ABID AZIZ SHEIKH, J. This appeal has been filed under section 124(2) of the Insurance Ordinance, 2000 (Ordinance) against the judgment and decree dated 19.2.2021 (impugned judgment) passed by learned Insurance Tribunal, Faisalabad (Tribunal) whereby the insurance petition of the respondent was accepted/decreed.
2. Relevant facts are that respondent is a private limited company engaged in manufacturing of textile products. The respondent exported 353 bales having 3530 dozens of bed sheets weighing 18695 Kgs to its customer from Faisalabad to USA Atlanta vide invoice dated 18.5.2018. The respondent approached the appellant for the issuance of Marine Insurance Policy which was issued on 31.5.2018 (Marine Policy). The goods were lifted from the warehouse at Faisalabad to Karachi on 12.5.2018 and the same were loaded in the container on 18.5.2018 and after the customs clearance, the Vessel Hansa America (HA) sailed out on 18.5.2018. The goods containers were discharged at Salalah Terminal Oman on 22.5.2018 and further loaded on Vessel namely Gjertrud Maersk Voyage No.821W (GMV) on 09.6.2018. Thereafter, on 01.7.2018 on rail, the said goods were sent to Atlanta Georgia USA and on 16.7.2018 after due process of clearance and payments, the goods were gated out for said destination. The goods were finally received by the customer, who opened the same on 18.7.2018 at his warehouse, however, on said date, the customer informed the respondent through his email that all the goods were wet, damaged and not useable.
Subsequently, vide email dated 30.7.2018, the appellant initially asked surveyor to stop the survey due to clause "J" of the Marine Policy but on 31.7.2018, the appellant emailed surveyor that he may continue with the survey. Finally the claim of the respondent was rejected inter alia on the basis of survey report, that loss was suffered from 22.5.2018 to 26.5.2018 at Salalah Terminal Oman Port, due to Mekunu Hurricane, whereas Marine Insurance Policy was issued on 31.5.2018 and the loss had already taken place six days before the issuance of the Marine Policy. The respondent being aggrieved filed insurance petition which was resisted by the appellant by filing written statement, however. learned Tribunal alter framing of issues and recording of evidence, allowed/decreed the said petition through impugned judgment and decree dated 19.2.2021, for the amount of USS 91,220.14/- along with liquidated damages at the rate 5% under section 118(2) of the Ordinance. The appellant being aggrieved has filed this appeal.
3. Learned counsel for the appellant submits that under proviso to section 115 of the Ordinance, the Tribunal had no jurisdiction in respect of Marine Insurance Policy and exclusive jurisdiction was of the Civil Court. He placed reliance on Mst. Naseem Begum and others v. State Life Insurance and others (2014 SCMR 655), State Life Insurance and others v. Mst. Sardar Begum and others (2017 SCMR 999), The Universal Insurance Company v. Rana Basit Rice Mills and others (2021 CLD 1441), Pattoki Sugar Mills Limited v. Federation of Pakistan and others (2021 PTD 587). He further submits that as per Marine Policy, the amount was payable in United States of America (USA), hence Courts at Pakistan had no jurisdiction. He submits that as per clause 19 of the Marine Policy, the Insurance was subject to English law and practice, therefore, the liquidated damages could not be granted. On merits, he submits that the Marine Policy was issued on 31.5.2018, whereas according to survey report (Exh.P13), the loss already took place on 25/26th of May, 2018. He submits that under clauses 8.1 and 11.1 of the Policy, such claims are not admissible. He further submits that in the Marine Policy, vessel was HA, however, said vessel was changed from HA to GMV, without the consent of the appellant. He adds that even the port of Oman was not mentioned in the Insurance Policy, hence the claim is not covered under the Policy and liable to be rejected, by setting aside the impugned judgment.
4. Learned counsel for the respondent on the other hand submits that proviso to section 115 of the Ordinance does not oust the jurisdiction of the Tribunal. He further submits that as parties are based in Pakistan and the Marine Policy was also executed in Pakistan, therefore, the Courts at Pakistan have the jurisdiction and not the Court at USA. He adds that there is no specific clause in the Marine Policy, whereby the jurisdiction of Courts at Pakistan are ousted or jurisdiction is conferred on Court of any other country. On merits, while supporting the impugned judgment and decree, he submits that the Marine Policy dated 31.5.2018 was vis-a-vis warehouse to warehouse and there was no change of destination or voyage, hence the appellant is bound to pay the insurance claim even if the incident has occurred before 31.5.2018.
