Argoglobal Underwriting Asia Pacific Pte Ltd and others v Oversea-Chinese Banking Corp Ltd [2026] SGCA 14

Case Details

• Citation: [2026] SGCA 14
• Court: Court of Appeal of the Republic of Singapore
• Decision Date: 19 March 2026
• Coram: Sundaresh Menon CJ, Steven Chong JCA and Hri Kumar Nair JCA
• Case Number: Civil Appeal No 18 of 2025
• Hearing Date(s): 21 January 2026
• Appellants: Argoglobal Underwriting Asia Pacific Pte Ltd and others
• Respondent: Oversea-Chinese Banking Corporation Limited
• Counsel for Appellants: Chan Leng Sun SC (Chan Leng Sun LLC) (instructed)
• Counsel for Respondent: Tan Chee Meng SC, Tan Kai Yun, Deya Shankar Dubey, Teo Jen Min, Jayakumar Suryanarayanan, Lim Jingzhen Jerrick and Alexis Loy (WongPartnership LLP)
• Practice Areas: Insurance; Marine Insurance; Evidence

Summary

The Court of Appeal in Argoglobal Underwriting Asia Pacific Pte Ltd and others v Oversea-Chinese Banking Corp Ltd [2026] SGCA 14 addressed the fundamental evidentiary requirements for establishing a claim under a marine insurance policy, specifically concerning "perils of the seas" and "constructive total loss" (CTL). The dispute arose following the capsize of a jackup rig, the "TERAS LYZA" (the "Vessel"), during a tow voyage from Vietnam to Taiwan. The respondent, Oversea-Chinese Banking Corporation Limited ("OCBC"), as mortgagee and co-assured, sought to recover the insured value of US$56m, asserting that the loss was caused by a peril of the seas and that the Vessel constituted a CTL. The High Court initially found in favor of OCBC, but the Court of Appeal reversed this decision in its entirety, providing a definitive clarification on the burden of proof in marine insurance litigation.

A central doctrinal contribution of this judgment is the Court of Appeal's refinement of the "unexplained loss" presumption. The Court held that the rebuttable presumption—that a vessel lost in wholly unexplained circumstances is presumed to have been lost by a peril of the seas—is a narrow evidential tool. It is not an "evidential tool of convenience" for an insured who fails to investigate a casualty. In this case, because the Vessel remained afloat for several weeks after capsizing and was available for inspection, the circumstances were not "wholly unexplained." Consequently, OCBC bore the burden of propounding and proving a specific fortuitous cause for the seawater ingress that led to the capsize. Having failed to do so, OCBC could not establish that the loss was caused by a peril of the seas.

Furthermore, the Court of Appeal conducted a rigorous analysis of the admissibility of evidence under the Evidence Act 1893. The Court rejected the admissibility of various "CTL Documents"—including cost estimates for salvage and repair—under the "business records" exception in s 32(1)(b)(iv). The Court emphasized that for a document to qualify as a business record, it must be created in the ordinary course of a trade or business, rather than for the specific purpose of pursuing an insurance claim or litigation. This aspect of the ruling serves as a stern reminder to practitioners regarding the necessity of calling makers of documents as witnesses unless the strict criteria for statutory exceptions are met.

Ultimately, the Court of Appeal concluded that OCBC failed to prove both the cause of the loss and the quantum required to establish a CTL. The appeal was allowed, the High Court’s judgment was set aside, and OCBC’s claim was dismissed. The decision reinforces the high evidentiary threshold placed upon insured parties and clarifies that the "Sherlock Holmes" approach to inference—eliminating the impossible to leave the "extremely improbable"—cannot substitute for affirmative proof of fortuity in marine insurance claims.

