Jessica Trading Co. Ltd. V. Bendel Insurance Co. Ltd. (1996)

LAWGLOBAL HUB Lead Judgment Report

ADIO, J.S.C.

The appellant (the insured) took out a marine cover (Exhibits “D” to “D8”) from the respondent (the insurer) in relation to his cargo (white sugar) which was being shipped from somewhere in Europe to the port in Warri, Nigeria. The open cover was to “remain open and to attach to all sending made after 7th July, 1977 to 6th July, 1978”.

It was one of the terms of the policy that the cover was to terminate immediately after completion of discharge overside of the goods insured from the Oversea carrying vessel at the Nigeria Port. Upon paying the premium, the appellant was issued a marine certificate of insurance (Exhibit “F”) on the 13th July, 1978. An endorsement” as per open cover No. MAR. 3195/8/77″, was made on Exhibit “F”, and it was subject to the condition that Exhibit “F” was to terminate immediately after completion of discharge overside of the goods insured from the Oversea carrying vessel at the final port of discharge. Exhibit “D” to “D8” was otherwise known as open cover No. MAR. 3195/8/77.

The ship, M.V. Vori, which carried the consignment of sugar, got burnt off Abidjan. Some of the sugar consignment was salvaged. The parties held a meeting in relation to the matter. They agreed on certain terms which were set out in a letter, Exhibit “T”, otherwise referred to as “compromise agreement”, it was alleged that the appellant complied with the terms of the compromise agreement, Exhibit “T”, but the respondent did not observe and/or perform its own part. It was for that reason that the appellant instituted the present action in which it’s claim was as follows:-

“1(a) N146,138.18 being cost of 13, 371 bags of lost sugar.

(b) N29,375 being money paid to Messrs Blaesberg which towed the crippled M.V. Vori with its remaining cargo to Warri port.

(c) N2,000 being expenditure on overtime services authorised by the defendant.

(d) N142,371 being loss suffered by the plaintiff as interest on bank overdraft in that the defendant kept the plaintiff out of plaintiff’s money.

2. Alternatively payment of the sum of N319,984.19 as indemnification of the plaintiff by the defendant for loss of the plaintiff’s cargo insured by the defendant, for plaintiff’s portion of cargo interest contribution in getting the remains of the vessel carrying the cargo to Warri, for discharge expenses, and interest on the money lost which was not paid in time.”

The learned trial Judge in a considered judgment entered judgment for the appellant with costs assessed at N3,000.00. Dissatisfied with the judgment, the respondent lodged an appeal to the Court of Appeal. Ogundere, J.C.A., who read the leading judgment pointed out that section 24(1) of the Marine Insurance Act, 1961 constituted an absolute bar to the admissibility of evidence of the existence of marine insurance contract in civil proceedings unless embodied in a policy of marine insurance. He also pointed out that the principal documents on which the marine insurance contract in this case revolved were: (a) marine open cover (Exhibit “D” to “D8”), (b) marine certificate of insurance (Exhibit “F”), (c) Bill of lading (Exhibit “G”) and (d) compromise agreement (Exhibit “T”). After setting out the provisions of section 24 (1) of the Marine Insurance Act, 1961, he held that one of the aforesaid four documents was a marine insurance policy.

The learned Justice of the court below also held that having regard to the dates inserted in Exhibits “D” to “D8” and “F”, the policy was a time policy. In his view, the dates inserted in Exhibits “D” to “D8”, Exhibit “F” and Exhibit “T” showed clearly that the Marine Insurance Certificate (Exhibit “F”) and the alleged Compromise Agreement (Exhibit “T”) could not be properly said to be based on Exhibit “D” to “D8”, the open cover policy, which had expired before the issuance of the Marine Insurance Certificate and the making of the Compromise Agreement. He, therefore, concluded that the appellant’s goods were not covered by any policy of insurance issued by the respondent at the time of the accident.

There was a cross-appeal on the question whether the damages awarded could be reviewed upwards; interest on the amount awarded; the replacement cost of the export commodity, and devaluation of the naira. The Court below held that particular loss was exempted from the policy and in any case, the policy had expired before the accident in question occurred. What constituted depreciation of the naira was neither pleaded nor proved.

In accordance with the rules of this court, the parties filed and exchanged briefs. It is, however, necessary to deal with certain preliminary matters before giving consideration to the issues identified for determination in the briefs filed by the parties. Altogether, six issues for determination were set out in the appellant’s brief while six issues were set down for determination in the respondent’s brief. I think that by now the issues involved or necessary to be resolved for the determination of this case have been narrowed. The crucial issue is whether under the provisions of the open cover policy (Exhibit “D” to “D8”), the Marine Insurance Certificate (Exhibit “F”) or the Compromise Agreement (Exhibit “T”) either alone or in combination with one another it could rightly or legally be said that the respondent was liable to indemnify the appellant for the loss or damage, if any, suffered by the appellant as a result of the accident involving the ship, M.V. Vori at Abidjan (West Africa) on the 4th September, 1978. Having regard to the issues set down by each party in its brief and the circumstances mentioned above, I am of the view that the following issues set out hereunder are reasonably sufficient for the determination of this appeal;

1. Whether any of the documents (Exhibits “D” to “D8”, “F” and “T”) on which the appellant relied in this case was a marine insurance policy and, if so, the nature of the policy.
2. If the answer to the first part of issue (1) is in the affirmative, whether it could legally be said that, under the provisions of the marine insurance policy or policies, the respondent was liable to indemnify the appellant for the loss or damage, if any, suffered by the appellant as a result of the accident involving the vessel, M.V. Vori at Abidjan (West Africa) on the 4th September, 1978.
3. If the answer to the question raised under issue (2) is in the affirmative, what was the nature and extent of the indemnity, if any
4. Whether the court below was right in dismissing the cross-appeal of the appellant in its entirety.”

For the avoidance of doubt, one of the preliminary matters that must be noted is that the law that is applicable to a matter was the law that was in force when the incident in question occurred. See Fatola v. Mustapha, (1985) 2 NWLR (Pt.7) 438. For that reason, the legislation that was applicable in this case was the Marine Insurance Act, 1961. Therefore, the words, “the Act” wherever they occur in this judgment, except where it is otherwise stated, mean the Marine Insurance Act, 1961. A contract of insurance is, according to section 3 of the Act, a contract – whereby the insurer undertakes to indemnify the assured, in manner and to the extent thereby agreed, against marine losses, that is to say, the loss incident to marine adventure. The word “policy” under section 2 of the Act means a marine policy. Its ordinary meaning is that, in form, it is a unilateral undertaking by the insurers to pay the sum insured on the happening of the specified event and, unless and until rectified, is the exclusive record of the contract. See Halsbury’s Laws of England, 4th Ed.Vol,25 para. 406. The exclusive nature of a policy of insurance, as evidence of the contract of marine insurance, was affirmed by section 24 (1) of the Act which provided, inter alia, as follows:-

“24.(1) Subject to the provisions of any statute, a contract of marine insurance shall not be admissible in evidence unless it is embodied in a marine policy in accordance with the form in the first Schedule to this Act or to the like effect.