QUADRA COMMODITIES SA V XL INSURANCE COMPANY SE AND OTHERS

[2023] EWCA CIV 432, Court of Appeal, Sir Julian Flaux, Chancellor, Lord Justice Popplewell and Lord Justice Snowden, 21 April 2023

Insurance (marine) – Cargo claim – Insurable interest – Whether insurable interest existed in part of bulk

Between November 2018 and January 2019 Quadra agreed to buy three quantities of grain from Linepuzzle Ltd, a Ukrainian company in the Agroinvest Group. The cargo was to be transported to and weighed at various elevators (terminals), and payment was against various documents including warehouse receipts. Title to the goods passed on payment. The scheme was found to be fraudulent. The Group obtained grain from local farmers, and stored the grain in elevators, but it was then sold to multiple traders by the use of fraudulent warehouse receipts. Quadra was insured under the Institute Cargo Clauses A 2009 against "physical loss of or damage to goods … through the acceptance … of fraudulent shipping documents, including … Warehouse Receipts"; and "physical damage and/or losses, directly caused to the insured goods by misappropriation". The sum insured was "US$30,000,000 each and every loss, per vessel and/or barges and/or per location", subject to a deductible of "US$10,000,000 any one loss …". Quadra informed its brokers on 13 February 2019, and the brokers informed the insurers the following day. The loss was claimed to be US$5,728,343.51. The insurers denied liability on the grounds of want of insurable interest and also an absence of loss in that the cargoes had never existed.