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Anbest Electronic Ltd v Cgu International Insurance Plc

Judgment Cited authorities 5 Cited in Precedent Map Related
Vincent
Judgment Date03 April 2008
Year2008
Citation[2008] 4 HKLRD 202
Judgement NumberHCCL82/2000
Subject MatterCommercial Action
CourtHigh Court (Hong Kong)
HCCL000082A/2000 ANBEST ELECTRONIC LTD v. CGU INTERNATIONAL INSURANCE PLC

HCCL 82/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO. 82 OF 2000

_______________________

BETWEEN
ANBEST ELECTRONIC LIMITED Plaintiff
and
CGU INTERNATIONAL INSURANCE PLC Defendant
(formerly GENERAL ACCIDENT INSURANCE ASIA LIMITED)

_______________________

Before : Hon Stone J in Court

Dates of Hearing: 15, 16, 17, 23, 25, 26 October 2007

Date of Judgment: 3 April 2008

_______________________

J U D G M E N T

_______________________

This action

1. This is a dispute under a policy of marine insurance.

2. In this action the plaintiff, Anbest Electronic Limited (‘Anbest’) claims to recover under a contract of marine insurance covering electronic goods shipped from Hong Kong to Khor Fakkan in the United Arab Emirates (‘UAE’). Khor Fakkan is a small town on the East Indian Ocean coast of the Emirate of Sharjah, outside the Strait of Hormuz, at which there is a port and a container terminal.

3. The contract of insurance is contained in and evidenced by an Insurance Certificate dated 23 December 1998, which was issued by the defendant insurer, then named General Accident Insurance Asia Ltd (now CGU International Insurance Plc) pursuant to Open Cover No. HK-B1789 dated 8 August 1997; that Open Cover named the plaintiff as one of the insured.

4. The insurance in question covered some 600 cartons of electronic goods carried on board the vessel “AL SABAHIA”, and expressly covered all risks as per the Institute Cargo Clauses (A) dated 1 January 1982 (‘ICC (A)), which incorporated the Institute Theft, Pilferage and Non-Delivery Clauses also dated 1 January 1982.

5. By virtue of Clause 19 of the ICC (A) the contract of insurance is expressly governed by English law.

6. The value of the loss is pleaded at US$329,712.80, and there is also an amendment to the Points of Claim specifically to plead a consequential claim arising from monies expended by the plaintiff in terms of “reimbursement of all sums properly and reasonably incurred by the plaintiff” in respect of the legal proceedings instituted in Sharjah subsequent to the loss of the goods the subject of the primary claim.

7. This action, which on its face presents as a relatively straightforward insurance claim, has been vigorously defended from the outset – there have been several contested interlocutory applications, one of which went to appeal – and has resulted in a 6 day trial involving both factual and expert evidence; in this context Mr Sussex SC, who appeared for the plaintiff assured, went so far as to submit that the defendant underwriters had sought to defend this action “by all conceivable means”, the implication being that the divers defences as were mounted to this claim possessed little merit.

The background facts

8. The electronic goods the subject of this loss, and consequential claim, were sold by the plaintiff, Anbest, to a company in the UAE named First Star Electronics (‘First Star’) pursuant to a sales contract negotiated in December 1998, this sale being evidenced by a Commercial Invoice dated 23 December 1998.

9. This was the first transaction which Anbest had done with First Star, which on 18 December 1998 had remitted a deposit of some US$10,000, pursuant to a sale in which D/P terms had been agreed.

10. The electronic goods the subject of this sale left Hong Kong on 24 December 1998 on board the vessel ‘AL SABAHIA’, having been loaded into a container No. CATU 3019704.

11. A bill of lading, No SENUHKG552617, dated 24 December 1998 was issued by DSR-Senator Lines Gmbh; the Shipper was named as Anbest, the Notify Party was named as First Star, and the Consignee was named as Habib Bank AG Zurich (Sharjah Branch). As will be seen, this branch of the Habib Bank has a significant part to play in the sequence of events as ultimately transpired.

12. It is common ground that the vessel carrying these goods arrived at Khor Fakkan on 3 January 1999, and it appears that the container in question was discharged into the Khor Fakkan container terminal either on the date of arrival or on the following day.

13. The undisputed evidence is that the purported buyer of these goods, First Star, obtained actual physical possession of this container from the nearby Sharjah container terminal – whence, without the knowledge of Ambest, it had been transferred from the Khor Fakkan terminal on 7 January 1999.