Timeline of Events

1. 12 June 2017: Preliminary events regarding the Vessel's status and preparation for future deployment.
2. 13 June 2017: Further administrative or technical preparations involving the Vessel.
3. 1 August 2017: Continued oversight of the Vessel's condition prior to the 2018 voyage.
4. 29 August 2017: Documentation and assessment of the Vessel's machinery and hull.
5. 25 May 2018: Final preparations for the Tow Voyage from Vung Tau, Vietnam.
6. 30 May 2018: The Vessel, under the tow of the Teras Eden ("Tug"), sailed away from Vung Tau, Vietnam, bound for Taichung, Taiwan.
7. 31 May 2018: The Vessel was in transit; initial stages of the Tow Voyage.
8. 5 June 2018 (3:45 PM): The Vessel developed a list to port and began trimming by the stern.
9. 5 June 2018 (5:50 PM): The Vessel capsized off the coast of the Philippines.
10. 6 June 2018: Initial response to the capsize event; salvors notified.
11. 15 June 2018: Salvage operations commenced; the Vessel was towed in a capsized state toward Batangas Bay, Philippines.
12. 20 June 2018: Ongoing salvage and assessment of the capsized Vessel.
13. 10 July 2018: The Owners (Teras Lyza Pte Ltd) wrote to the Insurers asserting a claim under the MI, claiming the Vessel was a CTL.
14. 11 July 2018: Communication between the parties regarding the status of the Vessel and the validity of the CTL claim.
15. 22 July 2018: Further technical assessments conducted while the Vessel remained afloat.
16. 23 July 2018: Discussions regarding the feasibility of righting the Vessel or its disposal.
17. 25 July 2018: The Insurers disputed the CTL claim, arguing it was premature.
18. 26 July 2018: Continued correspondence regarding the salvage costs and potential repair estimates.
19. 27 July 2018: Finalization of plans for the disposal of the Vessel.
20. 31 July 2018: The Vessel remained in a capsized state pending final disposal orders.
21. 4 August 2018: Final preparations for the deep-water disposal of the Vessel.
22. 18 August 2018: The Vessel was moved to the final disposal site.
23. 20 August 2018: The Vessel was disposed of and submerged by the Salvors in deep water off the Philippines.
24. 16 February 2024: Date of the High Court decision being appealed.
25. 13 March 2025: Procedural milestone in the Court of Appeal.
26. 21 January 2026: Substantive hearing of the appeal before the Court of Appeal.
27. 19 March 2026: The Court of Appeal delivered its judgment allowing the appeal.

What Were the Facts of This Case?

The dispute centered on the "TERAS LYZA", a jackup rig (the "Vessel") owned by Teras Lyza Pte Ltd ("TLPL"). The Vessel was insured under a hull and machinery marine insurance policy (the "MI") issued by five appellant insurance companies (the "Insurers"). The MI had an agreed insured value of US$56m. The respondent, OCBC, was the mortgagee of the Vessel and was named as a co-assured under the MI, alongside TLPL and the vessel manager, Teras Offshore Pte Ltd ("TOPL"). The MI incorporated the Institute Time Clauses (Hulls) 1.10.83 CL 280 ("ITC"), which stipulated that the insurance was subject to English law and practice.

In May 2018, the Vessel was scheduled to undergo a "Tow Voyage" from Vung Tau, Vietnam, to Taichung, Taiwan. This was to be the Vessel's maiden voyage. To prepare for this, the Teras Entities (comprising TLPL, TOPL, and their parent company Ezion Holdings Ltd) conducted feasibility studies and obtained approvals from the American Bureau of Shipping and a marine warranty surveyor, Techwise Offshore Consultancy Pte Ltd. On 30 May 2018, the Vessel departed Vung Tau under the tow of the tug "Teras Eden".

The voyage proceeded without reported incident until 5 June 2018. At approximately 3:45 PM on that day, the Vessel developed a list to port and began trimming by the stern. By 5:50 PM, the Vessel had capsized. Crucially, the Vessel did not sink to the seabed; it remained afloat in an upside-down position. Following the capsize, salvors were engaged, and the Vessel was towed to Batangas Bay in the Philippines. During the weeks that followed, the Vessel remained afloat and was available for inspection by the parties and their respective experts.

On 10 July 2018, the Owners formally notified the Insurers of a claim, asserting that the Vessel was a Constructive Total Loss ("CTL"). They estimated the loss and damage to be in the range of US$76.3m to US$82.6m, which significantly exceeded the insured value of US$56m. The Insurers resisted the claim, arguing that it was premature to declare a CTL and that the cause of the capsize had not been established. Despite the Vessel being available for inspection, no comprehensive underwater survey or forensic investigation was conducted to determine the exact point of seawater ingress. Ultimately, on 20 August 2018, the Vessel was disposed of by being submerged in deep water off the Philippines, effectively ending any possibility of further physical investigation.

