Super Chem loses $10M battle in Privy Council

A POINTE-A-PIERRE-BASED company has lost a $10 million insurance battle in the British Privy Council. Super Chem Products Limited had sued American Life and General Insurance Company Limited (ALGICO) for more than $10 million arising out of a fire at their premises which destroyed stock, buildings and equipment. In a judgment delivered on Monday, the British Law Lords dismissed the appeal brought by Super Chem Products Limited and ordered the company to pay costs to ALGICO. The Privy Council comprised Lords Bingham, Steyn, Hope, Rodger and Sir Kenneth Keith. Super Chem Products carried on the business of manufacturing detergents, shampoos, disinfectants, adhesives and other chemically-based products at its business premises at Plaisance Park, Pointe-a-Pierre.

ALGICO insured Super Chem under two policies - one to cover against loss and damage to stock and stores at the premises; and the other for loss or damage to buildings and equipment. Super Chem, which employed 193 persons at the time, was insured to the value of $7.5 million for loss and damage to buildings and equipment. A fire occurred at Super Chem’s premises on April 3, 1990, destroying large parts of the factory, stock, equipment and offices. Claims were presented under both the stock and the consequential loss policies.

By a letter dated October 11, 1991, ALGICO denied liability for the claims. Super Chem began proceedings against ALGICO under the two policies.
ALGICO denied liability on the following grounds:
(1) The fire was caused by arson of, or with the connivance or complicity of Super Chem Products.
(2) Both actions had been commenced out of time. The insurance company claimed that the stock policy action had not been brought within 12 months of the fire. ALGICO also claimed that the claim for loss to buildings and equipment had not been brought within three months of the fire.

According to the stock policy, Super Chem Products should have submitted a claim in writing within 15 days of the fire, stating the items of property damaged or destroyed and the amount of the loss or damage. A condition of the policy stated that Super Chem should have, at their own expense, produced and handed to ALGICO particulars, plans, books, vouchers, invoices and other material with respect to the claim and the origin and cause of the fire and the circumstances under which the loss occurred. It was stated in the policy that no claim could have been entertained unless the terms of the condition had been complied with. After a trial lasting 79 days, Madame Justice Annestine Sealey gave judgment on July 29, 1997.

She dismissed Super Chem’s claims under both policies. Super Chem appealed to the Court of Appeal. By an unanimous judgment dated October 5, 2001, the Court of Appeal comprising Chief Justice Sat Sharma, Justice Roger Hamel-Smith, and Justice Margot Warner, dismissed Super Chem’s appeal. In the judgment, Lord Steyn said it was common ground that Super Chem Products never asked for an extension of the limitation period and that ALGICO never volunteered an extension of time. The Board of the Privy Council agreed with the decisions of Justice Sealey and the TT Court of Appeal and accordingly dismissed Super Chem’s appeal with costs.