IMSML Web Article 28/2026: Sakura Ferroalloys Sdn Bhd v Allianz General Insurance Co (M) Bhd [2025] MLJU 1037 (High Court, KL) - Warranty for ‘Bulk Shipment’ under a Marine Open Cover policy

The case concerned a marine open cover policy which is still common in the export / import trade of goods. This type of marine insurance cover gives the flexibility of declaring what goods need to be covered by the policy when then assured declares the details to the underwriter. In this particular dispute, the subject-matter of the policy was High Carbon Ferro-Manganese (HCFeMn), hereinafter simply referred to as ‘the Cargo’.

The marine policy contained a specific type of warranty for ‘bulk shipment’ of the Cargo. First, a surveyor was to certify loading and/or discharge weight. Second,the equivalent method for calculation for weight should be used at both the load and/or discharge port, unless prevented from doing so by customary practice.

The crux of the dispute centred on the fact that the quantity from the Sakura warehouse that was sent to the final destination was less than that at the load port. At the load port, the figure for the weight was certified by surveyors using a weigh-bridge, ie a truck scale. For the Japan shipment, the discharge was also certified using a weigh-bridge, thus complying with the express warranty of the marine policy. However, this was not possible for the US shipment.

The discharge at New Orleans was instead measured using draught surveys, not a weigh-bridge. At the Mississippi river region, draught surveys were the norm, as it was usual procedure for the cargo to be weighed when the cargo was put onto barges for shipment upriver. Technically, the weigh-bridge method of determining the weight of the Cargo was more accurate.  The drawback of draught surveys is that it could be affected by weather conditions, swells and the accuracy (or lack thereof) of draught marks.

Interestingly, the existence of the customary practice at New Orleans was not disputed by the insurer. This was a well known practice as cargo was moved by barges up the river, then transferred to respective inland destinations. In this part of the US, cargo was only then transported by road for the last mile of delivery. Therefore, draught surveys were the only way to verify the weight of the cargo on barges as it was discharged from ocean going ships.

In conclusion, there was no breach of the ‘bulk shipments’ warranty as using the same method of determining the weight of cargo at the load port, was prevent at the discharge port by customary practice. As evidence of the customary practice was adduced, breach of the warranty could not be established.

Thank you for reading IMSML Web Article 28/2026

Stay tuned for the next IMSML Web Article 29/2026: Sing Young Steel Sdn Bhd v MSIG Insurance (M) Bhd and Others [2025] MLJU 1926 (High Court, Kota Kinabalu) - The ‘Rust, Oxidation and Discolouration’ (ROD) Exclusion Clause in an All Risk Marine Policy

Signing-off for today,

Dr Irwin Ooi Ui Joo, LL.B(Hons.)(Glamorgan); LL.M (Cardiff); Ph.D (Cardiff); CMILT

Professor of Maritime and Transport Law

Faculty of Law

Universiti Teknologi MARA Shah Alam

Selangor, Malaysia

Tuesday,  4 August 2026

Note that I am the corresponding author for the IMSML Website Articles. My official email address is: uijoo310@uitm.edu.my