NICON V. POWER & INDUSTRIAL ENG. CO. LTD

• Pages: 1-32

NICON V. POWER & INDUSTRIAL ENG. CO

. LTD.

1

5

NICON V. POWER & INDUSTRIAL ENG. CO

. LTD.

NATIONAL INSURANCE CORPORATION

APPELLANT

OF NIGERIA

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V

POWER & INDUSTRIAL ENGINEERING

RESPONDENT

COMPANY LIMITED

SUIT NO. SC 194/1984

SUPREME COURT OF NIGERIA

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OBASEKI,

J.S.C.

ANIAGOLU,

J.S.C.

UWAIS,

J.S.C.

KAZEEM,

J.S.C.

OPUTA,

J.S.C.

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3rd January, 1986

Insurance - Marine Insurance - Contract of Marine Insurance - Inadmissibility

under S.24(1) of Marine Insurance Act 1961 unless embodied in Marine

Insurance Policy - Insurer issuing no formal policy but all essential requirements

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of floating policy as prescribed in Act contained in Marine open cover issued

by it and described ex facie as Marine Policy - Sufficiency of said open

cover as policy for purpose of proving contract between parties - Limitation

in open cover of insured risks to shipments made after date specified therein

-

Variation by subsequent Insurance Certificate basing particulars of insured

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interests on shipping document showing shipment before that date - Loss of

goods at sea after conclusion of contract but before demand for and payment

of premium - Entitlement of assured to indemnity.

Practice and Procedure - Circumstances under which Supreme Court should

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disturb concurrent findings of lower courts.

ISSUES:

1. What constitutes a policy of Marine Insurance within the terms of the Marine

Insurance Act 1961?

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2. Whether it is necessary for a policy of Marine Insurance to be produced in

evidence before a contract of insurance can be proved.

3. Whether a contract of Marine Insurance is inadmissible in evidence unless

embodied in a Marine Insurance Policy.

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4. What is the difference btween the effect of the provisions of S.23 and S.24 of

the Marine Insurance Act, 1961?

5.

Whether the right of indemnity of an assured, under a contract of insurance is

conditional on his previous payment of the premiums.

6.

Under what circumstances should the Supreme Court disturb concurrent

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findings of fact made by a lower court?

FACTS:

The plaintiff/appellant ordered 86,612 bags of rice from Bangkok in the Far

East, and the consignment (of rice)Was to be transported by sea to Port Harcourt

from Bangkok by a vessel MN "Eastern Saturn". After the ship had set sail on the

3rd of January, 1981 the plaintiff found out that the consignment had no insurance

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NIGERIAN SUPREME COURT CASES

[1986] 1 N.S.C.C.

cover and approached the defendant/appellant company for one. The defendant

issued a Marine Insurance open cover and subsequently a Certificate of Insurance.

Two months later, the plaintiffs were notified that the ship "Eastern Saturn" had sunk

with all the consignments on board. The plaintiff informed the defendant of this

and requested for advice as how to process the necessary claims. The defendant

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then wrote a letter to the plaintiff disclaiming liability and complaining that as no

premium had yet been paid, there was no contract of insurance in existence be-

tween themselves and the plaintiff. This was not true as the plaintiffs had paid their

premium some time after they were issued the certificate. The defendant company

later agreed that premium had been paid but still disclaimed liability on its own in-

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terpretation of the open cover policy contending that it was not available for any

shipment made prior to the 1st of February 1978. The plaintiff therefore com-

menced action against the defendant in the Federal High Court, claiming

N2,231,359.00 (two million, two hundred and thirty-one thousand, three hundred

and fifty-nine naira) being special and general damages for breach of contract -

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the sum of N1,231,359.00 being the insurable value of the consignment, as spe-

cial damages and N1,000,000.00 as general damages.

The defendant called no evidence and rested its case on the evidence adduced

by the plaintiff's two witnesses. The trial judge, after considering the evidence,

gave judgment in favour of the plaintiff. The defendant's appeal to the Court of Ap-

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peal was dismissed and so it further appealed to the Supreme Court.

On appeal, it was contended,

inter alia

for the appellant that the two documents

i.

e. the Marine Insurance open cover and the Certificate of Insurance did not either

separately or jointly constitute a policy of Marine Insurance; that the loss of the

consignment before the premium was calculated, demanded or paid, removed

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the liability of the appellant under the marine open cover and Certificate of Insur-

ance, and that on the whole, there was no contract of Marine Insurance in exist-

ence between the appellant and the respondent in respect of the consignment on

board the MN "Eastern Saturn."

