Lloyd's Insurance Law Reporter
ENGELHART CTP (US) LLC V LLOYD'S SYNDICATE 1221 FOR THE 2014 YEAR OF ACCOUNT AND OTHERS
[2018] EWHC 900 (Comm), Queen's Bench Division, Commercial Court, Sir Ross Cranston, 23 April 2018
Insurance (marine) - Cargo all risks policy - Goods never shipped to assured - Whether policy covered paper as well as physical losses
In August 2015 the claimant agreed to purchase 7,000 mt of copper ingots from World Gold on CIF China terms, and on the same day the claimant resold the cargo to receivers in China, Shing Fu. In September 2015 both contracts were amended to increase the quantity to 9,000 mt. The first shipment of 7,000 mt of ingots was shipped and delivered to Shing Fu without incident. The claimant paid for the second shipment of just under 2,000 mt. In November and December 2015 102 containers arrived in Hong Kong and some were found to be leaking. The containers were opened in the presence of cargo surveyors and were found to contain slag of nominal commercial value. All of the shipping documents were found to be fraudulent. Shing Fu refused to pay the claimant, and the claimant sought indemnity from cargo insurers under a Marine Cargo and Storage Insurance policy in open cover form running for a year beginning 1 December 2015. The policy was "on goods and/or merchandise and/or cargo and/or interest of all descriptions" and the risks included "leakage and/or shortage and/or difference in weight and/or difference in volume as is appropriate howsoever arising". The policy also had a Container clause stating that: "It is agreed that this Insurance contract is also to pay for shortage of contents", and a Fraudulent Documents clause stating that: "This insurance contract covers physical loss of or damage to goods and/or merchandise insured hereunder through the acceptance by the Assured and/or Shippers of fraudulent documents of title".