UMCI Ltd v Tokio Marine: Marine Cargo Insurance Claim for Damaged Semiconductor Equipment

UMCI Ltd, a semiconductor foundry, sued Tokio Marine & Fire Insurance Co (Singapore) Pte Ltd in the High Court of Singapore on 31 October 2008, for damages to a PVD Chamber during shipping from the USA to Singapore. UMCI claimed the damage was covered under a marine cargo insurance policy issued by Tokio Marine. Lee Seiu Kin J ruled in favor of UMCI, finding Tokio Marine liable for US$1,240,000 plus interest, dismissing Tokio Marine's defenses of pre-existing damage, insufficient packaging, inherent vice, fraud, failure to cooperate, and misrepresentation.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Plaintiff

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

UMCI Ltd sues Tokio Marine for damage to a PVD Chamber during shipping. The court found Tokio Marine liable under the insurance contract.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
UMCI LtdPlaintiffCorporationJudgment for PlaintiffWon
Tokio Marine & Fire Insurance Co (Singapore) Pte LtdDefendantCorporationClaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Lee Seiu KinJudgeYes

4. Counsels

Counsel NameOrganization
Leong Kah WahRajah & Tann
Koh See BinRajah & Tann
Derek TanRajah & Tann
Leong Lu YuanAng & Partners
Prakash NairAng & Partners
Gan Seng CheeAng & Partners
Benjamin SeowAng & Partners

4. Facts

  1. The plaintiff is a semiconductor foundry that manufactures advanced process integrated circuits.
  2. The defendant insured a consignment of cargo comprising 26 crates containing various equipment for the plaintiff’s foundry in Singapore.
  3. Three out of the 26 crates were found with obvious signs of physical damage upon arrival in Singapore.
  4. The plaintiff’s claim is in respect of the content of crate no 15, a PVD Chamber, valued at US$1,250,000.
  5. The insurance was provided by the defendant under an open policy of marine cargo insurance.
  6. The amount insured was US$5,830,000, covering all risk of loss or damage to the cargo during the voyage from AMAT’s premises in the USA to the plaintiff’s premises in Singapore.
  7. The damage occurred between the point of handover to China Airlines at DFW and its arrival at Changi Airport.

5. Formal Citations

  1. UMCI Ltd v Tokio Marine & Fire Insurance Co (Singapore) Pte Ltd, Suit 409/2005, [2008] SGHC 188

6. Timeline

DateEvent
Plaintiff began construction of its foundry in Singapore.
Plaintiff engaged Willis to look for an insurer for the project cargo.
TMFI indicated that it was willing to underwrite the risk.
Plaintiff proceeded with the expansion works.
TMFI agreed to underwrite the risk.
Open policy of marine cargo insurance bearing policy no MOP-03-2003 was issued.
Cargo was found to be damaged on arrival in Singapore.
Willis carried out a review of the plaintiff’s position under the policy.
Willis Report was issued.
A copy of the Willis Report was forwarded to the defendant.
Defendant sent an email to Willis stating that the risk control review was acceptable with two changes.
An agreement was finally reached on the rates and deductibles.
Cargo was collected by the freight forwarder from AMAT’s premises at Austin, Texas.
Policy (policy no 02780782) was issued in respect of the Cargo.
Cargo arrived in Singapore.
Mr Ayoubi wrote a letter to Mr Tim Huang, the China Airlines representative at DFW.
Plaintiff filed the writ in this action.
Judgment was given in favour of the plaintiff.
Decision Date

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found the defendant liable under the insurance contract.
    • Category: Substantive
  2. Misrepresentation
    • Outcome: The court found that the defendant had not proved that the representations complained of were untrue and that there was no misrepresentation.
    • Category: Substantive
    • Related Cases:
      • [1994] 2 Lloyd’s Rep 427
      • [1995] 2 Lloyd’s Rep 116
      • [2004] 1 Lloyd’s Rep 111
  3. Disclosure of Documents
    • Outcome: The court was satisfied that the plaintiff had complied with its duty to co-operate with the defendant.
    • Category: Procedural
    • Related Cases:
      • [1996] 2 Lloyd’s Rep 550
      • [1982] 1 NZLR 762
      • [2004] 2 All ER 358

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract
  • Insurance Claim

10. Practice Areas

  • Commercial Litigation
  • Insurance Law

11. Industries

  • Semiconductor
  • Insurance
  • Shipping

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Pan Atlantic Insurance Co Ltd v Pine Top Insurance Co LtdN/AYes[1994] 2 Lloyd’s Rep 427N/ACited for the requirements to avoid liability based on misrepresentation, specifically materiality and reliance.
St Paul Fire & Marine Insurance Co (UK) Ltd v McConnell Dowell Constructors LtdN/AYes[1995] 2 Lloyd’s Rep 116N/ACited for the requirements to avoid liability based on misrepresentation, specifically materiality and reliance.
Glencore International A.G. v Alpina Insurance Company LimitedN/AYes[2004] 1 Lloyd’s Rep 111N/ACited for the requirements to avoid liability based on misrepresentation, specifically reliance.
Napier v UNUM LtdN/AYes[1996] 2 Lloyd’s Rep 550N/ACited for the plaintiff’s duty to co-operate entails taking reasonable steps to provide the defendant with the information and documents sought by the defendant.
Challenge Finance Ltd v State Insurance General ManagerN/AYes[1982] 1 NZLR 762N/ACited for the plaintiff’s duty to co-operate entails taking reasonable steps to provide the defendant with the information and documents sought by the defendant.
Super Chem Products Ltd v American Life and General Insurance Co LtdN/AYes[2004] 2 All ER 358N/ACited for the plaintiff’s duty to co-operate entails taking reasonable steps to provide the defendant with the information and documents sought by the defendant.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Marine Cargo Insurance
  • PVD Chamber
  • Semiconductor
  • Freight Forwarder
  • Pre-shipment Inspection
  • Willis Report
  • Misrepresentation
  • Duty of Good Faith
  • Cargo Checklist
  • Institute Replacement Clause

15.2 Keywords

  • insurance
  • marine cargo
  • semiconductor
  • damage
  • PVD Chamber
  • UMCI
  • Tokio Marine

17. Areas of Law

Area NameRelevance Score
Marine Cargo Insurance80
Insurance75
Misrepresentation70
Contract Law65
Civil Procedure60

16. Subjects

  • Insurance Law
  • Contract Law
  • Commercial Law
  • Shipping Law