HELD:

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1. A policy of Marine Insurance under the Marine Insurance Act, 1961, must

contain the following -

(a)

the name of some party either real or nominally insured.

(b)

a description of the voyage or risk insured

(c)

the subject insured



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(d)

the perils insured against

(e)

the name of the ship (except where the insurance is on ship or ships or on

cargo to be carried by ships unknown)

(f)

the sums insured

(g)

the subscription of the underwriter



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since the marine insurance open cover issued by the appellant to the respond-

ent contained all the above listed information and was also described

ex facie

as a marine policy, it definitely constitued a policy of marine insurance as

defined in the Marine Insurance Act, 1961.

2. Section 24 of the Marine Insurance Act, 1961, expressly stipulates that a contract

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of marine insurance shall not be admissible in evidence unless it is embodied

in a marine policy. Thus, a contract of insurance cannot be proved to exist

unless a policy of marine insurance is produced in evidence.

3. Section 23 of the Marine Insurance Act deals with a specific issue i.e. when a

contract of marine insurance shall be deemed to have been concluded, whilst

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S.24 of the same Act, deals with how a contract of marine insurance is to be

proved.

ΝΙΧΟΝ ς. ΠΟΩΕΡ & ΙΝ∆ΥΣΤΡΙΑΛ ΕΝΓ. ΧΟ

. ΛΤ∆.

3

4.

Α χοντραχτ οφ ινσυρανχε µαψ ινϖολϖε µερελψ α προµισε το παψ τηε πρεµιυµ ανδ

ιτ ισ νοτ τηε λαω τηατ τηερε µυστ βε ιµπλιεδ ιν α χοντραχτ οφ ινσυρανχε α προϖισιον

τηατ τηε ριγητ οφ ινδεµνιτψ βψ τηε ασσυρεδ ισ χονδιτιοναλ ον ηισ πρεϖιουσ παψµεντ

οφ τηε πρεµιυµσ. Ιτ ισ ωιτηιν τηε ιντενδµεντ οφ σεχτιονσ 23 ανδ 32(1) οφ τηε

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Μαρινε Ινσυρανχε Αχτ, 1961, τηατ α πολιχψ οφ µαρινε ινσυρανχε χαν νεχεσσαριλψ

βε χονχλυδεδ βεφορε τηε παψµεντ οφ πρεµιυµ.

5.

Τηατ τηε χοντεντιον οφ τηε αππελλαντ τηατ τηερε ωασ νο χοντραχτ οφ ινσυρανχε ιν

εξιστενχε βετωεεν ιτ ανδ τηε ρεσπονδεντ ιν ρεσπεχτ οφ τηε χονσιγνµεντ ον βοαρδ

τηε ΜΝ ∀Εαστερν Σατυρν∀, ισ φαλσε, ασ α χοντραχτ οφ ινσυρανχε, ασ δεφινεδ βψ Σ.23

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οφ τηε Μαρινε Ινσυρανχε Αχτ 1961, σιµπλψ µεανσ τηε αχχεπτανχε βψ τηε ινσυρερ

οφ τηε ινσυρανχε προποσαλ οφ τηε ασσυρεδ ∀ωηετηερ τηε πολιχψ ισ τηεν ισσυεδ ορ

νοτ∀. Τηισ δεφινιτιον, ιν τηε λιγητ οφ τηε εϖιδενχε, µεανσ τηατ α βινδινγ ανδ ϖαλιδ

χοντραχτ οφ ινσυρανχε χαµε ιντο βεινγ ιν µιδ−ϑανυαρψ 1978. Το αλλοω τηε

αππελλαντ το γετ αωαψ ωιτη ηισ χοντεντιον, ωουλδ µεαν τηατ αν ινσυρερ ωιλλ βε

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αλλοωεδ το εσχαπε λιαβιλιτψ ιν ανψ σιτυατιον βψ φιξινγ αν αρβιτραρψ δατε φορ ηιµσελφ

ον ωηιχη ηισ ρεσπονσιβιλιτψ το τηε ασσυρεδ ωιλλ ατταχη.

6.