5. Arguments heard. Record perused. The first legal question that requires determination is that whether jurisdiction of the Tribunal is ousted in respect of policy of Marine Insurance, under proviso to section 115 of the Ordinance. For convenience, section 115 of the Ordinance is reproduced hereunder:- "115. Application of Pakistan law to policies issued in Pakistan. ---The holder of a policy of insurance issued by an insurer in respect of insurance business transacted in Pakistan after the commencement of this Ordinance shall have the right, notwithstanding anything to the contrary contained in the policy or in any agreement relating thereto, to receive payment in Pakistan of any sum secured thereby and to sue for any relief in respect of the policy in any Tribunal; and if the suit is brought in Pakistan any question of law arising in connection with any such policy shall be determined according to the law in force in Pakistan: Provided that nothing in this section shall apply to a policy of marine insurance".
Plain reading of section 115 of the Ordinance shows that it is a non-obstante clause, which provides that notwithstanding anything to the contrary contained in the policy or in any agreement relating thereto, the holder of the insurance policy issued by an insurer in respect of insurance business transacted in Pakistan after the commencement of the Ordinance, shall have the right to receive payment in Pakistan of any sum secured thereby and to sue for any relief in respect of the policy in any Tribunal. Further if suit is brought in Pakistan, any question of law arising in connection with any such policy shall be determined according to the law in force in Pakistan. However, there is an exception to this section by way of proviso that this section shall not apply to a policy of Marine Insurance. This simply means that if in the Marine Insurance Policy, it is specifically provided that payment can be received or suit can be filed in any other country, this non-obstante provision of section 115 of the Ordinance will not override such Marine Insurance Policy. The obvious purpose of proviso to section 115 of the Ordinance is to avoid any kind of interference with the normal business of Marine Insurance, in as much as Marine Insurance contracts are international in scope and most of the time are for the benefit of the consignees abroad who have option of stipulating clause in the Marine Insurance Policy mentioning place where such contracts are intended to be carried out between the parties.
6. Further section 115 of the Ordinance neither confer nor oust the jurisdiction of Tribunal. The relevant section which deals with the power and jurisdiction of Tribunal is section 122 of the Ordinance. For ready reference, relevant clauses of sections 122(1)(a), 122(3) and section 2(xxvii), section 2(xiv) are reproduced hereunder:- "122. Powers of Tribunal.--- (1) A Tribunal shall: (a) in the exercise of its civil jurisdiction, have in respect of a claim filed by a policy holder against an insurance company in respect of, or arising out of a policy of insurance, all the powers vested in a civil Court under the Code of Civil Procedure, 1908 (Act V of 1908);
(3) No Court other than a Tribunal shall have or exercise any jurisdiction with respect to any matter to which the jurisdiction of a Tribunal extends under this Ordinance, including a decision as to the territorial limits and the execution of a decree, order or judgment passed by a Tribunal: (xxvii) "insurance" means the business of entering into and carrying out policies or contracts, by whatever name called, whereby, in consideration of a premium received, a person promises to make payment to another person contingent upon the happening of an event, specified in the contract, on the happening of which the second-named person suffers loss, and includes reinsurance and retrocession:
(xiv) "policy" means a contract of insurance"; From the above provisions, it is manifest that under section 122 of the Ordinance, the Tribunal shall exercise its civil jurisdiction in respect of a claim filed by the policy holder against the insurance company in respect of or arising out of insurance policy and no Court other than the Tribunal shall have any jurisdiction with respect to any matter to which, the jurisdiction of the Tribunal extends.
The words "insurance" and "policy" are also defined in the Ordinance. From 'conjunctive reading of all these provisions, it can safely be concluded that Marine Insurance Policy also falls within the scope of insurance policy and Tribunal has jurisdiction in respect of Marine Insurance Policy. This legal position is also supported by the fact that Marine Insurance Act, 2018 (Marine Act) was promulgated on 07.2.2018, to provide for the regulation of the business of Marine Insurance but in said Marine Act, no separate forum for adjudication of Marine Insurance claim has been provided, rather section 2(2) of the Marine Act provides that words and expressions not defined in the Marine Act shall have the same meaning as assigned to them in the Ordinance. This leaves no manner of doubt that Marine Act is to be read along with the Ordinance, where the jurisdiction for enforcement of Insurance Policies are exclusively conferred on the Tribunal.
