Haris Marine Products vs. Export Credit Guarantee Corporation (ECGC) Limited
Background
Haris Marine Products, a fish meat and fish oil exporter, took an export credit insurance policy from ECGC effective 14.12.2012, covering a shipment on the vessel "Tiger Mango." The Bill of Lading recorded an "onboard" loading date of 13.12.2012, one day before the policy's effective date, even though the vessel, carrying about 4,000 containers, only actually sailed on 15.12.2012 (as shown by the Mate's Receipt). When the overseas buyer defaulted on payment, ECGC rejected the claim, relying on Directorate General of Foreign Trade (DGFT) guidelines to treat the "onboard Bill of Lading" date as the date of "despatch/shipment," placing it just before the policy's coverage began; the National Consumer Disputes Redressal Commission (NCDRC) upheld this rejection.
Decision Breakdown
The Supreme Court held that the insurance policy's own definition of "despatch", handing over goods to the first carrier for onward carriage, was more naturally read as the date the vessel actually took possession and set sail (15.12.2012), especially since loading thousands of containers took time and could not be treated as instantaneous. It also found that even applying the DGFT Guidelines relied upon by ECGC, the "onboard Bill of Lading" date was only relevant where a Letter of Credit required it, which was not the case here, so even ECGC's own chosen definition did not support its rejection. Given ECGC's dominant, quasi-public position in export credit insurance and that the disputed timing gap was merely one day, the Court set aside the NCDRC's order, allowed the complaint, and directed ECGC to pay the claim of Rs. 2.45 crores with 9% annual interest.
Lesson Learnt
Ambiguous terms in a standard-form insurance policy must be interpreted sensibly and, where genuinely unclear, in favour of the insured rather than the insurer that drafted the policy: an insurer cannot import an external technical definition to defeat a claim on a hyper-technical, one-day timing gap when its own policy language and even that external definition, properly applied, support the claim.