OCBC subsequently commenced Suit No 814 of 2021 against the Insurers. OCBC’s primary case was that the Vessel was lost due to "perils of the seas," a covered risk under Clause 6.1.1 of the ITC. They argued that the capsize was a fortuitous event caused by seawater ingress. Alternatively, they relied on a rebuttable presumption of law that where a seaworthy vessel is lost in unexplained circumstances, it is presumed to have been lost by a peril of the seas. Regarding quantum, OCBC claimed the full insured value of US$56m on the basis that the Vessel was a CTL, as the costs of recovery and repair would exceed its value.

The Insurers' defense was twofold. First, they contended that OCBC had failed to prove the cause of the loss. They argued that the "unexplained loss" presumption was inapplicable because the circumstances were not "wholly unexplained"—the Vessel had remained afloat and could have been inspected. Second, they challenged the CTL claim, arguing that the documents OCBC relied upon to prove the costs of repair (the "CTL Documents") were inadmissible hearsay and that, in any event, the evidence did not support a finding that the repair costs would exceed US$56m. The High Court Judge ruled in favor of OCBC, finding that the loss was caused by a peril of the seas and that the Vessel was a CTL. The Insurers appealed this decision to the Court of Appeal.

What Were the Key Legal Issues?

The appeal raised three primary legal issues that required the Court of Appeal's determination:

• The Perils of the Seas Issue: Whether the High Court erred in finding that OCBC had discharged its burden to prove that the loss was caused by a "peril of the seas." This involved determining whether the insured must propound a specific cause for seawater ingress to prove fortuity, and whether the rebuttable presumption of loss by perils of the seas applied to the facts of this case.
• The Admissibility Issue: Whether the "CTL Documents" (including estimates for salvage, righting, and repair) were admissible under s 32(1)(b)(iv) of the Evidence Act 1893 (the "business records exception"). This required the Court to define the scope of "ordinary course of trade or business" and whether documents prepared for the purpose of an insurance claim or litigation could fall within this exception.
• The Constructive Total Loss Issue: Whether, assuming the documents were admissible, OCBC had established on a balance of probabilities that the cost of recovering and repairing the Vessel would exceed its insured value of US$56m, thereby satisfying the statutory definition of a CTL under s 60 of the Marine Insurance Act 1906.

How Did the Court Analyse the Issues?

The Court of Appeal’s analysis began with the Perils of the Seas Issue. The Court noted that under Rule 7 of the Rules for Construction of Policy in the Marine Insurance Act 1906, "perils of the seas" refers only to "fortuitous accidents and casualties of the seas" and excludes the "ordinary action of winds and waves." The burden of proving both the loss and the fortuity rests squarely on the insured.

The Court examined the "Sherlock Holmes" approach discussed in Rhesa Shipping Co SA v Herbert David Edmunds [1985] 1 WLR 948 ("The Popi M"). In that case, the House of Lords held that a court is not bound to choose between two improbable causes; if the insured fails to prove a covered cause on the balance of probabilities, the claim must fail. The Court of Appeal emphasized that "the court cannot simply accept a theory of the cause of the loss just because it is the only one 'on the table'" (at [81], citing Chubb Insurance Singapore Ltd v Sizer Metals Pte Ltd [2023] 1 SLR 1553).

Regarding the rebuttable presumption, the Court clarified its narrow application. The presumption arises only when a vessel is lost in "wholly unexplained" circumstances. The Court reasoned:

"In our view, case law pertaining to direct proof of perils of the seas requires the insured to propound a cause of the seawater ingress to prove the fortuity." (at [44])

The Court found the presumption inapplicable here because the Vessel did not sink; it capsized and remained afloat for weeks. The cause was not "unexplained" in the legal sense; rather, it was "uninvestigated." The Court noted that OCBC and the Owners had ample opportunity to inspect the Vessel but chose not to. Therefore, OCBC could not rely on the presumption to bypass the need to prove a specific fortuitous cause for the ingress. The Court preferred the evidence of the Insurers' experts, noting that without a propounded cause for the ingress, the court could not distinguish between a fortuitous accident and a loss caused by wear and tear or inherent vice (which are not covered).

