[Civil appeal No. 971 of 2014]
Institute Classification Clause in Marine Insurance Policy
The appellant is a partnership firm doing business of import- export. The respondent insurance company issued a marine cargo cover note cover voyage from any port of China to Mumbai Port for a sum of 12,63,712.50 US Dollars and policy document was also issued after getting required details of the vessel.Then on 19/07/2010 appellant got to know that that vessel had gone aground with a shipment of 80 prime hot rolled steel coils. Respondent was informed about the same on 20/07/2010 as there was a possibility of them claiming under the Marine Insurance Policy. The GAA was appointed and for the contribution towards losses appellant was also liable, for which appellant requested respondent to issue a General Average Guarantee in ‘Form B’ as required by the GAA and the same was done by the respondent. After which appellant was asked to pay the salvage security of 25 percent of the “Cost, Insurance, and Freight” amounting to 256,880 US Dollars, but the respondent denied to pay so and on 20/08/2010,insurance company withdrew the General Average Guarantee on account of Institute Classification Clause in the Marine Insurance Policy. The appellant by letter dated 2/2/2012 requested the respondent to settle losses incurred by it but it was left unanswered. Hence, the appellant filed a consumer complaint before the NCDRC against the Respondent but the complaint was dismissed on the ground that firstly appellant failed to prove that the subject vessel was in compliance with the ICC and Secondly, the subject vessel had been more than 25 years old and no document was produced showing that the subject vessel was classified as ‘IRS’.
What will be the impact of non compliance with the classification requirement in ICC?
It was held that the Appellant had committed breach of warranty and the same was not waived by the respondent, and the respondent is right in repudiating the claim of the Appellant. Hence, the appeal stands to be dismissed.
Section 34 and 37 of the Arbitration and Conciliation Act, 1996
Article 227 of the Constitution of India