CASE LAW NO. 35/2020/AL On the validity of a property insurance contract in cases where the policyholder pays the insurance premium after the premium payment period has elapsed (Please note that this image is not related to the specific case being discussed).

CASE LAW NO. 35/2020/AL

On the validity of a property insurance contract in cases where the policyholder pays the insurance premium after the premium payment period has elapsed

Approved by the Judicial Council of the Supreme People’s Court on February 5^th, 2020, and published under Decision No. 50/QĐ-CA on February 25^th, 2020, by the Chief Justice of the Supreme People’s Court.

Source of the Case Law:

The Cassation Decision No. 28/2018/KDTM-GDT dated June 26^th, 2018, of the High People’s Court in Hồ Chí Minh City regarding the business and commercial case of “Insurance Contract Dispute” in Đồng Nai Province between the plaintiff, Limited Liability Company N, and the defendant, Joint Stock Insurance Corporation P; with interested parties including Insurance Company P1, Joint Stock Commercial Bank V, and Joint Stock Paper Company S.

Location of the Case Law’s Content:

Paragraphs 4 and 5 of the “Court’s Opinion” section.

Summary of the Case Law:

– Case Background:

Once the stipulated premium payment period for the property insurance contract had elapsed, the policyholder paid the insurance premium to the insurance company. The insurance company did not raise any objections or provide formal notice to the policyholder about contract termination. Instead, they took the premium, issued a value-added tax invoice, and recorded the premium payment for tax purposes. Later, an insured event occurred.

– Legal Resolution:

Under these circumstances, the insurance contract remains valid, and the insurance company is responsible for providing compensation to the insured party for any incurred damages.

Relevant Legal Provisions:

– Articles 285 and 287 of the 2005 Civil Code (corresponding to Articles 278 and 354 of the 2015 Civil Code);

– Articles 15 and 23 of the 2000 Insurance Business Law (amended and supplemented in 2010).

Keywords:

“Property insurance contract”; “Insurance premium”; “Premium payment period”; “Validity of the insurance contract”; “Insured event”; “Damage compensation”.

CASE DETAILS

According to the complaint, the authorized representative of the plaintiff stated:

The company known as Limited Liability Company N (referred to as Company N) was established and is currently operating under Business Registration Certificate No. 3600686844, which was issued by the Department of Planning and Investment of Đồng Nai Province on July 29^th, 2004. The sixth amendment to this certificate was registered on September 4^th, 2015.

Company N is the insured party, and Insurance Company P1 (hereinafter referred to as P1 Insurance) is the insurer. They signed seven boiler insurance contracts and public liability insurance contracts as follows:

1. Boiler Insurance Contract No. P-15/DNI/XCG/3201/0005 dated March 24^th, 2015, which includes the following: Insurance Certificate – Boiler Insurance No. P-15/DNI/XCG/3201/0005 dated March 24^th, 2015;Premium Payment Reminder dated March 24^th, 2015; Supplementary Clauses; Boiler Insurance Terms, whereby Company N is insured by P1 Insurance:

– For material damage: Biomass Boiler (commonly known as HÒA VIỆT BOILER) with an insured amount of VND 6,500,000,000.

– For third-party liability: Liability limit of VND 1,000,000,000 per incident and throughout the insurance period, including:

– For individuals:

+ Per person: VND 20,000,000 per incident.

+ Total for all individuals: VND 200,000,000 per incident and throughout the insurance period.

– For property: VND 2,000,000,000 per incident and throughout the insurance period.

– Insured Location: Joint Stock Company H (hereinafter referred to as Company H); address: Ward 8, L Street, B City, Đồng Nai Province.

– Insurance Beneficiary: Joint Stock Commercial Bank V – Branch B (Bank V – Branch B).

– Insurance Period: From April 1^st, 2015, to March 31^st, 2016. (Hereinafter referred to as Contract No. 0005).

2. Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009, dated March 24^th, 2015, which includes the following: Public Liability Insurance Certificate No. P-15/DNI/XCG/3303/0009, dated March 24^th, 2015;Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009, dated March 24^th, 2015; Premium Payment Reminder dated March 24^th, 2015; Public Liability Insurance Terms; Amended and Supplementary Clauses for Public Liability Insurance, whereby Company N is insured by P1 Insurance for an amount of VND 21,000,000,000 for each loss event and for the entire year (Person limit: Not exceeding VND 20 million/person/incident).

– Insurance Scope: P1 insurance provides coverage for liabilities arising from bodily injury or property damage to third parties, for which Company N is legally obligated to pay, resulting from incidents related to N Company’s business activities during the insurance period.

– Insured Location: At Company H; address: Ward 8, L Street, B City, Đồng Nai Province.

– Geographic Scope: Vietnam.

– Insurance Beneficiaries: Bank V – Branch B (Beneficiary 1), Company N (Beneficiary 2).

– Insurance Period: From April 1^st, 2015, to March 31^st, 2016. (Hereinafter referred to as Contract No. 0009).

3. Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26^th, 2015, which includes the following: Insurance Certificate – Boiler Insurance No. P-15/DNI/XCG/3201/0006 dated March 26^th, 2015;Premium Payment Reminder dated March 26^th, 2015; Supplementary Clauses; Boiler Insurance Terms, whereby Company N is insured by P1 Insurance:

– For material damage: Biomass Boiler No. 03 (commonly known as Boiler No. 3), with an insured amount of VND 13,000,000,000.

– For third-party liability: Liability limit of VND 1,000,000,000 per incident and throughout the insurance period, including:

– For individuals:

+ Per person: VND 20,000,000 per incident.

+ Total for all individuals: VND 200,000,000 per incident and throughout the insurance period.

– For property: VND 2,000,000,000 per incident and throughout the insurance period.

– Insured Location: One-member Limited Liability Paper Company S (hereinafter referred to as Paper Company S); address: Industrial Zone M, District T, Bà Rịa – Vũng Tàu Province.

– Insurance Beneficiary: Joint Stock Commercial Bank V – Branch B (Bank V – Branch B).

– Insurance Period: From April 1^st, 2015, to March 31^st, 2016. (Hereinafter referred to as Contract No. 0006).

4. Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26^th, 2015, which includes the following: Public Liability Insurance Certificate No. P-15/DNI/XCG/3303/0010 dated March 26^th, 2015; Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26^th, 2015; Premium Payment Reminder dated March 26^th, 2015; Public Liability Insurance Terms; Amended and Supplementary Clauses for Public Liability Insurance, whereby Company N is insured by P1 Insurance for an amount of VND 21,000,000,000 for each loss and for the entire year (Person limit: Not exceeding VND 20 million/person/incident).

– Insurance Scope: P1 insurance provides coverage for liabilities arising from bodily injury or property damage to third parties, for which Company N is legally obligated to pay, resulting from incidents related to N Company’s business activities during the insurance period.

– Insured Location: At Paper Company S; Industrial Zone M, District T, Bà Rịa – Vũng Tàu Province.

– Geographic Scope: Vietnam.

– Insurance Beneficiaries: Bank V – Branch B (Beneficiary 1), Company N (Beneficiary 2).

– Insurance Period: From April 1^st, 2015, to March 31^st, 2016. (Hereinafter referred to as Contract No. 0010).

5. Boiler Insurance Contract No. P-15/DNI/XCG/3201/0007dated September 30^th, 2015, which includes the following: Insurance Certificate – Boiler Insurance No. P-15/DNI/XCG/3201/0007 dated September 30^th, 2015; Premium Payment Reminder dated September 30^th, 2015; Supplementary Clauses; Boiler Insurance Terms, whereby Company N is insured by P1 Insurance:

– For material damage: Biomass Boiler No. 01 (commonly known as Boiler No. 1), with an insured amount of VND 9,300,000,000.