7. The argument that section 115 of the Ordinance is an ouster clause is also defeated by the fact that similar provision was also available under section 46 of the Insurance Act, 1938 (Insurance Act). If the appellant's argument is accepted than which Court had the jurisdiction under the Insurance Act as there was no separate Tribunal constituted under the Insurance Act. Similar section 46 is also available in the Insurance Act, 1938 in India, where while interpreting this provision, the Delhi High Court in Messrs Radiant Overseas Pvt. Ltd v. Insurance Regulatory and Development Authority (AIR 2012 CC 3041) held as under:- "20. At this stage, notice may also be taken of section 46 of the Insurance Act which is as under:- "46. Application of the law in force in India to policies issued in India - The holder of a policy of insurance issued by an insurer in respect of insurance business transacted in India after the commencement of this Act shall have the right, notwithstanding anything to the contrary contained in the policy or in any agreement relating thereto, to receive payment in India of any sum secured thereby and to sue for any relief in respect of the policy in any court of competent jurisdiction in India; and if the suit is brought in India any question of law arising in connection with any such policy shall be determined according to the law in force in India.
Provided that nothing in this section shall apply to a policy of marine insurance."
We have wondered whether the said provision is indicative of extraterritorial operation of Insurance Act. Whether owing to said provision, the foreign insurer can be sued in India. The key words again are insurance business transacted in India?. Moreover, the objects and reasons of the Amending Act of the Year 1944 by which proviso aforesaid was added to Section 46 show that the proviso was added to remove the defect in the said provision which was seriously interfering with the normal business of marine insurers in as much as marine insurance contracts were international in scope and affected mostly for the benefit of consignees abroad who have option of stipulating place where contracts are intended to be carried out. What applies to marine insurance equally applies to insurance policy which we are concerned with".
8. The case law relied upon by learned counsel for the appellant is distinguishable. In case of Mst.
Naseem Begum and others supra, the question was that whether provision of section 115 of Ordinance will apply to policies issued before the commencement of the Ordinance, whereas in case of State Life Insurance and others supra, the issue was regarding determining place of suing under the provision of the Insurance Act in respect of contract of insurance executed when the Insurance Act was operational. Similarly order of this Court in The Universal Insurance Company supra, only reiterated the law settled in State Life Insurance and others case and held that the claim regarding contract of insurance will be covered under the provision of Insurance Act.
9. The argument of learned counsel for the appellant that under the instant Marine Policy, the Court of competent jurisdiction is of USA, is also mis-conceived. Under the Marine Policy, it is merely provided that insurance claim if any are payable in currency of credit premium in US Dollar.
However, this clause or any other clause in the Marine Policy neither specifically confer the jurisdiction to Courts in USA nor oust the jurisdiction of Courts at Pakistan. If this clause is read with section 51 of the Marine Act, it merely enables the insurer to assign the Marine Policy by endorsement to the importer/customer in USA in case the goods are already received and payments are released, before the insurance claim was invoked but it by no stretch of imagination, ousts the jurisdiction of Courts at Pakistan under the Ordinance.
10. Learned counsel for the appellant next argued that under clause 19 of the Marine Policy, the insurance is subject to English Law and practice, therefore, the impugned judgment could not be passed under the Ordinance. This ground has also no legs to stand. The aforesaid clause 19, merely stipulates that the insurance policy shall be subject to English law and practice. This means that if there is any clause in the Marine Policy, which is contrary to English law and practice, than the said law and practice will prevail over it but it does not mean that Courts at Pakistan will apply English Law and Practice while trying the suit filed by the claimant under the Ordinance against the insurance company. If at all that was the intention of the parties, the policy could clearly state that the legal proceedings shall be governed by the English law and practice instead by only making the Insurance Policy subject to English law.
11. Learned counsel for the appellant further argued that under the policy, jurisdiction is of Courts at Karachi or Lahore. This argument is also repelled for the reason that admittedly the appellant and respondent are legal entities having their offices in Faisalabad. The goods were also manufactured and delivered from warehouse at Faisalabad and even Marine Policy was executed in Faisalabad.
