Precedent No. 37/2020/AL regarding effect of property insurance contract in case of the insurance buyer’s late payment of insurance premium upon expiration of the deadline for premium payment

- Situation:

After the insurance premium payment deadline agreed upon in the property insurance contract had expired, the insurance buyer paid the insurance premium to the insurance company. The insurance company said nothing and did not inform the insurance buyer in writing of the termination of the insurance contract, but still received the insurance premium paid late, issued value-added tax invoice and included that premium payment in their tax return. After that, an insured event happened.

- Legal solution:

In this case, as the insurance contract remained in effect, the insurance company was liable for pay indemnity to the assured.

According to the petition to sue, the plaintiff’s authorized representative gave the following testimony:

Limited Liability Company N (hereinafter referred to as Company N) is established and operates according to the Business Registration Certificate No. 3600686844 dated July 29, 2004 of the Department of Planning and Investment of Dong Nai province, and has obtained the registration for the 6^th change on September 4, 2015.

Company N, as the insured party, and Insurance Company P1, as the insuring party, agreed to enter into  07 boiler insurance contracts and the public liability insurance contract as follows:

1. Boiler insurance contract No. P-15/DNI/XCG/3201/0005 dated March 24, 2015, including the following terms and conditions: Certificate of insurance for the boiler No. P-15/DNI/XCG/3201/0005 dated March 24, 2015; Notice of collection of insurance premium dated March 24, 2015; Additional clauses; Boiler insurance rules, under which Company N is provided by Insurance Company P1 with the insurance:

- Against material loss or damage: Biomass dryer (commonly called Hoa Viet boiler) with total insurance coverage/sum insured/sum assured of VND 6,500,000,000

- For the liability to the third party: Liability limit of VND 1,000,000,000 for each accident/insured event/occurrence and during the entire policy period, including:

- Bodily injury liability coverage per person:

+ Per person limit: VND 20,000,000/person/accident.

+ Insurance coverage limit for total number of persons: VND 200,000,000/accident during the entire policy period.

- Limit of insurance coverage against property loss or damage: VND 2,000,000,000/accident during the entire policy period.

Insured location: Joint-stock Company H (briefly called Company H); address: neighborhood No. 8, ward L, B city, Dong Nai province. Insurance beneficiary: Joint Stock Commercial Bank V - Branch B (Bank V - Branch B). Policy period starts on April 1, 2015 and ends on March 31, 2016 (hereinafter referred to as Contract No. 0005).

2. Public liability insurance contract No. P-15/DNI/XCG/3303/0009 dated March 24, 2015, including the following terms and conditions: Certificate of public liability insurance No. P-15/DNI/XCG/3303/0009 dated March 24, 2015; Public liability insurance contract No. P-15/DNI/XCG/3303/0009, dated March 24, 2015; Notice of collection of insurance premium dated March 24, 2015; Rules for public liability insurance; Amended or supplementary clauses regarding public liability insurance, under which Company N is insured by Company P1 for the coverage of VND 21,000,000,000 against each loss or damage and for the entire year (Insurance limit per person: Not greater than VND 20 million/person/accident). Coverage scope: Insurance Company P1 provides indemnity for bodily injuries or protection against material or physical loss or damage caused during the policy period owing to an accident occurring within the geographical restriction related to Company N’s business.  Insured location: Company H; address: Neighborhood No. 8, ward L, B city, Dong Nai province. Geographical scope: Vietnam. Beneficiary of insurance rights: Bank V - Branch B (Beneficiary 1), Company N (Beneficiary 2). Insurance period starts on April 1, 2015 and ends on March 31, 2016. (Hereinafter referred to as Contract No. 0009).

3. Boiler insurance contract No. P-15/DNI/XCG/3201/0006 dated March 26, 2015, including the following terms and conditions: Certificate of insurance for the boiler No. P-15/DNI/XCG/3201/0006 dated March 26, 2015; Notice of collection of insurance premium dated March 26, 2015; Additional clauses; Boiler insurance rules, under which Company N is provided by Insurance Company P1 with the insurance:

- Against material loss or damage: Biomass dryer No. 03 (commonly called boiler No. 3) with total insurance coverage/sum insured/sum assured of VND 13,000,000,000.

- For the liability to the third party: Liability limit of VND 1,000,000,000 for each accident/insured event/occurrence and during the entire policy period, including:

- Bodily injury liability coverage per person:

+ Insurance limit per person: VND 20,000,000/person/accident.

+ Insurance coverage limit for total number of persons: VND 200,000,000/accident during the entire policy period.

- Limit of insurance coverage against property loss or damage: VND 2,000,000,000/accident during the entire policy period.

