International Trade Dispute Case | Coverage of "All Risks"
- Allen
- Mar 21
- 3 min read
[Basic Case Details]
On October 17, 2017, Company A from Guinea (the plaintiff) signed a cargo sales contract with Company B from China to purchase two bulldozers. The original bill of lading for the transportation of the export goods in question was issued by a Shanghai shipping agency on behalf of the ship - owner. The loading date was December 5, 2017, and the freight was prepaid. The goods involved in the above - mentioned transportation were insured by Company B from China with an insurance company (the defendant) for cargo transportation insurance, and the policy - signing date was December 4, 2017. In mid - January 2018, the export goods arrived at Bata Port, Equatorial Guinea, the port of destination. After being unloaded at the port, the goods were seized by the government of Equatorial Guinea and not released. The reason for the seizure remained unknown.
[Key Points of the Case]
Whether the factual state of the goods identified in this case falls within the scope of coverage of "all risks".
[Court Judgments]
First - instance judgment: The Qingdao Maritime Court in China held that the plaintiff's claim that its losses fell within the liability scope of "all risks" lacked legal and contractual basis. Thus, it did not support the claim and ruled to reject the plaintiff's lawsuit request.
Second - instance judgment: The Higher People's Court of Shandong Province in China ruled to reject the appeal and uphold the original judgment.
Supreme People's Court ruling: The Supreme People's Court of China ruled to reject the application for retrial.
[Suggestions from Chinese Foreign Trade Lawyers]
This case involves the understanding of "all risks" in marine cargo transportation:
1. Correct Comprehension of the Usual Significance of "Risks"
The term "risks" refers to potential dangers. They are characterized by unexpectedness or contingency, representing a possibility rather than certainty. Any unfavorable situations that are definitely impossible to occur, certain to occur, or have already occurred cannot be regarded as risks. Therefore, both in insurance contracts and legal norms, the inherent defects of the insured item, natural wear - and - tear, and losses that occurred before the commencement of the insurance liability are generally stipulated as exclusionary liabilities.
2. Understanding of "All" in "All Risks"
In the context of international marine cargo insurance practice, "all risks" is subject to limitations. Besides excluding all established or definite factors based on the basic connotation and essential characteristics of risks, different insurance clauses have their own coverage scopes, and the potential factors covered may vary.
3. Burden of Proof for "All Risks"
The "Institute Cargo Clauses (A)" stipulates that "all risks" adopt the broad approach of "all risks + listed exclusions", which is a typical non - listed risk. The insured only needs to prove that the insured incident was caused by certain accidents, without having to prove that the loss was caused by a specific type of risk or the exact cause of the loss. After the insured has fulfilled the above - mentioned initial burden of proof, if the insurer cannot prove that the loss was caused by agreed - upon or legally - defined exclusionary liabilities of insurance, the court should determine that the loss was caused by an insured risk.
[Case Source]
（2019）鲁72民初1004号、（2020）鲁民终726号、（2020）最高法民申6732号
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