Extra insurance costs recoverable with proof of payment

Summary prepared by Prokopios Krikris, FCIArb, Arbitrator

One of the issues in this arbitration was whether the additional insurance costs could be recovered. Another issue was whether there was enough reliable evidence to prove that the amounts claimed had already been paid. Similar issues arise in other categories of claims' recovery.

Clause 18 of the contract stated that, “Extra insurance on cargo, if any, due to vessel's age, flag, classification or ownership shall be for Owner's account.” Furthermore, Rider Clause 49 of the contract provided that: “In the event performing vessel is over age, extra insurance on cargo and Charterers' cargo liability insurance are for Owners' account.”

The Charterers relied on a statement from the receivers that the vessel was over the normal insurance rate, and an extra premium applied, citing as well an invoice showing the receivers as the assured and the basis of the extra premium calculation and seeking to recover from the Owners.

The panel held that the Charterers’ claim had a proper basis in contract but absent evidence that they had previously paid the receivers’ extra premium bill ( i.e. lacking proof of payment) they were not entitled to recover.

Note: this is for information purposes only.