Therefore, the Tribunal at Faisalabad had the territorial jurisdiction in the matter. However, in view of above clause, under the Marine Policy, the parties had option to invoke the jurisdiction of Karachi or Lahore Courts, as admittedly the appellant has its regional office in Lahore, whereas goods were dispatched on ship from Port Qasim at Karachi. However, this does not mean that territorial jurisdiction of the Tribunal at Faisalabad has been ousted. The Hon'ble Supreme Court in Multan Electric Power Company and others v. Muhammad Ashiq and others (PLD 2006 Supreme Court 328) held that parties with consent can neither confer nor take away the jurisdiction of Court of competent jurisdiction.
12. Notwithstanding the above discussion, it is also relevant to note that none of the above grounds of lack of territorial jurisdiction or applicability of English law and practice, were ever raised by the appellant before the Tribunal. Therefore, even otherwise. these grounds cannot be raised in this appeal for the first time. In this regard, reliance is placed on Muhammad Boota v. Basharat Ali (2014 CLD 63), Trading Corporation of Pakistan v. Devan Sugar Mills Limited and others (PLD 2018 Supreme Court 828), Malik Muhammad Faisal and others v. State Life Insurance and others (2008 SCMR 456) and Muhammad Rafique v. Qamar Ali and others (2003 MLD 52).
13. Now coming to the merits of the case. The main claim of the appellant is that Marine Policy was issued on 31.5.2018 while insured goods had already been damaged on 25/26th of May, 2018 by Cyclone Mekunu, hence claim is not payable. The issue No.1 relates to the aforesaid question and to support their respective claim, the parties have produced their oral as well as documentary evidence. On this issue, the perusal of relevant documentary evidence shows that though Marine Policy (Exh.P5) was issued on 31.5.2018, however, in said policy the cover was from warehouse to warehouse. Admittedly, goods lifted from respondent's warehouse, Faisalabad on 12.5.2018 much before Marine Policy issue date. Further the date of sailing on Marine Policy has been mentioned as 20.5.2018 by Voyage from Port Qasim, Pakistan to Atlanta Georgia, USA. This shows that Marine Policy meant to cover the period before policy date i.e. with effect from, when goods left the warehouse. No doubt, the vessel, stopped in Salalah Port Oman on 22.5.2018 due to Cyclone Mekunu and goods/assignment left for Atlanta Georgia USA in another vessel namely GMV on 09.6.2018 and the surveyor in its report (Exh.P13) stated that the loss occurred on 25/26th of May, 2018, however, on the first page of said survey report, date of loss has been mentioned as 13.6.2018.
Therefore, the survey report on face of it is self contradictory.
14. Further under the Marine Act, merely because the loss occurred before the date of insurance, is itself not sufficient ground to reject the claim. No doubt, under section 20 of the Contract Act, 1872 (Contract Act) where both the parties to an agreement, are under a mistake as to a matter of fact essential to the agreement, the agreement is void. However, the provisions of the Marine Act are exception to aforesaid provision. Under section 31 of the Marine Act read with clause 1 of the schedule, where the subject matter is insured and the loss has occurred before the contract is concluded, the risk remain attached, unless at such time the insured was aware of the loss and the insurer was not. For convenience, clause 1 of the schedule is reproduced hereunder:- "Where the subject-matter is insured "lost or not lost" and the loss has occurred before the contract is concluded, the risk attaches, unless at such time the insured was aware of the loss and the insurer was not".
Similarly under section 8 of the Marine Act, the insured must be interested in the subject matter insured at the time of the loss though he need not be interested when the insurance is effected, however, where subject matter is insured, the insured may recover although he may not have acquired his interest until after the loss, unless at the time of effecting the contract of insurance, the insured was aware of the loss and the insurer was not. These provisions show that in respect of Marine Insurance Policy, claims can be filed for loss occurred even before contract of insurance executed, in exceptional circumstances.
15. The appellant when itself issued Marine Policy on 31.5.2018 from warehouse to warehouse and also clearly mentioned that date of sailing was 20.5.2018, then subsequently it cannot deny the claim of insurance, merely on the presumption that goods were damaged due to rain before the date of issuance of Marine Policy. Even for the sake of argument, it is accepted that goods were damaged on 25/26th of May, 2018, there is nothing placed on record to show that respondent was aware of such damage to the goods and has concealed this fact at the time of issuance of insurance Policy on 31.5.2018. This stance was neither pleaded by the appellant in its defence nor any such suggestion was put by the appellant to the witnesses of the respondent (AW-1 and AW-2) during cross-examination. However, the only claim of the appellant was that as according to survey report, goods were damaged before 31.5.2018, therefore, appellant is not liable to pay/satisfy insurance claim.