Τηε Συπρεµε Χουρτ δοεσ νοτ διστυρβ χονχυρρεντ φινδινγσ οφ φαχτ βψ λοωερ χουρτσ

υνλεσσ ιτ ισ προϖεδ τηατ σοµε µισχαρριαγε οφ ϕυστιχε ορ σοµε ϖιολατιον οφ σοµε

πρινχιπλε οφ λαω ορ προχεδυρε ηασ οχχυρεδ. Νοτηινγ οφ τηε σορτ ηασ βεεν προϖεδ

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ανδ ιν τηε λιγητ οφ τηισ φαχτ ανδ τηε ρεασονσ στατεδ αβοϖε, τηε ϕυδγµεντ οφ τηε

λοωερ χουρτσ αρε αφφιρµεδ ανδ τηε αππεαλ δισµισσεδ.

[Ασ

to admissibility of marine policies,

σεε 25 ΗΑΛΣΒΥΡΨ∋Σ ΛΑΩΣ, 4τη Εδιτιον

33 παρα. 37.]

25

CASES REFERRED TO IN JUDGMENT:

1.

Αβολαδε Αγβοολα Αλαδε ϖ. Σαλαωυ ϑαγυν Ολυκαδε

(1976) 2 Σ.Χ. 183 ατ 189.

2.

∆ιαµονδ Αλκαλι Εξπορτ Χορπορατιον ϖ. Βουργεοισ

(1921) Αλλ Ε.Ρ. Ρεπ. 283 ατ

289.

30

3.

Σχοττ ϖ. Βαρχλαψσ Βανκ Λιµιτεδ

14 Λλοψδ Λ. Ρεπ. 142 ατ 114 & 115.

4.

Ενγλιση Ινσυρανχε

Χο.

ϖ. Νατιοναλ Βενεφιτ Ινσυρανχε Χοµπανψ Λτδ.

(1928) Αλλ

Ε.Ρ. Ρεπ. 441 ατ 443−444; (1929) Α.Χ. 114 ατ 119 & 121.

5.

Ωιλσον Ηο!γατε Χασε

(1920 2 Κ.Β. ατ 7.

6.

Οσικοψα ϖ. Σαλϖαδορ Ηυρταδο Σο!αζ

4 Ω.Α.Χ.Α. 91.

35

7.

Αφριχαν Χοντινενταλ Σεαωαψσ Λιµιτεδ ϖ. Νιγερια ∆ρεδγινγ ανδ Γενεραλ

Ωορκσ Λτδ.

(1977) 5 Σ.Χ. 235, 243, 247− 250.

8.

Εµεγοκωε ϖ. Οκαδιγβο

(1973) 4 Σ.Χ. 113 ατ 117.

9.

Ακπαπυνα ϖ. Οβι Εζεκα λλ

(1983) 7 Σ.Χ. 1 ατ 24 ανδ 62.

10.Φερδινανδ Γεοργε ϖ. Τηε Υνιτεδ Βανκ φορ Αφριχα

(1972) 8−9 Σ.Χ. 274 ατ 273−

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274; (1972) 1 Αλλ Ν.Λ.Ρ. (Παρτ ΙΙ) 347 ατ 353.

11.

Μεταλιµπεξ ϖ. Α.Γ. Λεϖεντισ &

Χο.

(Νιγ.) Λτδ.

(1972) 1 Αλλ Ν.Λ.Ρ. (Παρτ 1)

207.

12.

Γεοργε & Ορσ. ϖ. ∆οµινιον Φλουρ Μιλλσ Λτδ.

(1963) 1 Αλλ Ν.Λ.Ρ. 71 ατ 77.

13.Μαρινε Ινσυρανχε Χο. Λτδ. ϖ. Γριµµερ

(1944) 2 Αλλ Ε.Ρ. 197 ατ 199.

45

14. Πριτχηαρδ ϖ. Μερχηαντ ανδ Τραδεσµεν∋σ Μυτυαλ Λιφε Ασσυρανχε Σοχιετψ

140

Ε.Ρ. 885 ατ 892.

15. Χουτυριερ ϖ. Ηαστιε

(1843−60) Αλλ Ε.Ρ. Ρεπ. 280 ατ 284.

16.Οχεανιχ Στεαµσηιπ

Χο.

ς. Φαβερ

(1907) 23 Τ.Λ.Ρ. 673.

17. Σχοττ ϖ. Χουλσον

(1903) 2 Χη. 249.

50

18.ϑοσεπη

Χονσταντινε Στεαµσηιπ Λινε Λτδ. ϖ. Ιµπεριαλ ΣΜελτινγ Χορπορατιον

Λτδ.

(1941) 2 Αλλ Ε.Ρ. 165 ατ 170.

19.Λιβερχαν Ινσυρανχε Αγενχψ Ινχ. ϖ. Μοσσε

(1977) 2 Λλοψδσ Ρεπ. 560

Q.B.D.

ατ 568.