NDLI: Haris Marine Products Vs. Export Credit Guarantee Corporation (ecgc) Limited

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Insurance – Respondent-ECGC provides a range of credit risk insurance cover to exporters
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Insurance – Respondent-ECGC provides a range of credit risk insurance cover to exporters – Appellant-exporter paid premium to ECGC for the Single Buyer Exposure Policy which covered foreign buyer’s failure to pay for goods exported – Coverage of the Policy was w.e.f 14.12.2012-13.12.2013 – The vessel set sail on 15.12.2012 – The Bill of Lading was prepared with a line specifying the date of ‘onboard’ (i.e., date on which vessel commenced loading the goods in question on board) as 13.12.2012 – The overseas buyer defaulted on payment – Appellant’s claim rejected by ECGC – Filed complaint before NCDRC, dismissed – On appeal, held: A plain reading of the policy in question demonstrates that it was taken to protect against failure of the foreign buyer in paying the Indian exporter for goods exported – It was not a policy taken to cover in-transit insurance, and the cause of action triggering the claim arose much later, i.e., on 14.02.2013, well within the coverage of the policy – While interpreting insurance contracts, the risks sought to be covered must also be kept in mind – The date of loading goods onto the vessel, which commenced one day prior to the effective date of the policy, is not as significant as the date on which the foreign buyer failed to pay for the goods exported, which was well within the coverage period of the Policy – Thus, the claim could not be dismissed simply on such basis, especially given that the date of loading the goods onto the vessel was immaterial to the purpose for which the policy was taken by the appellant – On harmoniously construing the documents of the policy, it is in fact the date on the Bill of Lading, and not the Mate’s Receipt/date of shipment which ought to be considered as the date of ‘despatch/shipment’, for the Bill of Lading is the legal document conferring title and possession of the goods to the carrier – Further deviating from the rule of contra proferentem, even if in the present instance the third-party DGFT Guidelines were to be applied, it would not favour the ECGC – Impugned order set aside and the appellant’s complaint is allowed – Foreign Trade (Development and Regulation) Act, 1992. Insurance – Rule of contra proferentem – Standard form insurance policies – Contract d’ adhesion or boilerplate contracts – Reconciliation of ambiguous terms – Held: An ambiguous term in an insurance contract is to be construed harmoniously by reading the contract in its entirety – If after that, no clarity emerges, then the term must be interpreted in favour of the insured, i.e., against the drafter of the policy – The rule of contra proferentem thus protects the insured from the vagaries of an unfavourable interpretation of an ambiguous term to which it did not agree – The rule assumes special significance in standard form insurance policies, called contract d’ adhesion or boilerplate contracts, in which the insured has little to no countervailing bargaining power – This consideration is highlighted in the present case, since the risks that respondent-ECGC is mandated to cover is its business, and other insurers rarely foray into the field.
Judge	Hon'ble Mr. Justice S. Ravindra Bhat
Neutral Citation	2022 INSC 471
Petitioner	Haris Marine Products
Respondent	Export Credit Guarantee Corporation (ecgc) Limited
SCR	[2022] 17 S.C.R. 297
Judgement Date	2022-04-25
Case Number	4139

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