Introduction

The issue of the right to reimbursement by insurers is a frequent argument used in the Brazilian courts in cargo claims.

The São Paulo Court of Appeals recently issued a ruling in a redress lawsuit filed by an insurer against an ocean carrier, confirming the lack of proof of subrogation and disregarding the cargo survey carried out unilaterally by the insurer's surveyor.

Facts

The case concerned cargo damage which had allegedly occurred during ocean carriage from Shanghai to Santos. The insurer filed a redress lawsuit against the cargo agent, the port entity and the ocean carrier, seeking reimbursement of the insurance indemnity paid to the consignee.

The first-instance decision granted the claim, holding the defendants jointly liable for the cargo damage, disregarding the defendant's arguments and applying the Consumer Act to the case.

The defendants appealed the decision before the São Paulo Court of Appeals.

Decision

The São Paulo Court of Appeals granted the appeal and overturned the first-instance decision. The judges unanimously confirmed that the claim in question should be rejected due to:

  • the lack of subrogation and the lack of title to sue by the insurer;
  • the absence of legitimacy to sue the defendants;
  • the mishandled survey, unilaterally carried out by insurer's surveyor; and
  • the non-applicability of the rules of the Consumer Act to the case at hand.

Further, the reporting judge highlighted that:

  • the insurance policy presented at court was incomplete; and
  • the document produced unilaterally from the insurer's internal system, with the aim of completing the contract, was inadmissible.

Since the insurance policy was incomplete, and neither established the duration or the value of the cover, there was no proof of the contractual coverage nor regularity of the insurance paid to the consignee. Thus, the courts rejected the bank slip presented as proof of the insurance payment and recognised the insurer's lack of standing to sue and absence of subrogation.

In addition, the court held that the unilateral survey carried out at the insured's headquarters, without the presence of the defendants and outside the port area, had been mishandled and inadequate. The survey was carried out in violation of the terms of the insurance policy, which formally requested for any inspection to be carried out directly after the unloading of the cargo at port.

By contrast, the cargo was only inspected at the consignee's premises following a subsequent inland carriage. As a result, the court determined that it was impossible to identify when and where the damage occurred. Therefore, the survey report was unable to prove a link between the cargo damage and the ocean carriage.

Comment

This decision indicates that the Brazilian courts demand unequivocal proof of subrogation from insurers for an eventual redress lawsuit. Moreover, there must be a clear link between alleged cargo damage and ocean carriage and a joint survey must be carried out directly after the maritime carriage, as this will support the accuracy of the report, preserving the rights of the parties involved.