Next, the Court addressed the Admissibility Issue. OCBC relied on s 32(1)(b)(iv) of the Evidence Act 1893 to admit the CTL Documents without calling their makers. The High Court had allowed this, but the Court of Appeal disagreed. The Court held that "ordinary course of trade or business" refers to the routine, repetitive activities of a business. Documents created for a specific, one-off event—such as an insurance claim following a major casualty—do not fall within this category. The Court observed:

"The CTL Documents were not created in the ordinary course of business... they were prepared for the purpose of the insurance claim." (at [123])

The Court also noted that s 32(1)(b)(iv) requires that the maker of the statement be unavailable. OCBC had not demonstrated that the makers of the estimates (from various salvage and engineering firms) were dead, could not be found, or that their attendance would cause unreasonable delay or expense. Consequently, the CTL Documents were inadmissible hearsay.

Finally, the Court turned to the Constructive Total Loss Issue. Even if the documents were admitted, the Court found OCBC’s quantum evidence lacking. A CTL is established under s 60(2)(ii) of the Marine Insurance Act 1906 if the cost of repairing the damage would exceed the value of the ship when repaired. OCBC’s estimates were found to be speculative. For instance, OCBC included "SCOPIC costs" (Special Compensation P.I. Club Clause) in the repair calculation. The Court expressed doubt as to whether such costs, which relate to environmental protection rather than the physical recovery of the hull, should be included in the CTL arithmetic. Furthermore, the Court found that the High Court Judge had erred in preferring the evidence of OCBC’s expert, Ms. Rosalind Blazejczyk, without sufficient critical analysis of the underlying data. The Court concluded that OCBC had not proved that the repair costs would exceed the US$56m threshold.

What Was the Outcome?

The Court of Appeal allowed the appeal in its entirety. The orders of the High Court were set aside, and OCBC’s claim against the Insurers was dismissed. The Court’s final disposition was stated as follows:

"For the reasons given above, we allow the appeal." (at [152])

In terms of costs, the Court ordered OCBC to pay the Insurers the costs of the appeal, which were fixed at S$100,000 inclusive of disbursements. Regarding the costs of the proceedings in the High Court, the Court of Appeal reserved its decision and directed the parties to file written submissions (limited to ten pages) within three weeks of the judgment date to address that issue. The Court’s decision effectively meant that OCBC recovered nothing under the MI for the loss of the Vessel, as it failed to meet the legal and evidentiary requirements to prove a covered loss or the status of the Vessel as a CTL.

Why Does This Case Matter?

This judgment is of significant importance to the Singapore legal landscape, particularly for marine insurance practitioners and litigation specialists. Its impact can be categorized into three main areas: the burden of proof for perils of the seas, the limits of evidential presumptions, and the strict interpretation of the "business records" exception in the Evidence Act 1893.

First, the case clarifies the "perils of the seas" doctrine. By reinforcing the principles in The Popi M, the Court of Appeal has signaled that Singapore courts will not engage in speculation to assist an insured. The requirement that an insured must "propound a cause" for seawater ingress to prove fortuity is a high bar. It prevents insured parties from simply pointing to the fact of a sinking or capsize and claiming "perils of the seas" by default. This necessitates a proactive and thorough forensic investigation by shipowners and their mortgagees immediately following a casualty.

Second, the Court’s treatment of the "unexplained loss" presumption is a landmark clarification. The distinction between a loss that is "wholly unexplained" and one that is merely "uninvestigated" is crucial. The Court has made it clear that the presumption is reserved for cases where the vessel is truly lost to the depths without witnesses or available wreckage. Where a vessel remains afloat or is accessible, the insured cannot rely on the presumption as a "safety net" for a lack of evidence. This provides much-needed certainty for insurers and encourages transparency and diligence in marine casualty investigations.

Third, the decision on the admissibility of the CTL Documents has broader implications for all civil litigation in Singapore. The Court’s narrow interpretation of s 32(1)(b)(iv) of the Evidence Act 1893 serves as a warning that the "business records" exception is not a catch-all for any document generated by a company. Practitioners must be wary of relying on third-party estimates, reports, or correspondence as business records if those documents were created in response to a specific claim or potential litigation. The judgment reaffirms the primacy of oral testimony and the right to cross-examine the makers of critical evidence.

Finally, the case underscores the importance of the "CTL arithmetic." The Court’s skepticism regarding the inclusion of SCOPIC costs and the requirement for "real" rather than "speculative" repair estimates provides a clearer framework for calculating constructive total loss. For mortgagees like OCBC, the case is a cautionary tale: being a co-assured does not lower the burden of proof, and the failure of the vessel owner to investigate the cause of a loss can directly prejudice the mortgagee's ability to recover under the policy.