– For third-party liability: Liability limit of VND 1,000,000,000 per incident and throughout the insurance period, including:

– For individuals:

+ Per person: VND 20,000,000 per incident.

+ Total for all individuals: VND 200,000,000 per incident and throughout the insurance period.

– For property: VND 800,000,000 per incident and throughout the insurance period.

– Insured Location: One-member Limited Liability Paper Company S (hereinafter referred to as Paper Company S); address: Industrial Zone M, District T, Bà Rịa – Vũng Tàu Province.

– Insurance Beneficiary: Joint Stock Commercial Bank V – Branch B (Bank V – Branch B).

– Insurance Period: From October 1^st, 2015, to October 1^st, 2016. (Hereinafter referred to as Contract No. 0007).

6. Boiler Insurance Contract No. P-15/DNI/XCG/3201/0008dated September 30^th, 2015, which includes the following: Insurance Certificate – Boiler Insurance No. P-15/DNI/XCG/3201/0008 dated September 30^th, 2015; Premium Payment Reminder dated September 30^th, 2015; Supplementary Clauses; Boiler Insurance Terms, whereby Company N is insured by P1 Insurance:

– For material damage: Biomass Boiler No. 02 (commonly known as Boiler No. 2), with an insured amount of VND 5,400,000,000.

– For third-party liability: Liability limit of VND 1,000,000,000 per incident and throughout the insurance period, including:

– For individuals:

+ Per person: VND 20,000,000 per incident.

+ Total for all individuals: VND 200,000,000 per incident and throughout the insurance period.

– For property: VND 800,000,000 per incident and throughout the insurance period.

– Insured Location: One-member Limited Liability Paper Company S (hereinafter referred to as Paper Company S); address: Industrial Zone M, District T, Bà Rịa – Vũng Tàu Province.

– Insurance Beneficiary: Joint Stock Commercial Bank V – Branch B (Bank V – Branch B).

– Insurance Period: From October 1^st, 2015, to October 1^st, 2016. (Hereinafter referred to as Contract No. 0008).

7. Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057dated September 30^th, 2015, which includes the following: Public Liability Insurance Certificate No. P-15/DNI/XCG/3303/0057 dated September 30^th, 2015; Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057 dated September 30^th, 2015; Premium Payment Reminder dated September 30^th, 2015; Public Liability Insurance Terms; Amended and Supplementary Clauses for Public Liability Insurance, whereby Company N is insured by P1 Insurance for an amount of VND 21,000,000,000 for each loss and for the entire year (Person limit: Not exceeding VND 20 million/person/incident).

– Insurance Scope: P1 insurance provides coverage for liabilities arising from bodily injury or property damage to third parties, for which Company N is legally obligated to pay, resulting from incidents related to N Company’s business activities during the insurance period.

– Insured Location: At Paper Company S; Industrial Zone M, District T, Bà Rịa – Vũng Tàu Province.

– Geographic Scope: Vietnam.

– Insurance Beneficiaries: Bank V – Branch B (Beneficiary 1), Company N (Beneficiary 2).

– Insurance Period: From From October 1^st, 2015, to October 1^st, 2016. (Hereinafter referred to as Contract No. 0057).

Around 00:30 on November 13^th, 2015, at Paper Company S, an explosion occurred in Boiler No. 3, resulting in:

1. Boiler No. 3 suffered extensive material damage, resulting in the complete destruction of the entire system. Third-party property damage refers to the expenditures incurred by Paper Company S for firefighting, property damage, rebuilding, and loss resulting from machine downtime.
2. Two workers, Mr. Nguyễn Văn C and Mr. Nguyễn Thạnh L, sustained fatal injuries while operating Boiler No. 3.
3. Expenses for the removal, decontamination, transportation, and storage of assets at the site following the explosion of Boiler No. 3.
4. Effect on Boiler No. 2: Boiler No. 2 of Company N sustained partial damage.

At 10:00 on November 13^th, 2015, P Insurance and Company N prepared an on-site report. The Investigation Police Agency of Bà Rịa – Vũng Tàu Provincial Police has formally sought an evaluation to ascertain the root cause of the incident.

On January 13^th, 2016, the Criminal Science Sub-Institute (C54B) of the Ministry of Public Security issued Assessment Report No. 3548/C54B, as reflected in three documents from the Investigation Police Agency of Bà Rịa – Vũng Tàu Provincial Police dated January 26^th, 2016: Notification No. 02/TB-PC44 regarding the decision not to prosecute a criminal case; Investigation conclusion No. 02/KL-PC44 (D3); Notification of the resolution of the crime report No. 02/TB-PC44; and Dispatch No. 100/VKS-P2, dated January 26^th, 2016, from the People’s Procuracy of Bà Rịa – Vũng Tàu Province, concluding the investigation of the crime report.

The conclusion determined that the boiler explosion of Boiler No. 3 was due to a technical fault, and the boiler was still within the inspection period (as certified by the Industrial Inspection Center II, Ministry of Industry and Trade, with the next inspection date being December 17^th, 2016). Thus, the explosion of Boiler No. 3 on November 13^th, 2015, showed no signs of criminal activity.

P1 Insurance has engaged Joint Stock Evaluation Company B, situated at 2.5 P, Ward B, District P, Hồ Chí Minh City, to evaluate the damages resulting from the explosion of Boiler No. 3. The assessment took place on November 17^th, 18^th, 19^th, 20^th, and 28^th, 2015. It involved examining on-site records and identifying damages, such as Boiler No. 3, Boiler houses No. 1 and No. 2, shared equipment used by Boilers No. 1, No. 2, and No. 3, mechanical and electrical damages to Boiler No. 2, third-party property damages at Paper Company S, and the actual cleanup of the site.

Company N compiled and submitted a claim for compensation to Joint Stock Insurance Corporation P and P1 Insurance, based on the following legal grounds:

1. Material Damage to Boiler No. 3: Company N based its claim on Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26^th, 2015, asserting that the explosion of Boiler No. 3 fell within the insurance liability of P Insurance, including:

– Boiler No. 3 system: VND 13,886,965,686

– Boiler house No. 3: VND 1,298,476,400

– Fuel-injection equipment and materials (enhancing the use of various fuels): VND 2,519,308,592

– Cleanup costs: Based on Clause 25 regarding Site Cleanup (Limit US$ 100,000) of the Supplemental Clauses of Contract No. 0006, the actual cleanup costs incurred due to the explosion of Boiler No. 3 fell within the insurance liability of P Insurance, including:

+ Dismantling and removal of Boiler No. 3: VND 140,000,000

+ Transportation fees (large trailer): VND 20,000,000

+ Cleanup and minor transport: VND 200,000,000

+ Storage rental for Boiler No. 3: VND 120,000,000

– Total: VND 18,184,750,678

2. Human Casualties: Company N based its claim on Contracts No. 0009, 0010, and 0057, asserting that the explosion of Boiler No. 3, which resulted in the deaths of two individuals, fell within the geographic scope of Vietnam and the public liability insurance of P Insurance, with the actual damages as follows:

– For Mr. Nguyễn Văn C: VND 300,000,000

– For Mr. Nguyễn Thạnh L: VND 333,000,000

– Total: VND 633,000,000

3. Third-Party Property Damage: Company N based its claim on Contracts No. 0009, 0010, and 0057, asserting that the explosion of Boiler No. 3, which caused property damage to third-party Joint Stock Paper Company S, fell within the geographic scope of Vietnam and the public liability insurance of P Insurance, with the total actual damages as follows:

– Property damage and construction costs: VND 90,804,880

– Firefighting costs: VND 24,943,000

– Machine downtime costs: VND 332,010,000

– Compensation to Joint Stock Paper Company S for the gas price difference in November 2015 due to the explosion of Boiler No. 3: VND 1,063,032,472

– Total: VND 1,510,790,352

4. Material Damage to Boiler No. 2: Company N based its claim on Contract No. 0008, asserting that the damage to Boiler No. 2 fell within the insurance liability of P Insurance, with the total damages as follows:

– Mechanical damage: VND 200,000,000

– Electrical damage: VND 300,000,000

– Total: VND 500,000,000

P Insurance’s position:

1. P Insurance denied liability for material damage to Boiler No. 3 and public liability insurance for third-party property damage to Company N, rejecting the validity of Contracts No. 0006 and 0010, as indicated in Dispatch No. 130/P-DNI-CV dated November 24^th, 2015, from P1 Insurance. Additionally, P Insurance denied the validity of Contracts No. 0005 and 0009 through Dispatch No. 136/P-DNI-CV dated December 1^st, 2015. On November 26, 2015, Company N responded with Dispatch No. 01/2015/PHTT-NTN-PHCO ĐN, rejecting P Insurance’s refusal and demanding full compensation for the damages. P Insurance reiterated its refusal in Dispatch No. 135/P-DNI-CV dated December 1^st, 2015, stating that Company N was required to pay the insurance premium before May 1^st, 2015. However, P1 Insurance did not receive the premium until May 7^th, 2015. Based on the payment terms, the contracts had lapsed on May 1^st, 2015, prior to the incident on November 13^th, 2015, and thus were not within P Insurance’s liability. Disagreeing with P Insurance’s refusal, Company N lodged a complaint on December 2^nd, 2015.

P Insurance’s refusal was based on Company N’s lack of legal basis to assert such claims.

1. i) On the Effective Date of the Contract:

According to Article 405 of the Civil Code, “A legally concluded contract shall be effective from the time of its conclusion, unless otherwise agreed upon or provided by law.” The time of contract conclusion is defined as “when the offeror receives the acceptance to conclude the contract” (Clause 1, Article 404) or “when the last party signs the document” (Clause 4, Article 404).

In practice, P Insurance issued insurance certificates for Contract No. 0005 on March 24^th, 2015; Contract No. 0009 on March 24^th, 2015; Contract No. 0006 on March 26^th, 2015; and Contract No. 0010 on March 26^th, 2015, and issued VAT invoices to Company N, receiving the insurance premiums on May 7^th, 2015, with the total premium amount being VND 91,179,000. The parties did not agree otherwise on the effective date of the contracts. Therefore, P Insurance is liable to compensate Company N for the losses according to Clauses 1 and 3 of Article 15 regarding the time when insurance liability arises, as stipulated in the Law Amending and Supplementing Certain Provisions of the Law on Insurance Business 2010.

1. ii) On Termination of the Contract:

According to Clause 2, Article 23 of the Law on Insurance Business, an insurance contract terminates when “the insured fails to pay the insurance premium fully or fails to pay the premium within the agreed time in the insurance contract, unless otherwise agreed by the parties.”

According to the payment terms agreed upon by the parties in the boiler insurance contracts, specifically Contracts No. 0005 and No. 0006, it is agreed that “In case the insured fails to pay the insurance premium fully or fails to pay the premium according to the payment terms of the insurance contract.” According to the payment terms of the boiler insurance contracts, “The insurance premium shall be paid to the insurer by a one-time bank transfer.” Company N paid the insurance premium by a one-time bank transfer with a total amount of VND 91,179,000, which P1 Insurance received in full.

Moreover, “or other payment arrangements agreed upon in writing by the parties, the effectiveness of the insurance contract will automatically terminate on the next day the insured must pay the premium as agreed in the insurance contract or any amendments/supplements attached (if any).” According to Article 23, the supplementary payment terms are additional conditions applied only when they are more favorable to Company N than the originally agreed payment terms in the insurance contract “(without prejudice to the rights of the parties under this policy)”. 

P Insurance’s reasoning and references to deny the validity of the insurance contract and disclaim liability are not favorable to Company N; therefore, the supplementary payment terms have no legal effect. Additionally, the supplementary clauses are part of Contract No. 15/DNI/XCG/3201/0005, not part of Contract No. 0005 (No. P-15/ĐNI/XCG/3201/0005); of Contract No. 15/DNI/XCG/3201/0006, not part of Contract No. 0006 (No. P-15/ĐNI/XCG/3201/0006).

In public liability insurance contracts: Contracts No. 0009 and No. 0010, P Insurance cited Article 5, a clause on the commitment to pay the insurance premium (within 15 days), to invalidate the contracts and disclaim liability for insurance incidents with Company N, which is baseless as it does not relate to Contracts No. 0009 and No. 0010 and is unfavorable to Company N when applying the supplementary clauses (if any):

– The supplementary clauses for public liability insurance are part of Contract No. 15/DNI/XCG/3303/0009, not part of Contract No. 0009 (No. P-15/ĐNI/XCG/3303/0009); and part of Contract No. 15/DNI/XCG/3303/0010, not part of Contract No. 0010 (No. P-15/ĐNI/XCG/3303/0010);

– The clause on the commitment to pay the insurance premium (within 15 days) is a supplementary clause that only applies when it is more favorable than other agreed terms in Contracts No. 0009 and No. 0010, but these contracts do not stipulate the termination of the contract due to delayed payment of the insurance premium.

2. On the Damage to Boiler No. 2:

P Insurance deliberately avoided fulfilling its compensation responsibility for losses under Contract No. 0008 as committed in Section III of Dispatch No. 130/P-DNI-CV dated November 24, 2015.

For the reasons above, the authorized representative of Company N maintained the claims but on September 29^th, 2016, and at the first-instance trial, the plaintiff’s authorized representative requested to withdraw some of the claims as follows:

– Recognize the validity of Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0009 dated March 24^th, 2015, between P1 Insurance and the insured Company N; Joint Stock Insurance Corporation P (P Insurance) must be responsible for compensating Company N for all damages when an insurance incident occurs.

– Recognize the validity of Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0009 dated March 24^th, 2015, between P1 Insurance and the insured Company N; Joint Stock Insurance Corporation P (P Insurance) must be responsible for compensating Company N for all damages when an insurance incident occurs.

– Compensate Company N for public liability insurance for human casualties amounting to VND 633,000,000 according to Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0009 dated March 24^th, 2015; Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0010 dated March 26^th, 2015; and Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0057 dated September 30^th, 2015.

– Exclude overdue penalty interest of 150% in the compensation claim for damages due to delayed performance of insurance compensation obligations by P Insurance.

– Withdraw part of the claim for full compensation of VND 18,184,750,678 to Company N for all losses from the explosion of the Biomass Fluidized Bed Boiler No. 3 under Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26^th, 2015, requesting only VND 13,000,000,000 and VND 200,000,000 for site cleanup.

