[1] Where a person who is not specified in an insurance contract as the insured under English law can be recognized as the insured

[2] In a case where Eul corporation, a bareboat charterer of Eul's ship Eul, entrusted with ship management by Eul corporation, the insured under the insurance policy, "owner Gap corporation, manager Byung," entered into an insurance contract including hull insurance contract which covers loss or damage of the ship in relation to the above ship, Gap corporation and Eul corporation, each of which were entitled to legitimate claimant after the occurrence of the insurance accident, sought payment of the insurance money, and paid the insurance money on the ground that the creditors' identity is unknown, the case holding that the English law is the governing law regarding the interpretation of the above insurance contract, but Eul corporation, which is not mentioned as the insured in the insurance policy, cannot be the insured of the above insurance contract in accordance with the "legal principle of undisclosed principal or undisclosed principal" under the English law, and thus, it is just in the judgment below which rejected Eul corporation's assertion that it constitutes the insured under the insurance contract, and there was no error in the misapprehension of legal principles

[1] There are cases where a person who is not specified in an insurance contract under English law as an insured may be recognized as an insured person. In other words, where an agent granted the power to represent the conclusion of an insurance contract by the principal does not identify the principal to the other party, but the other party becomes aware of the existence of the principal as his/her existence was disclosed, the unexploded principal may be entitled to rights and obligations under an insurance contract. In addition, even in cases where the other party who entered into an insurance contract with the agent was unaware of the existence of the principal, even if the agent did not know of the existence of the principal, the agent has the intent to conclude an insurance contract for the principal at the time of the conclusion of the insurance contract after obtaining the power to represent the undisclosed principal and did not prohibit the undisclosed principal from becoming a party to the contract under the terms of the insurance contract (hereinafter “the law of the undisclosed principal or the undisclosed principal”).

[2] In a case where Gap corporation, a bareboat charterer of Eul's ship owned by Eul corporation, entered into an insurance policy with Eul corporation as "owner Gap corporation, manager Byung corporation," the insured under the insurance policy, which included a hull insurance contract covering loss or damage to the ship, and Gap corporation and Eul corporation sought payment of the insurance money as the legitimate claimant after the occurrence of the insurance accident; and Eul corporation claimed payment of the insurance money on the ground that the obligee's identity is unknown, the court affirmed the judgment below's determination that the interpretation of the above insurance contract is governed by the English law, and it cannot be deemed that Byung corporation was aware of the fact at the time of the conclusion of the insurance contract, or that Byung corporation knew of the intent to conclude the insurance contract on behalf of Eul at the time of conclusion of the contract with Eul corporation with the power of representation for the insurance contract, and it is difficult to see that Byung corporation had the intent to conclude the insurance contract on behalf of Eul corporation at the time of conclusion of the contract with Eul corporation, the insured corporation not entered in the insurance policy as the insured cannot become the insured under English law.

[1] Article 25(1) of the Private International Act; Articles 665 and 666 subparag. 7-2 of the Commercial Act / [2] Article 25(1) of the Private International Act; Articles 665 and 666 subparag. 7-2 of the Commercial Act

SPB Korea Co., Ltd. (Law Firm Sejong, Attorneys Kim Chang-joon et al., Counsel for the plaintiff-appellant)

GM Piping Corp (Attorneys Jeong Byung-hee et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2015Na2029365, 2029372 decided January 10, 2017

The appeal is dismissed. The costs of appeal are assessed against the plaintiff (Counterclaim defendant).

The grounds of appeal are examined.

1. Whether the Plaintiff (Counterclaim Defendant; hereinafter “Plaintiff”) is the insured of the instant insurance contract

A. The instant insurance contract includes a hull insurance contract that covers the loss or damage of a ship as an insured event. The instant ship, which is the subject matter of the insurance, is registered in Cambodia, and the Defendant designated as the insured as the owner of the ship, is Pakistan, and thus, the instant insurance contract is governed by the Private International Law. The main text of Article 25(1) of the Private International Act provides that “The contract shall be governed by the law that the parties have chosen explicitly or implicitly.” The English Institute Time Clauses which is applicable to the instant insurance contract provides that “this insurance shall be governed by the English law and customs.” Thus, when the interpretation of the instant insurance contract is at issue, the English law shall be the governing law.

B. There exist cases where a person who is not indicated in a contract of insurance under English law as an insured may be recognized as an insured person. In other words, where an agent granted the power to represent the conclusion of an insurance contract by the principal does not identify the principal to the other party, but the other party becomes aware of the existence of the principal as the principal was exposed to the existence of the principal, the unexploded principal may assume rights and duties under the insurance contract. In addition, even in cases where the other party who entered into the insurance contract with the agent was unaware of the existence of the principal, even if the agent did not know of the existence of the principal, the agent has the intent to conclude the insurance contract on behalf of the principal at the time of the conclusion of the insurance contract after obtaining the power to represent the undisclosed principal and there was no provision prohibiting the undisclosed principal from becoming a party to the contract under the terms of the insurance contract, the exposed principal may assume rights and duties under the insurance contract (so-called “the legal doctrine of the undisclosed principal or the undisclosed principal”).

