12 February 2025, the Moscow Arbitrazh Court considered a case on the insurance payment to cover losses arising from general average.
Parties to the case: OOO “Kotlin SK” (Claimant) and Ingosstrakh Insurance Company (Respondent).
Amount of claim: about 67.5 million Roubles.
Facts of the case:
On 6 April 2021, the parties entered into an insurance contract for the m/v Baltiysky Bereg (IMO No. 9327176) (hereinafter referred to as the Vessel).
The insurance territory was defined as the areas of the Baltic, North, Irish, Mediterranean, Black, Azov and Caspian Seas.
During the insurance contract period, the Vessel was engaged to transport cargo from the port of Porto Nogaro (Italy) to the port of Hull (United Kingdom). The cargo was loaded onto the Vessel in the port of Porto Nogaro.
On 4 August 2021 the Vessel departed from the loading berth.
On 17 August 2021 in the Atlantic Ocean north of Cape Finisterre (Spain, Iberian Peninsula) under standard weather conditions, the main engine of the Vessel broke down.
On 03 September 2021 the Claimant declared general average, arranged for the preparation of an average statement. The average statement was prepared by Blue Seas Adjusters Ltd. The average statement indicated that the events with the Vessel in the port of La Coruña from 18.08.2021 to 13.12.2021 were classified as general average events.
On 12 October 2021, the Claimant sent a claim to the Respondent for payment of insurance compensation.
The Respondent refused to pay the insurance compensation. The reason for the refusal was that the event occurred in the Atlantic Ocean outside the insurance territory.
Parties’ arguments:
The Claimant stated that any change in the navigation area cannot be a circumstance that releases the insurer from liability. The Claimant referred to the fact that the insurance contract mentions the term "navigation area", which is not identical to the term "insurance territory" or "insurance area". Therefore, the parties did not provide for the insurance territory.
The Respondent insisted that an event that occurred outside the insured navigation area was not an insurance risk. The Respondent referred to the Insurance Rules: Clause 6.9.2, where it was agreed that the insurer compensates for losses incurred only in the navigation area or on the voyage that were provided for in the insurance contract.
The Claimant also stated that in their correspondence the parties had changed the navigation area and the insurance contract, and that the insurance contract covered the Vessel's voyage from the port of Porto Nogaro (Italy) to the port of Hull (England) in full.
The Respondent stated that he had not given his consent in this correspondence to change the navigation area, and the Claimant had not paid an additional insurance premium.
The Court's judgement:
The Court dismissed the Claimant's claim.
The Court explained: the parties had established that only events occurring in the navigation area specified in the contract can be recognized as insurance risks and insurance events. This means that the navigation area is one of the characteristics (mandatory features) of insurance risk and insurance event.
The Court examined the correspondence of the parties and did not find that the Respondent had accepted the change in the insurance contract and the new navigation area.
Source: case No. A40-184958/23-43-1505
Parties to the case: OOO “Kotlin SK” (Claimant) and Ingosstrakh Insurance Company (Respondent).
Amount of claim: about 67.5 million Roubles.
Facts of the case:
On 6 April 2021, the parties entered into an insurance contract for the m/v Baltiysky Bereg (IMO No. 9327176) (hereinafter referred to as the Vessel).
The insurance territory was defined as the areas of the Baltic, North, Irish, Mediterranean, Black, Azov and Caspian Seas.
During the insurance contract period, the Vessel was engaged to transport cargo from the port of Porto Nogaro (Italy) to the port of Hull (United Kingdom). The cargo was loaded onto the Vessel in the port of Porto Nogaro.
On 4 August 2021 the Vessel departed from the loading berth.
On 17 August 2021 in the Atlantic Ocean north of Cape Finisterre (Spain, Iberian Peninsula) under standard weather conditions, the main engine of the Vessel broke down.
On 03 September 2021 the Claimant declared general average, arranged for the preparation of an average statement. The average statement was prepared by Blue Seas Adjusters Ltd. The average statement indicated that the events with the Vessel in the port of La Coruña from 18.08.2021 to 13.12.2021 were classified as general average events.
On 12 October 2021, the Claimant sent a claim to the Respondent for payment of insurance compensation.
The Respondent refused to pay the insurance compensation. The reason for the refusal was that the event occurred in the Atlantic Ocean outside the insurance territory.
Parties’ arguments:
The Claimant stated that any change in the navigation area cannot be a circumstance that releases the insurer from liability. The Claimant referred to the fact that the insurance contract mentions the term "navigation area", which is not identical to the term "insurance territory" or "insurance area". Therefore, the parties did not provide for the insurance territory.
The Respondent insisted that an event that occurred outside the insured navigation area was not an insurance risk. The Respondent referred to the Insurance Rules: Clause 6.9.2, where it was agreed that the insurer compensates for losses incurred only in the navigation area or on the voyage that were provided for in the insurance contract.
The Claimant also stated that in their correspondence the parties had changed the navigation area and the insurance contract, and that the insurance contract covered the Vessel's voyage from the port of Porto Nogaro (Italy) to the port of Hull (England) in full.
The Respondent stated that he had not given his consent in this correspondence to change the navigation area, and the Claimant had not paid an additional insurance premium.
The Court's judgement:
The Court dismissed the Claimant's claim.
The Court explained: the parties had established that only events occurring in the navigation area specified in the contract can be recognized as insurance risks and insurance events. This means that the navigation area is one of the characteristics (mandatory features) of insurance risk and insurance event.
The Court examined the correspondence of the parties and did not find that the Respondent had accepted the change in the insurance contract and the new navigation area.
Source: case No. A40-184958/23-43-1505