The authorized representative of Company N maintains the remaining claims and respectfully requests the Court to resolve the matter by compelling Joint Stock Insurance Corporation P (P Insurance) to:

1. Recognize the validity of Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0006, dated March 26^th, 2015, between P1 Insurance and the insured Company N; Joint Stock Insurance Corporation P(P Insurance) must be responsible for compensating Company N for all damages.
2. Recognize the validity of Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0010, dated March 26^th, 2015, between P1 Insurance and the insured Company N; Joint Stock Insurance Corporation P(P Insurance) must be responsible for compensating Company N for all damages.
3. Compensate Company Nfor the total loss of Biomass Fluidized Bed Boiler No. 3 under Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0006, dated March 26^th, 2015, in the amount of VND 13,000,000,000.
4. Cover the site cleanup cost of VND 200,000,000.
5. Compensate Company N for third-party property damage due to the explosion of Boiler No. 3 in the amount of VND 1,510,790,352, according to Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0010, dated March 26^th, 2015, and Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0057, dated September 30^th, 2015.
6. Compensate Company N for the total loss of Biomass Fluidized Bed Boiler No. 2 in the amount of VND 500,000,000, according to Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0008, dated September 30^th, 2015.
7. Compensate for damages due to delayed performance of insurance compensation obligations, starting 15 days from November 19, 2015, until the date of receiving the full valid compensation claim (acknowledged by P1 Insurance in Dispatch No. 130/P-DNI-CV, dated January 24^th, 2015), meaning from December 4^th, 2015, to the first-instance trial date of October 11^th, 2016, at the basic interest rate set by the State Bank: VND 15,210,790,352 x 10 months 07 days x 9%/year = VND 1,167,428,159.

Total (3)+(4)+(5)+(6)+(7): VND 16,378,218,511.

Additional matters for the Court’s consideration:

1. According to Public Liability Insurance Contracts No. 0009, No. 0010, and No. 0057, the authority to resolve disputes belongs to the competent People’s Court as stipulated in Clause 2.3 of the contracts.
2. Regarding boiler insurance contracts, Company N, based on Article 17 of the Law on Commercial Arbitration No. 54/2010/QH12, dated June 17^th, 2010, and Clause 5 of Article 4 of Resolution No. 01/2014/NQ-HĐTP, dated March 20^th, 2014, of the Judicial Council of the Supreme People’s Court, chooses the Court to resolve disputes since the boiler insurance rules, bearing the stamp overlapping with the boiler insurance contracts between P1 Insurance and the insured Company N, include an arbitration agreement.

The authorized representative of the plaintiff agrees with the Valuation Certificate No. 2003/TĐG-CT, dated August 22^nd, 2016, from Joint Stock Evaluation Company Đ and has no other comments. The authorized representative of the plaintiff has been informed by the Court that Mr. Chu Thanh T has the right to request a revaluation if he disagrees with the valuation certificate, but Mr. T has no further comments and requests the Court to resolve the matter according to the law.

There are no additional requests.

The authorized representative of the defendant stated:

1. Opinions on the contents of the claims from item 1 to 7 of Company N as per the lawsuit filed on May 17^th, 2016, are as follows:
2. Boiler Insurance Certificate No. P-15/DNI/XCG/3201/0006 was agreed upon and signed by P1 Insurance and Company Non March 26^th, 2015, in accordance with the law (the insurance contract includes the insurance certificate, premium payment reminder, insurance terms, and supplementary clauses bearing the overlapping stamp of P Insurance). However, during the contract performance, Company N did not fully comply with the contractual commitments, leading to the contract’s termination before the loss occurred, as follows:

According to the payment terms in the insurance certificate and supplementary clause No. 23, the payment deadline is stipulated:

1. According to the term stated in the Insurance Certificate:

“Payment deadline: Within 15 days from March 26^th, 2015.

The payment term stated in the Contract: The insurance premium shall be paid to the insurer by cash, check, or one-time bank transfer. Specifically, as follows:

In case the insured does not pay in full the insurance premium or fails to pay the premium according to the payment terms of the insurance contract or other payment agreements in writing by both parties, the insurance contract’s validity will automatically terminate on the next day the insured must pay the premium as agreed in the insurance contract or any amendments/supplements attached (if any).”

Thus, according to this payment deadline, Company N had to pay the insurance premium to P Insurance before April 10^th, 2015 (this is also clearly stated in the premium payment reminder sent to Company N on March 26^th, 2015).

2) According to Supplementary Clause No. 23: Clause on Payment Commitment for Insurance Premium (30 days):

“1) The parties agree and acknowledge that, notwithstanding any contrary conditions in this insurance certificate, and subject to condition 2 below (without prejudice to the rights of the parties under this certificate), the prerequisite condition binding the liability of P Insurance under the insurance certificate, renewal certificate, supplementary clause, or temporary insurance certificate is that the insured must fully pay any calculated insurance premium, and P Insurance, the broker, or the insurance agent who issued or arranged this insurance certificate must receive the payment within the following payment deadline:

(a) If the insurance term is 30 days or more, payment must be made within 30 days from:

(i) The effective date of the insurance certificate, renewal certificate, or temporary insurance certificate.

(ii) The effective date specified in each supplementary clause (if any) issued under the insurance certificate, renewal certificate, or temporary insurance certificate if the effective date specified falls on or after the issuance date of the supplementary clause.

(iii) The issuance date of each supplementary clause (if any) issued under the insurance certificate, renewal certificate, or temporary insurance certificate if the effective date specified in the supplementary clause occurs before the issuance date.

Or

(b) If the insurance term is less than 60 days, within the declared insurance term in the insurance certificate, renewal certificate, supplementary clause, or temporary insurance certificate.

2) In the event the above-mentioned insurance premium is not fully paid to P Insurance, the broker, or the agent as stipulated by the nature and timing above (insurance premium payment deadline), the insurance effectiveness under the insurance certificate, renewal certificate, supplementary clause, or temporary insurance certificate will be deemed terminated from the expiration date of the insurance premium payment deadline, and P Insurance will be exempt from all liabilities thereafter. In such case, P Insurance will be entitled to the insurance premium proportionate to the effective days of the insurance certificate, but not less than USD 20.”

Therefore, according to this payment deadline, Company N must pay the insurance premium to P Insurance before May 1^st, 2015.

Based on the above payment agreements, Company N had to pay the insurance premium under Boiler Insurance Certificate No. P-15/DNI/XCG/3201/0006 to P Insurance by May 1^st, 2015, at the latest. However, as of May 7^th, 2015, P Insurance received the insurance premium from Company N (7 days late according to Supplementary Clause No. 23 and 26 days late according to the payment clause in the insurance certificate).

Therefore, based on the payment clause in the insurance certificate and Supplementary Clause No. 23; based on item a of Clause 2 of Article 18 and Clause 2 of Article 23 of the Insurance Business Law; and Clause 4 of Article 2 of Circular No. 194/2014/TT-BTC, dated December 17^th, 2014, effective from February 1^st, 2015, of the Ministry of Finance:

The explosion loss of Biomass Fluidized Bed Boiler No. 3 with a capacity of 30 tons/hour under Boiler Insurance Certificate No. P-15/DNI/XCG/3201/0006, which occurred on November 13, 2015, at Company N, located in One-member Limited Liability Paper Company S – Industrial Zone M, District T, Bà Rịa – Vũng Tàu Province, is not within the insurance liability of P Insurance because the insurance contract No. P-15/DNI/XCG/3201/0006 had terminated on May 1^st, 2015, before the loss occurred on November 13^th, 2015.

1. Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 was mutually agreed upon and signed by P1 Insurance and Company Non March 26^th, 2015 (the contract set includes: the insurance contract, insurance terms, and supplementary clauses bearing the overlapping stamp). However, during the contract performance, Company N did not fulfill the commitments, leading to the contract’s termination before the loss occurred, as follows:

According to the insurance certificate and supplementary clause, the payment deadline is stipulated:

1. According to the term stated in the insurance certificate: “Payment deadline: Within 15 days from the issuance of the certificate.”

Thus, according to this payment deadline, Company N had to pay the insurance premium to P Insurance before April 10^th, 2015 (this was also clearly stated in the premium payment reminder sent to Company N on March 26^th, 2015).

2. According to Supplementary Clause No. 23: Clause on Payment Commitment for Insurance Premium: “Notwithstanding any contrary statements herein and solely based on and without prejudice to clause 2 stated below, the parties declare and agree that the prerequisite condition for liability under this insurance certificate, renewal certificate, supplementary clause, or temporary insurance certificate is that any due insurance premium must be paid and received in full by the insurance company, brokers, or registered agents:

(a) If the insurance term is 30 days or more, within 30 days from:

(i) The effective date of the insurance under the insurance certificate, renewal certificate, or temporary insurance certificate, or

(ii) The effective insurance date specified in each supplementary clause, if any, issued under the insurance certificate, renewal certificate, or temporary insurance certificate when the effective insurance date stated therein falls on or after the issuance date of the supplementary clause, or

(iii) The issuance date of each supplementary clause, if any, issued under the insurance certificate, renewal certificate, or temporary insurance certificate when the effective insurance date stated therein occurs before the issuance date.”

(b) If the insurance term is less than 7 days, within the insurance term specified in the insurance certificate, renewal certificate, or temporary insurance certificate.

When any insurance premium mentioned above is not fully paid to the insurance company, broker, or registered agent as described above, by the method and within the time frame specified above (“Insurance Premium Payment Deadline”), the insurance under the insurance certificate, renewal certificate, or temporary insurance certificate will automatically terminate from the effective date of the contract, and the insurance company will be exempt from all liabilities from that date.”

Thus, according to this payment deadline, Company N must pay the insurance premium to P Insurance before May 1^st, 2015.

Based on the above payment agreements, Company N had to pay the insurance premium under Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 to P Insurance by May 1^st, 2015, at the latest. However, as of May 7^th, 2015, P Insurance received the insurance premium from Company N (7 days late according to Supplementary Clause No. 23 and 26 days late according to the payment clause in the insurance contract).

Therefore, based on the payment clause in the insurance contract and Supplementary Clause No. 23; based on item a of Clause 2 of Article 18 and Clause 2 of Article 23 of the Insurance Business Law; and Clause 4 of Article 2 of Circular No. 194/2014/TT-BTC dated December 17^th, 2014, effective from February 1^st, 2015, of the Ministry of Finance.

P1 Insurance is not liable for compensating Company N for third-party liabilities related to the loss caused by the explosion of Biomass Fluidized Bed Boiler No. 3, with a capacity of 30 tons/hour, under Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010, which occurred on November 13^th, 2015, at One-member Limited Liability Paper Company S – Industrial Zone M, District T, Bà Rịa – Vũng Tàu Province, because this insurance contract had terminated as of May 1^st, 2015, before the loss occurred on November 13^th, 2015.

III. Boiler Insurance Certificate No. P-15/DNI/XCG/3201/0008 was mutually agreed upon and signed by P1 Insurance and Company N on September 30^th, 2015 (the contract set includes: the insurance certificate, insurance terms, supplementary clauses, all documents bearing the overlapping stamp of P Insurance). Based on these documents, P Insurance informs as follows:

Contract P-15/DNI/XCG/3201/0008, insuring Biomass Boiler No. 2, has been duly fulfilled by Company N, and therefore P Insurance will consider settling the compensation as per the regulations. This was mentioned by P Insurance in Dispatch No. 130/P-DNI-CV dated November 24^th, 2015. Currently, the appointed evaluation company is conducting its assessment of Biomass Boiler No. 2. Once the results are available, P Insurance will proceed with the compensation as per the regulations.

Regarding the loss of Boiler No. 2, P Insurance does not evade responsibility as claimed by the plaintiff; instead, P1 Insurance is coordinating with Company N and Joint Stock Evaluation Company B to determine the damage value, based on which P1 Insurance will compensate as per the regulations. This matter is currently being resolved; therefore, we request the Court not to consider this claim.

1. Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0009 was mutually agreed upon and signed by P1 Insurance and Company Non March 24^th, 2015, in accordance with the law (the contract set includes: the insurance certificate, premium payment reminder, insurance terms, supplementary clauses bearing the overlapping stamp of P Insurance).

According to this insurance contract, the insured location is Company H, unrelated to the loss occurring at Paper Company S.

Therefore, we request the Court not to consider this claim.

1. Regarding Company N’s request for compensation for employees under Public Liability Insurance Contracts No. P-15/DNI/XCG/3303/0009 dated March 24^th, 2015; Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26^th, 2015; and Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057 dated September 30^th, 2015, we request the Court to dismiss it because public liability insurance contracts do not cover employees or workers employed by the insured.
2. For losses related to third-party liability under Contract No. P-15/DNI/XCG/3303/0057, P1 Insurance is coordinating with Company Nand Joint Stock Evaluation Company B to determine the damage value, based on which P1 Insurance will compensate as per the regulations. This matter is currently being resolved; therefore, we request the Court not to consider this claim.
3. Opinion on claim No. 9 of Company N according to the lawsuit filed on May 17^th, 2016, as follows:

The calculation of interest due to late payment of compensation for all items is groundless for the following reasons:

1) Boiler Insurance Certificate No. P-15/DNI/XCG/3201/0006 and Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 had terminated on May 1, 2015, before the loss occurred on November 13^th, 2015, as clearly stated in Sections I and II of Part A. This means that the calculation of interest due to late payment of compensation is groundless.

2. Boiler Insurance Certificate No. P-15/DNI/XCG/3201/0008, Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057.

On November 24^th, 2015, P1 Insurance issued Dispatch No. 130/P-DNI-CV, stating: “Your company has fulfilled the premium payment obligations as stipulated, and P Insurance will coordinate/guide your company on the next steps to review the scope and insurance liability of the loss items under this insurance certificate.”

After the loss occurred, P Insurance hired Joint Stock Evaluation Company B to coordinate and guide Company N in collecting documentation to determine the cause and extent of the loss, as a basis for considering compensation under this insurance contract (the hiring of the independent appraisal company Joint Stock Evaluation Company B was mutually agreed upon by P Insurance and Company N).

However, to date, Company N has not provided sufficient documentation to substantiate the loss as requested in many dispatches and guided through multiple meetings by Joint Stock Evaluation Company B. P Insurance is responsible for compensation within 15 days from the date of receiving all valid documents in accordance with the Law on Insurance Business, insurance terms, and effective insurance contract. In this case, since Company N has not provided the required documents, P Insurance cannot proceed with the compensation for the loss of Biomass Boiler No. 2 and thus cannot be considered to have delayed the obligation as claimed by Company N in the lawsuit.

3. Regarding the time frame for calculating late compensation claims:

The loss occurred on November 13^th, 2015, whereas Company N’s claim for late compensation is dated January 19^th, 2015. The period mentioned by Company N for calculating interest has no relevance to the loss date, nor to Dispatch 130/PHCO-DNI-CV dated November 24^th, 2015, sent by P1 Insurance to Company N.

4. Regulations on compensation for late payment obligations:

According to the Law on Insurance Business and insurance terms, the insurance company is responsible for compensating the insured within 15 days from the date of receiving all valid documents as required.