C. The lower court determined that the right to claim payment of the instant deposit deposited by Hyundai Marine Insurance Co., Ltd. (hereinafter “Modern Marine Insurance Co., Ltd.”) which is the insurer of the instant insurance contract (hereinafter “Modern Marine”) on the ground of creditor uncertainty belongs to the insured under the insurance policy and the Defendant, the owner of the instant ship, who is the owner of the instant vessel. For the following reasons, the lower court rejected the Plaintiff’s assertion that the Plaintiff

(1) On July 6, 2013, the instant insurance contract concluded on the instant vessel, which was a bareboat, by the Plaintiff, to which the management of the instant vessel was entrusted by the Plaintiff (hereinafter “the Plaintiff”). On July 6, 2012, the Plaintiff entered into an insurance contract with respect to the instant vessel with modern sea and the instant vessel. While the insured was the “owner, the manager, and the number of the Plaintiff” in the insurance policy of the instant insurance contract, the insured was changed to the “owner, the manager, and the number of the employees,” while entering into the instant insurance contract, the insured was not due to any error or negligence, but due to consultation between the Plaintiff and the employees in charge of the number of winners. Accordingly, the Plaintiff’s change of the owner in the insured column to the Defendant was to protect the insured interest of the Defendant, the owner of the instant vessel.

(2) At the time of entering into the instant insurance contract, there was no agreement that the Plaintiff is the insured regardless of the entry of the insurance policy in the insurance policy.

(3) One of the important factors in calculating the premium rate in a ship insurance contract is the manager’s ability to manage the ship, and the risk factors, such as the possibility of accidents, vary depending on who the manager is. Accordingly, according to the practice of the ship insurance industry, the manager is inevitably included in the insured column of the insurance policy, and where the manager is changed in the middle, the effect of the insurance under the terms and conditions of the insurance is suspended. Furthermore, the number of passengers engaged in the reduction of the insurance premium by combining various vessels under one’s management at the time of the insurance contract of the instant case as a group of vessels. Accordingly, the number appears to have been indicated as the insured of the instant insurance contract as the manager of the instant vessel, not the Plaintiff’s agent, who is a bareboat charterer, and this conforms to the external appearance indicating the qualification

(4) The fact that the charterer bears the maintenance cost of the vessel, such as the vessel insurance premium, is the general agreement in the bareboat charter, as well as the bareboat charter of this case. Therefore, the Plaintiff cannot be deemed to have paid the insurance premium of the instant insurance contract for the Plaintiff’s interest or to be the Plaintiff’s insured.

D. Examining the reasoning of the judgment below in light of the aforementioned legal principles and records, there is no evidence to deem that the number of passengers at the time of entering into the insurance contract of this case clearly expressed that they would enter into the contract on behalf of arbitrae for modern marine, or that modern marine was aware of such circumstances. Furthermore, it is difficult to deem that the number of winners had the intent to enter into the insurance contract for the Plaintiff at the time of entering into the contract with the power of attorney to conclude the insurance contract of this case granted from the Plaintiff. Therefore, the Plaintiff, which was not indicated as the insured in the insurance policy, cannot be deemed the insured of the insurance contract of this case pursuant to the “legal doctrine of unrealised principal or not exposed principal” under the English law. In this regard, the judgment of the court below which rejected the Plaintiff’s assertion is justifiable, and contrary to

2. Whether the plaintiff's claim for the settlement of insurance money is recognized

For the reasons indicated in its reasoning, the lower court dismissed the Plaintiff’s first preliminary claim seeking the settlement of the instant insurance money on the premise that the “BARECON 2001” form is applied or applicable mutatis mutandis to the instant bareboat charter.

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err in its judgment by misapprehending the facts beyond the bounds of the principle of free evaluation of evidence against logical and empirical rules or by misapprehending the legal doctrine, etc.

3. Interpretation of the bareboat charter of this case and the scope of the defendant's unjust enrichment return

For the reasons indicated in its holding, the court below rejected the Plaintiff’s assertion that the scope of unjust enrichment the Defendant is limited to 19,370,000 United Nations, out of the amount paid by the Plaintiff under the instant bareboat charter contract, the scope of unjust enrichment to be returned to the Plaintiff is limited to 19,370,00 United Nations, and the equivalent amount should also be returned as unjust enrichment, on the premise that the legal nature of the instant bareboat charter contract is added to ownership acquisition condition after the expiration of the charter period, but its substance belongs to the Defendant on the premise that the total amount of insurance money under the instant insurance contract is attributed to the Defendant. In addition, the Plaintiff’

Examining the reasoning of the lower judgment in light of the relevant legal principles and records, the lower court did not err in its judgment by misapprehending the legal doctrine regarding the interpretation of a disposal document, interpretation of the applicable law, and rules of evidence, or by misapprehending the reasoning and inconsistent reasoning.

4. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Jung-hwa (Presiding Justice)