SOMPO INSURANCE SINGAPORE PTE LTD V ROYAL & SUN ALLIANCE INSURANCE PLC

[2021] SGHC 152, High Court of Singapore, Judicial Commissioner Philip Jeyaretnam, 24 June 2021

Insurance (marine) – Subrogation – Whether insurer has a subrogated claim against issuer of performance bond – Marine Insurance Act 1906, section 79(2)

In December 2013 the Government of Singapore entered into a Carriage Contract under which Geometra agreed to transport containers of military cargo by sea. The Carriage Contract required Geometra to lodge an irrevocable and unconditional Performance Bond for 5 per cent of the Contract price. A Performance Bond was duly issued by Sompo in January 2014. Sompo undertook irrevocably and unconditionally to pay the Government up to S$352,700 on receipt of the Government’s first demand in writing. The Government was insured by RSA and other co-insurers under a cargo marine policy. A container was lost overboard while the vessel was unloading. A claim was made against RSA, quantified as $200,945.56 and RSA provided a full indemnity in March 2016. RSA then sought to exercise subrogation rights to claim that sum from Sompo under the Performance Bond.