P Insurance has fulfilled its responsibilities in accordance with the agreed terms and conditions in the insurance contracts and certificates No. P-15/DNI/XCG/3201/0006; P-15/DNI/XCG/3303/0010; and P-15/ĐNI/XCG/3303/0009. The refusal to compensate for these contracts/certificates is in line with the commitments in the contracts and the provisions of the Law on Insurance Business; Circular No. 194/2014/TT-BTC dated December 17^th, 2014, effective February 1^st, 2015, by the Ministry of Finance. Based on the above issues, we request the Court to dismiss the entire claims of the plaintiff.

Regarding Valuation Certificate No. 2003/TĐG-CT dated August 22^nd, 2016, issued by Joint Stock Evaluation Company Đ, P Insurance expresses disagreement with this valuation certificate because the valuation process was inappropriate and not compliant with the law. The Court explained that the defendant has the right to request a revaluation, and the defendant has indicated to the Court that using the valuation certificate as a basis for insurance compensation is not in accordance with the legal regulations on insurance compensation. We request the Court to resolve the case according to the law.

Mr. Chu Thanh T, representing the interested party, P1 Insurance, stated:

He agrees with the opinions of the defendant in the written statement dated June 27^th, 2016, and the conciliation records, with no additional comments. The opinions of Joint Stock Insurance Corporation P (P Insurance) submitted to the Court also represent his views as the legal representative of the interested party, P1 Insurance.

Ms. Hà Thị Thanh H, representing the interested party, Joint Stock Commercial Bank V, stated:

On May 8^th, 2013, Company N (hereinafter referred to as the “customer”) mortgaged assets to Joint Stock Commercial Bank V – B Branch (hereinafter referred to as the “Bank”), being the boiler system installed at Joint Stock Company H, under Mortgage Contract No. 069/13/VCB.BH dated May 8^th, 2013. The boiler system installed at Joint Stock Company H was insured as follows:

+ Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0005, dated March 24^th, 2015, with the first beneficiary being Joint Stock Commercial Bank V – B Branch, the insurance amount is VND 6,500,000,000, and the insurance period is from April 1^st, 2015, to March 31^st, 2016.

+ Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0009 dated March 24^th, 2015, with the first beneficiary being Joint Stock Commercial Bank V – B Branch, the insurance amount is VND 21,000,000,000, and the insurance period is from April 1^st, 2015, to March 31^st, 2016.

– On October 1^st, 2014, Company N mortgaged assets to the Bank being the boiler system installed at One-member Limited Liability Paper Company S (Boiler No. 2), under Mortgage Contract No. 207/14/VCB.BH dated October 1^st, 2014. The boiler system No. 2 installed at Paper Company S was insured as follows:

+ Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0008 dated September 30^th, 2015, with the first beneficiary being Joint Stock Commercial Bank V – B Branch, the insurance amount is VND 5,400,000,000, and the insurance period is from October 1^st, 2015, to October 1^st, 2016.

+ Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0057 dated September 30^th, 2015, with the first beneficiary being Joint Stock Commercial Bank V – B Branch, the insurance amount is VND 21,000,000,000, and the insurance period is from October 1^st, 2015, to October 1^st, 2016.

– On February 6^th, 2015, Company N mortgaged assets to the Bank being the boiler system installed at One-member Limited Liability Paper Company S (Boiler No. 3), under Mortgage Contract No. 055/15/VCB.BH dated February 6^th, 2015. The boiler system No. 3 installed at Paper Company S was insured as follows:

+ Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0006 dated March 26^th, 2015, with the first beneficiary being Joint Stock Commercial Bank V – B Branch, the insurance amount is VND 13,000,000,000, and the insurance period is from April 1^st, 2015, to March 31^st, 2016.

+ Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0010 dated March 26^th, 2015, with the first beneficiary being Joint Stock Commercial Bank V – B Branch, the insurance amount is VND 21,000,000,000, and the insurance period is from April 1^st, 2015, to March 31^st, 2016.

The above assets are used to secure Company N’s loans at Joint Stock Commercial Bank V – Branch B according to Credit Contracts with detailed content as follows:

– According to the incident report on the boiler explosion by Company N submitted to Joint Stock Commercial Bank V – B Branch on November 16^th, 2015, around 00:30 on November 13^th, 2015, at Paper Company S, located in Industrial Zone M, District T, Bà Rịa – Vũng Tàu Province, an explosion occurred in the customer’s boiler No. 3. This incident resulted in complete damage to the asset mortgaged at the bank under Mortgage Contract No. 055/15/VCB.BH dated February 6^th, 2015, with an estimated damage value of approximately VND 13,000,000,000.

– On November 16^th, 2015, the bank conducted an on-site investigation and worked with Company N (details in the minutes dated November 16^th, 2015). The bank requested that the customer provide detailed information on the status of the mortgaged assets and actively coordinate with P1 Insurance to receive compensation for the damages caused by the incident.

According to the Notice of Filing No. 72/2016/TB-KDTM dated June 2^nd, 2016, from the People’s Court of Biên Hòa City regarding the “Insurance Contract Dispute,” Company N requests the court to resolve the following issues:

1. Acknowledge the validity of Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0006 dated March 26^th, 2015, between P1 Insurance and the insured, Company N; Joint Stock Insurance Corporation P(P Insurance) must be responsible for compensating Company N for the total damages stated below.
2. Acknowledge the validity of Boiler Insurance Contract No. P-15/ĐNI/XCG/3303/0010 dated March 26^th, 2015, between P1 Insurance and the insured, Company N; Joint Stock Insurance Corporation P(P Insurance) must be responsible for compensating Company N for the total damages stated below.
3. Acknowledge the validity of Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0005 dated March 24^th, 2015, between P1 Insurance and the insured, Company N; Joint Stock Insurance Corporation P(P Insurance) must be responsible for compensating Company N for all damages in the event of an insurance incident.
4. Acknowledge the validity of Boiler Insurance Contract No. P-15/ĐNI/XCG/3303/0009 dated March 24^th, 2015, between P1 Insurance and the insured, Company N; Joint Stock Insurance Corporation P(P Insurance) must be responsible for compensating Company N for the total damages stated below and other damages in the event of an insurance incident.
5. Compensate Company N for the total loss due to the explosion of the Biomass Fluidized Bed Boiler No. 3 under Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0006 dated March 26^th, 2015, in the amount of VND 18,184,750,678.
6. Compensate Company N for public liability insurance regarding personal injury in the amount of VND 633,000,000 under Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0009 dated March 24^th, 2015; Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0010 dated March 26^th, 2015; Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0057 dated September 30^th, 2015.
7. Compensate Company Nfor public liability insurance regarding third-party property damage due to the explosion of Boiler No. 3 in the amount of VND 1,510,790,352 under Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0009 dated March 24^th, 2015; Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0010 dated March 26^th, 2015; Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0057 dated September 30^th, 2015.
8. Compensate Company Nfor the total loss due to the explosion of the Biomass Fluidized Bed Boiler No. 2 in the amount of VND 500,000,000 under Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0008 dated September 30^th, 2015.
9. Compensate for damages due to late fulfillment of the insurance compensation obligation after 15 days from January 19^th, 2015 (acknowledged by P1 Insurancein DispatchNo. 130/P-DNI-CV dated November 24^th, 2015) until the date of the first-instance trial, according to the average overdue interest rate on the market: VND 20,828,541,030 x 15 months (temporarily calculated from February 4^th, 2015, to May 4^th, 2016) x 9%/year x 150% = VND 3,514,816,298.