Insured location: At Paper Single-member Limited Liability Company S, now Paper Joint Stock Company S, (referred to as Paper Company S); Address: Industrial Park M, T district, Ba Ria - Vung Tau province. Insurance beneficiary: Bank V - Branch B (Beneficiary 1), Company N (Beneficiary 2). Insurance period starts on April 1, 2015 and ends on March 31, 2016 (hereinafter referred to as Contract No. 0006).

4. Public liability insurance contract No. P-15/DNI/XCG/3303/0010 dated March 26, 2015, including the following terms and conditions: Certificate of public liability insurance No. P-15/DNI/XCG/3303/0010 dated March 26, 2015; Public liability insurance contract No. P-15/DNI/XCG/3303/0010 dated March 26, 2015; Notice of collection of insurance premium dated March 26, 2015; Rules for public liability insurance; Amended or supplementary clauses regarding public liability insurance, under which Company N is insured by Company P1 for the coverage of VND 21,000,000,000 against each loss or damage and for the entire year (Insurance limit per person: Not greater than VND 20 million/person/accident). Coverage scope: Insurance Company P1 shall pay indemnity for bodily injuries or protection against loss or damage to material or physical property through the third parties’ fault for which Company N is liable during the policy period owing to any accident related to Company N’s business.  Insured location: At Paper Company S; Address: Industrial Park M, T district, Ba Ria - Vung Tau province. Geographical scope: Vietnam. Beneficiary of insurance rights: Bank V - Branch B (Beneficiary 1), Company N (Beneficiary 2). Insurance period starts on April 1, 2015 and ends on March 31, 2016. (Hereinafter referred to as Contract No. 0010).

5. Boiler insurance contract No. P-15/DNI/XCG/3201/0007 dated September 30, 2015, including the following terms and conditions: Certificate of insurance for the boiler No. P-15/DNI/XCG/3201/0007 dated September 30, 2015; Notice of collection of insurance premium dated September 30, 2015; Additional clauses; Boiler insurance rules, under which Company N is provided by Insurance Company P1 with the insurance:

- Against material loss or damage: Biomass dryer No. 01 (commonly called boiler No. 1) with total insurance coverage/sum insured/sum assured of VND 9,300,000,000.

- For the liability to the third party: Liability limit of VND 1,000,000,000 for each accident/insured event/occurrence and during the entire policy period, including:

- Bodily injury liability coverage per person:

+ Per person limit: VND 20,000,000/person/accident.

+ Insurance coverage limit for total number of persons: VND 200,000,000/accident during the entire policy period.

- Limit of insurance coverage against property loss or damage: VND 800,000,000/accident during the entire policy period.

Insured location: At Paper Company S; Address: Industrial Park M, T district, Ba Ria - Vung Tau province. Insurance beneficiary: Bank V - Branch B. Insurance period starts on October 1, 2015 and ends on October 1, 2016 (hereinafter referred to as Contract No. 0007).

6. Boiler insurance contract No. P-15/DNI/XCG/3201/0008 dated September 30, 2015, including the following terms and conditions: Certificate of insurance for the boiler No. P-15/DN1/XCG/3201/0008 dated September 30, 2015; Notice of collection of insurance premium dated September 30, 2015; Additional clauses; Boiler insurance rules, under which Company N is provided by Insurance Company P1 with the insurance:

- Against material loss or damage: Biomass dryer No. 02 (commonly called boiler No. 2) with total insurance coverage/sum insured/sum assured of VND 5,400,000,000.

- For the liability to the third party: Liability limit of VND 1,000,000,000 for each accident/insured event/occurrence and during the entire policy period, including:

- Bodily injury liability coverage per person:

+ Per person limit: VND 20,000,000/person/accident.

+ Insurance coverage limit for total number of persons: VND 200,000,000/accident during the entire policy period.

- Limit of insurance coverage against property loss or damage: VND 800,000,000/accident during the entire policy period.

Insured location: At Paper Company S; Address: Industrial Park M, T district, Ba Ria - Vung Tau province. Insurance beneficiary: Bank V - Branch B. Insurance period starts on October 1, 2015 and ends on October 1, 2016 (hereinafter referred to as Contract No. 0008).

