onto the vessel, which in the year 2008. Initially, the claimants moved a claim
commenced one day prior to the effective date of the policy, petition before the Motor Accidents Claim Tribunal seeking
is not as significant as the date on which the foreign buyer a total compensation of Rs. 25,00,000/- (Rupees Twentyfive
failed to pay for the goods exported, which was well within Lakhs). After hearing the arguments, the Tribunal granted
the coverage period of the Policy. Thus, the claim could not a compensation of Rs 11,83,000/- which was enhanced by
be dismissed simply on such basis, especially given that the the High Court of Kerala by an additional award of Rs.
date of loading the goods onto the vessel was immaterial 9,70,000/-. Being aggrieved by the decision of the High Court
for the purpose for which policy was taken. The court also of Kerala, the claimants preferred an appeal before the
interpreted Rule of contra proferentem by observing that Hon'ble Supreme Court for further enhancing the amount
that an ambiguous term in an insurance contract is to be of compensation.
construed harmoniously by reading the contract in its
entirety. Decision of the Hon'ble Supreme Court
While deciding the present appeal filed by the claimants,
This is a landmark judgement which will be helpful not only the Hon'ble Supreme Court considered the salary certificate

The Insurance Times May 2023 49