Vietnamese insurance company Bao Minh has been sued by a local shipbuilder for allegedly denying an insurance claim of US$4.1m for damages caused by a storm in 2009, VnExpress reported recently. According to the Dung Quat Shipbuilding Industry Company (DQS), a unit of state-owned oil and gas group PetroVietnam, the companies signed a two-year contract in 2006 under which the shipbuilder was required to pay a total premium of VND4.7bn ($228,700) to have a business project covered.
The contract stipulated that DQS had to pay half of the premium, or around VND2.4 billion, within the first 15 days. The rest of the money would be paid on the project completion. DQS, however, paid only VND2bn. But it noted that during the two-year term of the contract, Bao Minh never issued any document to end the contract on grounds that the shipbuilder failed to hold up its end.
When the contract expired in December 2008, DQS was still working on the project to build an oil tanker of 100,000 tons. As a result, it agreed to an additional premium fee of VND2.5bn to have the contract extended through February 2010.
During this extension period, on September 28, 2009, a major storm hit the central region and caused damage to the ship. The loss was valued by assessment company Matthews Daniel at around $4.1m, VnExpress reported. DQS insisted that the claim was covered under the policy, but Bao Minh denied it, arguing that its client did not fulfill the payment obligation in the first place.
[mappress]
Source: seatrade-asia, May 18, 2011;