Practice Pointers

• Immediate Investigation: In the event of a marine casualty where the vessel remains afloat or accessible, insured parties must conduct an immediate and thorough forensic investigation to identify the specific cause of seawater ingress. Relying on the "unexplained loss" presumption is high-risk and likely to fail if the vessel was available for inspection.
• Evidence Preservation: Ensure that all technical data, surveyor reports, and physical evidence are preserved. The Court of Appeal noted that the disposal of the Vessel (scuttling) before a full investigation was completed contributed to the failure of the claim.
• Witness Availability: When relying on third-party estimates for repair or salvage to prove a CTL, practitioners should prepare to call the makers of those documents as witnesses. Do not assume they will be admissible under the business records exception of the Evidence Act 1893.
• Section 32 Compliance: If seeking to rely on s 32 of the Evidence Act 1893, strictly follow the procedural requirements, including demonstrating that the maker is genuinely unavailable and providing the necessary notices.
• CTL Arithmetic: Be precise in calculating repair costs. Avoid including speculative costs or categories like SCOPIC charges unless there is a clear legal basis for their inclusion in the CTL calculation under s 60 of the Marine Insurance Act 1906.
• Expert Evidence: Ensure that expert witnesses have a solid factual basis for their opinions. The Court of Appeal will scrutinize whether an expert's preference for one theory over another is backed by objective data or is merely speculative.

Subsequent Treatment

As this is a recent decision from the Court of Appeal, its subsequent treatment in later cases is yet to be fully recorded. However, the ratio—that an insured must propound a cause for seawater ingress to directly prove fortuity and that the "unexplained loss" presumption is strictly limited to vessels lost in wholly unexplained circumstances—now stands as the leading authority in Singapore for marine insurance claims involving "perils of the seas." It effectively integrates the principles of The Popi M into Singapore law with greater specificity regarding uninvestigated casualties.

Legislation Referenced

• Evidence Act 1893 (2020 Rev Ed), ss 32(1), 32(1)(b), 32(1)(b)(iv), 32(3), 32(4), 32(4)(b), 32B(2), 32B(3), 47
• Marine Insurance Act 1906 (UK), s 60, s 60(2)(ii), Rule 7 of the Rules for Construction of Policy
• Insurance Act 2015 (UK), s 3, s 11

Cases Cited

• Considered: Rhesa Shipping Co SA v Herbert David Edmunds [1985] 1 WLR 948 ("The Popi M")
• Referred to: Ever Lucky Shipping Co Ltd v Sunlight Mercantile Ptd Ltd [2003] SGHC 80
• Referred to: GTMS Construction Pte Ltd v Ser Kim Koi [2021] SGHC 9
• Referred to: Chubb Insurance Singapore Ltd v Sizer Metals Pte Ltd [2023] 1 SLR 1553
• Referred to: Grace Electrical Engineering Pte Ltd v Te Deum Engineering Pte Ltd [2018] 1 SLR 76
• Referred to: Gimpex Ltd v Unity Holdings Business Ltd [2015] 2 SLR 686
• Referred to: Esben Finance Ltd v Wong Hou-Lianq Neil [2022] 1 SLR 136
• Referred to: Bumi Geo Engineering Pte Ltd v Civil Tech Pte Ltd [2015] 5 SLR 1322
• Referred to: Mycitydeal Ltd v Villas International Property Pte Ltd [2014] 4 SLR 1077
• Referred to: Canada Rice Mills, Ltd v Union Marine and General Insurance Company, Ltd [1941] AC 55
• Referred to: Venetico Marine SA v International General Insurance Co Ltd [2013] EWHC 3644 (Comm)
• Referred to: Ajum Goolam Hossen v Union Marine Insurance Co Ltd [1901] AC 362
• Referred to: Green v Brown (1743) 93 ER 1126
• Referred to: Skandia Insurance Co Ltd v Skoljarev (1979) 26 ALR 1
• Referred to: Anderson v Morice (1874) LR 10 CP 58

Source Documents

• Original judgment PDF: Download (PDF, hosted on Legal Wires CDN)
• Official eLitigation record: View on elitigation.sg