Judgment - Reinsurance Focus

contract itself, or the circumstances surrounding the contract,
may show that the agent is the true and only principal.”
17.
In the present case Sea Trucks and CPL were authorised to obtain builders' all risks insurance
on the vessel on behalf of Sembawang and at all material times they both intended to
include Sembawang as a co-assured under the policy. The placing brokers, NMB,
were not aware that Sembawang was to be included as a co-assured and did not intend
that it should be a party to the contract, but, since NMB was merely acting as an agent
to place the insurance, that is not sufficient to prevent Sembawang from enforcing the
contract as an undisclosed principal. What matters for that purpose is the authority
and intention of the person in whose name the contract is made: see Small v United
Kingdom Marine Mutual Insurance Association [1897] 2 Q.B. 42. In these
circumstances the argument was mainly directed to whether the terms of the contract
or the circumstances surrounding it were such as to make it clear that the insurers
were willing to contract only with the person or persons identified as the assureds in
the slip.
The mere identification, whether by name or description, of certain persons as assureds
cannot be sufficient of itself to demonstrate an unwillingness on the part of the insurer
to contract with any other person. If it were otherwise, the principles under discussion
would have no application at all to contracts of insurance. Each case must therefore
be decided by reference to the terms of the contract under consideration and the
circumstances in which it came to be made, though no doubt due regard should be had
to the warning of Lord Lloyd in Siu Yin Kwan v Eastern Insurance Co. Ltd that if the
courts are too ready to construe written contracts as contradicting the right of an
undisclosed principal to intervene it would go far to destroy the beneficial assumption
in commercial cases to which Diplock L.J. referred in Teheran-Europe Co. Ltd v S. T.
Belton (Tractors) Ltd.
Cooke J. considered that the present case was one in which it could properly be said that the
terms of the policy prevented Sembawang from taking the benefit of it as an
undisclosed principal. He put the matter in this way in paragraph 64 of his judgment:
“The insurance was drafted to cover the interest of the Sea
Trucks Group, together with any joint ventures into which the
members of that Group might enter, as the terms of the Assured
clause show. That was the express limitation given to the
Assured and I have found that the wording in the Conditions of
the Slip Policy do not have the effect of extending the
definition of the Assured, save insofar as the insurers agreed to
take into account derivative interests and further Assureds who
fell into the same categories as those in the Assured clause.
The failure to include Sembawang, whether by name, or by
including a category of “builders/outfitters” in a policy which
was designed to cover the ship during the period of outfitting
is, as I have already found, highly significant. If there was no
intention to cover Sembawang directly in the policy, it appears