IMSML Web Article 30/2026: Kejora Resources Sdn Bhd v Chubb Insurance Malaysia Bhd [2025] MLJU 1417 (High Court, Kuala Lumpur) - Engine Trouble and a Warranty for a Tug to be Properly and Reasonably Maintained, Equipped, Kept Up, Officered and Manned.

The Facts

The subject-matter of the hull and machinery policy was the Malaysian flagged tug ‘Kejora Prosper’. Whilst pushing and holding a container ship, the tug’s main engine encountered a ‘sudden over-speed’. All attempts to stop the engine by pressing the emergency stop button failed. The Chief Engineer had no choice but to rush down to the engine room to manually stop the port main engine locally. However, this could not be carried out as that engine exploded. After the smoke cleared, an inspection discovered that the engine cylinder No.1, connecting rod and crank pin bearing were damaged.

An examination of the tug’s history revealed interestingly facts. A previous Chief Engineer (Hermansyah) had carried out an inspection of the engine. In particular, the governor, which regulates fuel supply and thus speed of the engine, ie maintaining it at steady and safe revolutions per minute. During his inspection, Hermansyah discovered that there was abnormal hunting. This was caused by the small gaps and free play between the mechanical component on the governor’s linkage arrangement. Note that the arrangement connects the throttle, governor and fuel injection system. Hermansyah found a temporary fix for it by fixing a jubilee clip, as there was nothing else available. This clip was later found to be slightly rusty., but the tug’s operations continued without any service disruption. Later, Hermansyah returned to Indonesia.

The hull and machinery policy contained a warranty that the vessel was to be properly and reasonably maintained, equipped, kept up, officered and manned during the currency of the policy. The insurer alleged that a breach of warranty occurred when the insureds did not comply with the manufacturer’s service requirement to overhaul the engine within 15,000 running hours as was the industry norm. The insurer made further allegations about the insured’s failures to do the following: First, monitor running hours of the engine. Second, management system to record and supervise the performance of the engine. Third, overhaul the engine. Fourth, report on time the temporary repairs that were carried out by Hermansyah.

Findings and Decision of the High Court

The cause of the accident was the worn or shear of the governor linkage which was dislodged. However, the threads are not visible to the naked eye and therefore could not be spotted on a visual inspection. The tug’s service manual does not provide specific guidance on how frequently should the governor linkages be inspected and changed. Therefore, in practice, an inspection is only done when there are suspicions about the linkage. Even if an overhaul was done at 15,000, the linkages would not have been opened up. In reality, there was not exact timing. Therefore, the problem would have only been discovered if an overhaul of the governor was conducted during an engine overhaul process.

If there was a breach of warranty, ie if the warranty was not exactly complied with, the result would be an insurer being discharged from liability as from the date of the breach. On the facts of this case, there was no breach of warranty as the manufacturer’s manual merely frames maintenance and inspection schedules as mere guidelines and recommendations, not mandatory requirements. Therefore, failure to overhaul the engine at exactly 15,000 running hours was not a breach of warranty.

Note that the as a harbour tug, the vessel’s Maximum Continuous Rating (MCR) was around 90 percent. Therefore, even at idle, its engine speed was at least 50 percent of the actual recorded running. Engines on tugs like these run up to 18 hours per day. So the Maintenance Schedule can be extended accordingly as the upper limit for the running could be up to 19,492.32 hours. Hence, an implied duty of due diligence as per the International Safety Management (ISM) Code, cannot simply be read into the policy. Further, the ISM Code is not applicable to a tug under 500 gross tonnage.

Thank you for reading IMSML Web Article 30/2026

Stay tuned for the next IMSML Web Article 31/2026: Boustead Cruise Centre Sdn Bhd v Nikmat Mujur Sdn Bhd and Another [2025] MLJU 1416 (High Court, KL) - Res Ipsa Loquitur as a Mere Inference of Negligence, NOT a Presumption of Negligence

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,  1 September 2026

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