Total (5)+(6)+(7)+(8)+(9): VND 24,343,357,328.

Regarding the content of Company N’s lawsuit against Joint Stock Insurance Corporation P (P Insurance) and at the trial, Joint Stock Commercial Bank V requests the court to adjudicate according to the law.

Regarding the Valuation Certificate No. 2003/TĐG-CT dated August 22^nd, 2016, from Joint Stock Evaluation Company Đ, the bank has no opinion and requests the court to resolve according to the law.

In the First-instance Business and Commercial Judgment No. 50/2016/KDTM-ST dated October 11^th, 2016, the People’s Court of Biên Hòa City, Đồng Nai Province, decided:

To accept the complaint of Company N.

To order Joint Stock Insurance Corporation P (P Insurance):

1. Acknowledge the validity of Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0006 dated March 26^th, 2015, between P1 Insurance and the insured, Company N, and Joint Stock Insurance Corporation P(P Insurance) must be responsible for compensating Company N for all damages.
2. Acknowledge the validity of Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0010 dated March 26^th, 2015, between P1 Insurance and the insured, Company N, and Joint Stock Insurance Corporation P(P Insurance) must be responsible for compensating Company N for all damages.
3. Compensate Company N for the total loss due to the explosion of the Biomass Fluidized Bed Boiler No. 3 under Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0006 dated March 26^th, 2015, in the amount of VND 13,000,000,000.
4. Pay VND 200,000,000 for site clearance.
5. Compensate Company N for public liability insurance regarding third-party property damage due to the explosion of Boiler No. 3 in the amount of VND 1,510,790,352 under Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0010 dated March 26^th, 2015; Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0057 dated September 30^th, 2015.
6. Compensate Company Nfor the total loss due to the explosion of the Biomass Fluidized Bed Boiler No. 2 in the amount of VND 500,000,000 under Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0008 dated September 30^th, 2015.
7. Compensate for damages due to late fulfillment of the insurance compensation obligation after 15 days from November 19^th, 2015, upon receiving the complete valid claim (acknowledged by P1 Insurancein DispatchNo. 130/P-DNI-CV dated January 24^th, 2015), from December 4^th, 2015, to the first-instance trial date on October 11^th, 2016, according to the basic interest rate issued by the State Bank of Vietnam: VND 15,210,790,352 x 10 months and 7 days x 9%/year = VND 1,167,428,159.

Total (3)+(4)+(5)+(6)+(7): VND 16,378,218,511.

Suspend Company N’s withdrawn claims, which includes:

– Recognition of the validity of Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24^th, 2015, between insurer P1 and insured party N, where Insurance Corporation P Joint Stock Company (Insurance Corporation P) is liable to compensate Company N for all damages in the event of an insurance incident.

– Recognition of the validity of Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24^th, 2015, between insurer P1 and insured party N, where Insurance Corporation P Joint Stock Company (Insurance Corporation P) is liable to compensate Company N for all damages in the event of an insurance incident.

– Compensation to Company N for public liability insurance regarding individuals amounts to 633,000,000 VND under Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24^th, 2015; Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26^th, 2015; Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057 dated September 30^th, 2015.

– Exemption from late penalty interest exceeding 150% in the claim for compensation for damages due to Insurance Corporation P’s delayed fulfillment of insurance compensation obligations.

– Partial claim for compensation to Company N for total losses of Biomass steam boiler No. 3 under Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26^th, 2015, amounting to 4,984,750,678 VND.

Joint Stock Insurance Corporation P (P Insurance) is obligated to reimburse Company N for the total appraisal costs amounting to 134,000,000 VND.

Additionally, the court of first-instance also decided on the responsibilities for delayed enforcement, court fees, and the right to appeal of the parties involved.

On October 20^th, 2016, the defendant Insurance Corporation P filed an appeal against the entire First-instance Business and Commercial Judgment.

In the Appellate Business and Commercial Judgment No. 01/2017/KDTM-PT dated March 6^th, 2017, the People’s Court of Đồng Nai Province decided:

– Reject the entire appeal of Insurance Corporation P (Insurance Corporation P), uphold the First-instance Judgment.

– Accept Company N’s complaint.

– Order Joint Stock Insurance Corporation P (P Insurance) to:

1. Acknowledge the validity of Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0006 dated March 26^th, 2015, between P1 Insuranceand the insured, Company N, and Joint Stock Insurance Corporation P(P Insurance) must be responsible for compensating Company N for all damages.
2. Acknowledge the validity of Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0010 dated March 26^th, 2015, between P1 Insurance and the insured, Company N, and Joint Stock Insurance Corporation P(P Insurance) must be responsible for compensating Company N for all damages.
3. Compensate Company N for the total loss due to the explosion of the Biomass Fluidized Bed Boiler No. 3 under Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0006 dated March 26^th, 2015, in the amount of VND 13,000,000,000.
4. Pay VND 200,000,000 for site clearance.
5. Compensate Company N for public liability insurance regarding third-party property damage due to the explosion of Boiler No. 3 in the amount of VND 1,510,790,352 under Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0010 dated March 26^th, 2015; Public Liability Insurance Contract No. P-15/ĐNI/XCG/3303/0057 dated September 30^th, 2015.
6. Compensate Company N for the total loss due to the explosion of the Biomass Fluidized Bed Boiler No. 2 in the amount of VND 500,000,000 under Boiler Insurance Contract No. P-15/ĐNI/XCG/3201/0008 dated September 30^th, 2015.
7. Compensate for damages due to late fulfillment of the insurance compensation obligation after 15 days from November 19^th, 2015, upon receiving the complete valid claim (acknowledged by P1 Insurance in Dispatch No. 130/P-DNI-CV dated January 24^th, 2015), from December 4^th, 2015, to the first-instance trial date on October 11^th, 2016, according to the basic interest rate issued by the State Bank of Vietnam: VND 15,210,790,352 x 10 months and 7 days x 9%/year = VND 1,167,428,159.

Total (3)+(4)+(5)+(6)+(7): VND 16,378,218,511.

Suspend Company N’s withdrawn claims, which includes:

– Recognition of the validity of Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24^th, 2015, between insurer P1 and insured party N, where Insurance Corporation P Joint Stock Company (Insurance Corporation P) is liable to compensate Company N for all damages in the event of an insurance incident.

– Recognition of the validity of Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24^th, 2015, between insurer P1 and insured party N, where Insurance Corporation P Joint Stock Company (Insurance Corporation P) is liable to compensate Company N for all damages in the event of an insurance incident.

– Compensation to Company N for public liability insurance regarding individuals amounts to 633,000,000 VND under Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24^th, 2015; Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26^th, 2015; Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057 dated September 30^th, 2015.

– Exemption from late penalty interest exceeding 150% in the claim for compensation for damages due to Insurance Corporation P’s delayed fulfillment of insurance compensation obligations.

– Partial claim for compensation to Company N for total losses of Biomass steam boiler No. 3 under Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26^th, 2015, amounting to 4,984,750,678 VND.

– Regarding litigation costs: Joint Stock Insurance Corporation P (P Insurance) is liable for appraisal costs amounting to 134,000,000 VND, thus Joint Stock Insurance Corporation P (P Insurance) must reimburse Company N the sum of 134,000,000 VND.

From the date the plaintiff filed for enforcement, if the defendant fails to pay the aforementioned amount and the appraisal costs, they shall incur interest on late payment at the basic interest rate set by the State Bank of Vietnam corresponding to the amount overdue at the time of payment.

