Award 1242 – Marine cargo insurance policy all risks cover – Theft in a rice cargo during warehousing – Collateral management agreement – Average adjuster – Damage estimate – Unexplained shortage – Lack of evidence – Insured’s fault – Reduction of indemnity.
Further to a theft with breaking in warehouses at Monrovia in a cargo of rice in bags, the Insured claimed to his Insurers an indemnity in reparation of the damage, to which the latter were opposed, asserting the Insured had no right on the goods at the time of the facts therefore had no interest in bringing proceedings.
The arbitral tribunal considered that, even though the cargo was covered by a collateral management agreement and was pledged to banks, the Insured remained its owner. It was observed that, on condition that the goods were stored under a collateral management agreement, the policy extended its cover to theft and unexplained shortage and covered losses on goods due to be sold. However, if the average Adjuster report showed that a certain quantity of goods had disappeared in the warehouses, it did not give of it a precise valuation
for want of getting from the Insured book-keeping data in order to know the exact number of bags sold and those missing. The Tribunal also pointed out that some obligations of the Insured in matter of security of the spot and management of stocks were not fulfilled. It finally decided to award the Claimant 50 % of the figure calculated in the average Adjuster report although the amount of shortage was not precisely well-defined.