Case Details
- Citation: [2026] SGCA 14
- Court: Court of Appeal of the Republic of Singapore
- Date: 2026-03-19
- Judges: Sundaresh Menon CJ, Steven Chong JCA and Hri Kumar Nair JCA
- Plaintiff/Applicant: Argoglobal Underwriting Asia Pacific Pte Ltd and others
- Defendant/Respondent: Oversea-Chinese Banking Corp Ltd
- Legal Areas: Evidence — Admissibility of evidence ; Insurance — Marine insurance
- Statutes Referenced: Evidence Act, Evidence Act 1893, Marine Insurance Act 1906
- Cases Cited: [2003] SGHC 80, [2026] SGCA 14
- Judgment Length: 72 pages, 23,177 words
Summary
This case concerns a dispute over a marine insurance claim for the loss of a jackup rig vessel called "TERAS LYZA" ("the Vessel"). The Vessel capsized during a tow voyage from Vietnam to Taiwan, and the owner, Oversea-Chinese Banking Corp Ltd ("OCBC"), claimed that the loss was caused by perils of the sea and that the Vessel was a constructive total loss ("CTL"). The five appellant insurance companies ("the Insurers") disputed OCBC's claims. The key issues were whether OCBC had proved that the loss was caused by perils of the sea, and whether OCBC had established that the Vessel was a CTL. The Court of Appeal ultimately found in favor of the Insurers on both issues.
What Were the Facts of This Case?
OCBC was the mortgagee of the Vessel, which was a jackup rig built sometime before 2018. The Vessel was insured under a hull and machinery marine insurance policy ("the MI") issued by the Insurers, with OCBC named as a co-assured alongside the vessel owner Teras Lyza Pte Ltd ("TLPL") and the vessel manager Teras Offshore Pte Ltd ("TOPL").
The Vessel was preparing to embark on its maiden voyage, a tow voyage from Vung Tau, Vietnam to Taichung, Taiwan ("the Tow Voyage"). The Teras Entities, comprising TLPL, TOPL, and their parent company Ezion Holdings Ltd, undertook an internal feasibility study and obtained the necessary approvals and certifications from the American Bureau of Shipping and a marine warranty surveyor, Techwise Offshore Consultancy Pte Ltd, for the Tow Voyage.
On 30 May 2018, the Vessel, under the tow of the Teras Eden ("the Tug"), sailed away from Vung Tau. However, on 5 June 2018, the Vessel developed a list to port and trimming by the stern, and eventually capsized at 5.50pm the same day.
After the capsize, salvors were contracted to salvage the Vessel, which was towed to Batangas Bay, Philippines while in a capsized state. The Owners then wrote to the Insurers on 10 July 2018, asserting a claim under the MI for loss and damage of the Vessel in the range of US$76.3m to US$82.6m, and claiming that the Vessel was a CTL. The Insurers disputed the claimed figures and stated that it was premature to conclude that the Vessel was a CTL.
What Were the Key Legal Issues?
The two key legal issues in this appeal were:
1. Whether OCBC had proved that the loss of the Vessel was caused by perils of the sea, which would engage the marine insurance policy.
2. Whether OCBC had established that the Vessel was a CTL, which would entitle OCBC to recover the insured value of the Vessel under the policy.
How Did the Court Analyse the Issues?
On the first issue, the Court of Appeal examined the applicable legal framework for proving loss by perils of the sea. The court noted that the law has developed a rebuttable presumption that the loss of a vessel was caused by perils of the sea if the shipowner is able to prove that the vessel was seaworthy and that the loss occurred in "wholly unexplained" circumstances.
However, the court found that this presumption was not applicable in the present case, as the Vessel did not sink but rather capsized and remained afloat for a number of weeks. During this period, the Vessel was inspected but no steps were taken to investigate the cause of the capsize, and no evidence was adduced that the cause could not have been ascertained.
The court held that OCBC had failed to propound a cause for the seawater ingress that led to the capsize, and therefore had not discharged its burden of proving that the loss was caused by a peril of the sea.
On the second issue, the court examined the evidence presented by OCBC to establish that the Vessel was a CTL. The court found that the cost estimates and other documents relied upon by OCBC were not admissible as business records under the Evidence Act, as they were not made in the ordinary course of trade or business.
Additionally, the court found that the available evidence did not prove that the cost of recovery and/or repair of the Vessel exceeded its insured value, and therefore OCBC had failed to establish that the Vessel was a CTL.
What Was the Outcome?
The Court of Appeal allowed the Insurers' appeal and held that:
1. OCBC had failed to prove that the loss of the Vessel was caused by perils of the sea, and therefore the marine insurance policy was not engaged.
2. OCBC had failed to establish that the Vessel was a CTL, and therefore was not entitled to recover the insured value of the Vessel under the policy.
As a result, the Court of Appeal set aside the judgment of the High Court and dismissed OCBC's claim against the Insurers.
Why Does This Case Matter?
This case is significant for several reasons:
1. It clarifies the legal framework for proving loss by perils of the sea in marine insurance claims, particularly the requirements for invoking the rebuttable presumption. The court emphasized that the presumption is not intended to be an "evidential tool of convenience" and can only be relied upon where the loss occurred in "wholly unexplained" circumstances.
2. The case highlights the importance of investigating the cause of a marine casualty, even if the vessel remains afloat. The court's reasoning suggests that a shipowner cannot simply rely on the presumption of loss by perils of the sea if it fails to take reasonable steps to ascertain the cause of the loss.
3. The court's analysis of the admissibility of the cost estimates and other documents relied upon by OCBC to establish the Vessel's CTL provides guidance on the application of the business records exception under the Evidence Act.
Overall, this case underscores the high evidentiary burden that an insured must meet to successfully recover under a marine insurance policy, particularly in cases where the circumstances surrounding the loss are not entirely clear.
Legislation Referenced
Cases Cited
- [2003] SGHC 80
- [2026] SGCA 14
- Rhesa Shipping Co SA v Herbert David Edmunds [1985] 1 WLR 948 ("The Popi M")
Source Documents
This article analyses [2026] SGCA 14 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.