Additionally, the appellate court also decided on court fees.

Following the appellate trial, Joint Stock Insurance Corporation P (P Insurance) submitted a request to review the aforementioned appellate judgment according to cassation procedures.

In Decision No. 45/QĐKNGĐT-VC3-KDTM dated February 8^th, 2018, the Director of the High People’s Procuracy in Hồ Chí Minh City appealed the above Appellate Judgment, requesting the High People’s Court in Hồ Chí Minh City to conduct a cassation review and vacate the entire the Appellate Business and Commercial Judgment above and the entire First-instance Business and Commercial Judgment No. 50/2016/KDTM-ST dated October 11^th, 2016 of the People’s Court of Biên Hòa City, Đồng Nai Province; and remand the case file to the People’s Court of Biên Hòa City, Đồng Nai Province for first-instance retrial in accordance with the law.

At today’s hearing, the representative of the High People’s Procuracy in Hồ Chí Minh City requested the Judicial Committee of the High People’s Court in Hồ Chí Minh City to accept the appeal of the Director of the High People’s Procuracy in Hồ Chí Minh City.

COURT’S OPINION:

[1] According to the documents and evidence in the case file:

[2] Company N supplied, installed, and operated 03 boilers at Industrial Zone M, District T, Bà Rịa – Vũng Tàu Province for Joint Stock Paper Company S (Paper Company S). At the same time, Company N and Insurance Company P1 (P1 Insurance) signed 05 boiler insurance contracts and public liability insurance, specifically: Boiler insurance contract No. P-15/DNI/XCG/3201/0006 dated March 26^th, 2015 (Contract No. 06); Public liability insurance contract No. P-15/DNI/XCG/3303/0010 dated March 26^th, 2015 (Contract No. 10); Boiler insurance contract No. P-15/DNI/XCG/3201/0007 dated September 30^th, 2015 (Contract No. 07); Boiler insurance contract No. P-15/DNI/XCG/3201/0008 dated September 30^th, 2015 (Contract No. 08); Public liability insurance contract No. P-15/DNI/XCG/3303/0057 dated September 30^th, 2015 (Contract No. 57).

[3] At approximately 00:30 on November 13^th, 2015, an explosion occurred at Boiler No. 3 at the Paper Company S. The Provincial Police Investigation Agency – Bà Rịa-Vũng Tàu Police Department conducted an investigation into the cause of the incident and concluded that the explosion of Boiler No. 3 was due to a technical fault, with no signs of criminal activity. The boiler explosion not only caused damage to Company N’s property but also affected Paper Company S’s assets. The damaged assets at Paper Company S were covered under the insurance certificate, thus Company N was compensated for the value of the damage as prescribed by law.

[4] However, P1 Insurance contended that Company N’s payment of insurance premiums was delayed, rendering Contracts No. 06 and No. 10 ineffective. This is due to the fact that the deadline for premium payment was May 1^st, 2015, but Company N only transferred the payment to P1 Insurance on May 7^th, 2015. Upon receipt of the insurance premiums from Company N, both Insurance Corporation P and P1 Insurance neither objected nor provided written notification to Company N regarding the termination of Contracts No. 06 and No. 10 due to late payment of insurance premiums, effective from May 1^st, 2015.

However, Insurance P1 still received the premium, issued value-added tax invoices, and reported taxes on these insurance premiums from Company N. Therefore, the Insurance Corporation P and P1 Insurance recognized that Company N’s insurance premiums were paid late and acknowledged the validity of the two contracts indicated earlier.

[5] Therefore, when the insured event occurred, the Insurance Corporation P is obligated to provide compensation under the agreed-upon contracts.

[6] Regarding losses and compensation, Article 48 of the Insurance Business Law states that an evaluation of losses must be conducted to ascertain the cause and extent of the losses. From there, a foundation is established to calculate the precise amount that the Insurance Corporation P must provide as compensation. However, both the first-instance and appellate courts only chose to evaluate the worth of assets in order to require Insurance Corporation P to provide compensation.

This decision lacked a legal foundation because, as stated in Article 15, Clause 4 of the Price Law, assessment is the responsibility of an organization or agency that determines the monetary value of different types of assets in accordance with the regulations of the Civil Code, based on market prices at a specific location and time, and following specific assessment criteria.

[7] Contract No. 06 stipulates that the deductible amount is the sum that the insured individual is responsible for paying in the event of a loss. The deductible specified under this Contract is 5% of the minimum loss amount, which is 10,000,000 VND per loss incidence. Nevertheless, both the first-instance and appellate courts failed to take into account the agreement stated in the Contract. Instead, they forced Insurance Corporation P to fully compensate for the damage, which goes against the terms of the agreement and consequently harms the rights and interests of Insurance Corporation P.

[8] In relation to Insurance Contract No. 08, following the occurrence of the incident, it was mutually agreed upon by both parties that Company B would be responsible for conducting the assessment. Nevertheless, Company B has not finished evaluating the extent of the damages due to insufficient data provided by Company N. Both the first-instance and appellate courts failed to address this matter, but they compelled Insurance Corporation P to provide compensation to Company N without adequate evidence, which lacks a legal foundation.

[9] Company N has failed to provide evidence substantiating its compensation for material damages to a third party. However, both the first-instance and appellate courts have ordered Insurance Corporation P to compensate for public liability under Contract No. 10 and Contract No. 57, amounting to VND 1,510,790,352. This ruling lacks a valid basis.

[10] Additionally, the technical inspection certificate issued by Industrial Inspection Center II states that the examination took place prior to October 2013, but the insurance contract and valuation certificate indicate that the BIOMASS dryer was manufactured in 2014. Nevertheless, the first-instance and appellate courts failed to provide clarification on this matter but instead ruled in favor of compelling Insurance Corporation P to reimburse Company N, despite the lack of acceptable justification.

In light of the foregoing,

IT IS DECIDED:

Pursuant to Articles 337, 343, and 349 of the Civil Procedure Code.

1. To accept the Appeal No. 45/QĐKNGĐT-VC3-KDTM dated February 8^th, 2018, of the Director of the High People’s Procuracy in Hồ Chí Minh City.
2. To vacate the entire Appellate Business And Commercial Judgment No. 01/2017/KDTM-PT dated March 6^th, 2017, of the People’s Court of Đồng Nai Province, and vacate the entire First-instance Business And Commercial Judgment No. 50/2016/KDTM-ST dated October 11^th, 2016, of the People’s Court of Biên Hòa City, Đồng Nai Province, between the plaintiff Company N and the defendant Joint Stock Insurance Corporation P; remand the case file to the People’s Court of Biên Hòa City, Đồng Nai Province, for first-instance retrial in accordance with the law.
3. This Cassation Decision shall have legal effect from the date of issuance.

CONTENT OF THE CASE LAW:

“[4] … Upon receipt of the insurance premiums from Company N, both Joint Stock Insurance Corporation P and P1 Insurance neither objected nor provided written notification to Company N regarding the termination of Contracts No. 06 and No. 10 due to late payment of insurance premiums, effective from May 1^st, 2015. However, Insurance P1 still received the premium, issued value-added tax invoices, and reported taxes on these insurance premiums from Company N. Therefore, the Joint Stock Insurance Corporation P and P1 Insurance recognized that Company N’s insurance premiums were paid late and acknowledged the validity of the two contracts indicated earlier.

[5] Therefore, when the insured event occurred, the Joint Stock Insurance Corporation P is obligated to provide compensation under the agreed-upon contracts.”

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