16. Sections 18, 19 and 20 of the Marine Act deals with the disclosure and representation. Under said provisions, no doubt there is a duty of fair presentation to the issuer on part of insured. However, in this case, it has not been established that respondent had information regarding occurrence of loss before insurance contract was executed on 31.5.2018. Therefore, even otherwise, respondent case falls within the exceptions of section 31 read with item 1 of the schedule and section 8 of the Marine Act. It is also relevant to note that clause 8.1 of the Marine Policy, support the above legal position and there is no other express provision in the said Policy, whereby section 8 or 31 read with clause 1 of the schedule of the Marine Apt, are excluded or not made applicable to the Marine Policy in hand.
17. Notwithstanding the above legal position, even the survey report shows that the goods became unusable not merely because they got wet during rain on 25/26th of May, 2018, but due to black molding, water stains and foul odor. These defects may have occurred because after rain, goods remained in containers for many days, which were finally opened on 18.7.2018 by the customer.
Therefore, the date of damage may not be the exact same day when there was rain rather the date of damage was required to be determined by the surveyor for the purpose of claim of insurance under the Marine Policy. There is no explanation in the survey report that how many days it took the goods to get affected and damaged due to rain on 25/26th of May, 2018 or whether said damage was before or after 31.5.2018 and further whether damage could be prevented if goods were opened earlier. In these circumstances, the survey report being incomplete and self- contradictory was lawfully not considered by the learned Tribunal.
18. Learned counsel for the appellant vehemently argued that there was no bona fide on the part of the respondent in taking the Marine Insurance Policy on 31.5.2018, when the goods were already sailed out on 20.5.2018. This argument is refuted by number of similar insurance policies issued by the appellant (which are available on record as Mark-A1 to Mark-A11 produced by AW-1), whereby the insurance policies were issued subsequent to the date of dispatchment of goods from the port.
This show that it was a routine practice between the parties that goods were insured after they left for the destination and this particular Marine Policy was not a one time exception to defraud the appellant by concealing any material fact, as argued by the appellant.
19. The next argument of the learned counsel for the appellant is that as voyage and vessel was changed from one mentioned in Marine Policy, therefore, respondent is not entitled for the insurance claim. This argument is baseless and not supported by law or record. In Marine Policy, the voyage has been mentioned from Port Qasim, Karachi, Pakistan to Atlanta Georgia, USA and name of any other via (route) has not been mentioned from where vessel had to travel. As per provisions of section 44 to section 47 of the Marine Act, the change of voyage takes place when the port of destination or the port of departure is changed and there is deviation from the voyage contemplated by the policy. However, in the present case, neither voyage of departure nor destination has been changed, hence there was no change of voyage.
20. So far as the change of carrier/vessel is concerned, no doubt vessel has been changed from HA to GMV but it will not discharge the appellant from insurance claim, as it is not their case that goods were damaged due to change of vessel or there was any defect in the vessel. There is also no provision in the Marine Act or Marine Policy that if vessel is changed, the insurance policy would be repudiated. It is also relevant to note that as per record available when the Marine Policy was issued on 31.5.2018, the vessel was HA and when goods were shipped on 09.6.2018, vessel was neither changed on the request of respondent nor they had any role in the change of said vessel, rather it is the claim of respondent that it had no knowledge about the change of vessel or the goods being stationed at Salalah Terminal Port Oman. Nothing has been placed on record by appellant during evidence to show that respondent had any knowledge about the change of vessel or stoppage of vessel at Salalah Terminal Port Oman, hence it cannot be said that there was any mala fide on part of the respondent or material facts were not disclosed at the time of Marine Policy on 31.5.2018. In view of above discussion, we agree with the finding of learned Tribunal on issue No. 1.
21. Issues Nos. 2 to 5 are interlinked issues which relates to issue No.1 and once it is established that respondent has lawfully invoked its claim for Marine Policy against the appellant, which was also duly established, the other issues were also rightly decided by learned Tribunal in favour of the respondent.
22. In view of above discussion, impugned judgment is well reasoned and no illegality or infirmity is found in the said judgment. Accordingly, this appeal is dismissed with no order as to costs.