14. Under the contract of sale, the purchaser was to make payment for the goods by a bill of exchange drawn on First Star, and on 30 December 1998 Anbest had sent all the shipping documents to a finance house, Commonwealth Finance Corporation Ltd (‘Commonwealth Finance’) with a request that it purchase the bill of exchange drawn on First Star “subject to final payment”.

15. The evidence is that Anbest, together with its parent, Thakral Corporation (HK) Ltd (‘Thakral’) – of which relationship much has sought to be made throughout these proceedings – earlier had pre-arranged banking facilities with Commonwealth Finance.

16. In order to obtain discounted payment on the bill of exchange drawn on First Star, the documents so submitted to Commonwealth Finance had included three (3) original bills of lading.

17. In the event, Commonwealth Finance did purchase the bill of exchange, and on the same day had sent the shipping documents to Habib Bank in Sharjah with the instruction that the bank deliver the documents to First Star against payment; in this connection it seems from the documents that Anbest had been given to understand – incorrectly – that Habib Bank in Sharjah were First Star’s bankers.

18. It seems that Habib Bank in Sharjah did receive the shipping documents so remitted by Anbest, probably on 3 January 1999; however, on 6 January 1999 Habib Bank sent a handwritten message to Commonwealth Finance stating that First Star did not maintain an account with them. This message was conveyed by means of a handwritten annotation on top of the Collection Instruction dated 30 December 1998 from Commonwealth Finance to Habib Bank, which Instruction, with annotation, in turn was faxed back to Commonwealth Finance.

19. First Star, the apparent purchaser of these electronic goods, previously had provided to Anbest the number of its ‘account’ with the Habib Bank, and on 7 January 1999 Commonwealth Finance responded to Habib Bank in the terms following:

“…Pls. be advised that the A/C No of First Star Electronics with you is 37017570. Pls. investigate and deliver the docts. to the drawee for payment under advice to us.”

20. To this message there was no reply from the Habib Bank until 25 January 1999, when they stated that the account number as given was incorrect; the response read thus:

“…The A/C number you hv mentioned is incorrect. We tried to approach the Drawee who faxed us that they will open A/C but then did not turn up.

Pls instruct yr docs r held on yr risk and responsibility.”

21. On the following day, 26 January 1999, Anbest asked the shipping line what had happened to its goods, and on the same day Anbest was informed that First Star had taken delivery of the container by means of an original bill of lading indorsed by Habib Bank.

22. In turn, Anbest relayed this information to Commonwealth Finance by letter of 26 January 1999; the second and third paragraphs of this letter read as follows:

“We have been advised by the cargo forwarder that the customer has already taken delivery of the cargo on 5th January 1999 against the ORIGINAL B/L endorsed by Habib Bank AG. (We fax herewith a copy of the front and and rear of the B/L copy for your reference.) Having released documents in this manner, it is very odd for the Habib Bank to now advise that they apparently do not even have an account for the party. Further, this is nearly 3 weeks after you have informed them the account number of the drawee and requested them to deliver documents against payment.

We shall appreciate it if you will kindly take this up strongly with Habib Bank and inform that having released the documents to the drawee, we would not hold them responsible for the payment of the same. Please also request them to remit payment as soon as possible failing which we would have to resort to taking legal action against them…”

23. On receipt of this letter, Commonwealth Finance relayed this information to Habib Bank, which, by telefax dated 27 January 1999, claimed that the shipping documents had not been checked upon receipt but that there were only two (2) bills of lading and no packing lists; this fax concluded thus:

“Please enquire from the Shipping Company how the goods were released without proper authority from the Bank as we have not endorsed any Bill of Lading. Please also note that we are holding the documents at your risk and await your immediate instruction.”

24. A handwritten annotation at the foot of this document was relayed by the Outward Bills department of Commonwealth Finance to Thakral Electronics, the parent of Anbest, for the attention of Mr Mohan “For your information and instructions please.”

25. In the event, Anbest was obliged to repay to Commonwealth Finance the money paid by the finance house to purchase the bill of exchange; this sum, in the amount of US$284,142 was repaid on 26 February 1999, by Thakral Electronics, Anbest originally having purchased from Thakral the electronic goods the subject of this action, and thereby having incurred a corresponding financial liability to Thakral.

26. This liability had been discharged when Thakral was paid by Commonwealth Finance when it purchased the bill of exchange which had been drawn on First Star, and thus when Thakral repaid the money advanced when Commonwealth Finance...

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