7. Public liability insurance contract No. P-15/DNI/XCG/3303/0057 dated September 30, 2015, including the following terms and conditions: Certificate of public liability insurance No. P-15/DNI/XCG/3303/0057 dated September 30, 2015; Notice of collection of insurance premium dated September 30, 2015; Public liability insurance contract No. P-15/DNI/XCG/3303/0057 dated September 30, 2015; Rules for public liability insurance; Amended or supplementary clauses regarding public liability insurance, under which Company N is insured by Company P1 for the coverage of VND 21,000,000,000 against each loss or damage and for the entire year (Insurance limit per person: Not greater than VND 21,/person/accident). Coverage scope: Insurance Company P1 provides indemnity for which Company N is legally liable for bodily injuries or protection against material or physical loss or damage of third parties caused during the policy period owing to any accident related to Company N’s business.  Insured location: At Paper Company S; Address: Industrial Park M, T district, Ba Ria - Vung Tau province. Geographical scope: Vietnam. Beneficiary of insurance rights: Bank V - Branch B (Beneficiary 1), Company N (Beneficiary 2). Insurance period starts on October 1, 2015 to October 1, 2016. (Hereinafter referred to as Contract No. 0009).

At about 00:30 a.m., on November 13, 2015, at Paper Company S, there was an explosion in boiler No. 3, resulting in:

1. Material or physical loss or damage to the boiler No. 3: The entire boiler system No. 3 was destroyed. Property loss or damage to the third party: Costs of fire fighting, property damage, construction, damage due to the system shutdown,... of Paper Company S.

2. material human loss or bodily injury: 02 workers on the shift running the No. 3 boiler, Mr. Nguyen Van C and Mr. Nguyen Thanh L, died.

3. Expenses incurred cleaning up the scene: Dismantling, cleaning up, transporting and depositing property remaining at the scene after the boiler No.3 explosion occurred.

4. Affecting and damaging part of boiler No. 2 of Company N.

At 10:00 a.m., November 13, 2015, Insurance Company P and Company N made an incident scene report. The Investigation Police Agency of the Police Department of Ba Ria-Vung Tau province solicited the expertise of the cause of the incident. As of January 13, 2016, there was an inspection conclusion No. 3548/C54B of the Forensic Science Sub-Institute (C54B) - Ministry of Public Security, all of 03 written documents issued by the Investigation Police Agency - Ba Ria - Vung Tau province’s Police Department on the same day, January 26, 2016, enclosing: Noncriminal Prosecution Notice No. 02/TB-PC44; Conclusion verifying criminal information No. 02/KL-PC44 (D3); Notification of results of processing of the crime report No. 02/TB-PC44; Official Letter No. 100/VKS-P2 dated January 26, 2016 of the People's Procuracy of Ba Ria - Vung Tau province, regarding the conclusion verifying the denunciation letter and the conclusion that the explosion of the boiler No. 3 is caused by technical error, and the No. 3 boiler is still in the inspection period (issued by Safety Industrial Technical Inspection Centre No.2, Ministry of Industry and Trade; and the next inspection is scheduled to take place on December 17, 2016), showed that no sign of crime was found in the boiler No. 3 explosion happening on November 13, 2015.

Insurance Company P1 appointed the Inspection Joint Stock Company B at 2.5 P, ward B, district P, Ho Chi Minh City to conduct the inspection and expertise of the boiler No. 3 explosion accident. The inspections carried out on November 17, 18, 19, 20 and 28, 2015, were documented in field records and pointed out damaged parts, including: boiler No. 3; boiler No. 1 and 2 shed; equipment shared between boiler No. 1, No. 2 and No. 3; mechanical and electrical damage to the boiler No. 2; property of Paper Company S as the third party; actual field cleanup.

Company N collected and submitted data to request compensation from Insurance Joint Stock Company P and Insurance Company P1, based on the following legal grounds:

1. Regarding the material or physical damage to the No. 3 boiler, after consulting the boiler insurance contract No. P-15/DNI/XCG/3201/0006 dated March 26, 2015, the boiler No. 3 explosion accident falls under the scope of insurance coverage liability assumed by Insurance Company P, including:

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

- Boiler No. 3 shed: VND 1,298,476,400;

- Boiler feed equipment and supplies (Increasing the capacity for using combustible materials): VND 2,519,308,592;

- Expenses incurred from cleaning up the scene: After consulting Clause 25 regarding Scene Cleanup (Coverage limit of USD 100,000) in the section titled Additional Terms of Contract No. 0006, Company N charged Insurance Company P for the costs of cleaning up the explosion scene incurred from the boiler No. 3 explosion because these costs fell within the coverage liability to actual damage of Insurance Company P, including:

+ Dismantling and hoisting the boiler No. 3: VND 140,000,000;

+ Transportation fare (using heavy trailer truck): VND 20,000,000;

+ Cleanup and light transportation: VND 200,000,000;

+ Rental of the storage facility for the boiler No. 3: VND 120,000,000.

Total: VND 18,184,750,678.

2. Human loss or bodily injury:: In the light of the Contracts No. 0009, No. 0010 and No. 0057, because the accident of explosion in the boiler No. 3 resulting in 02 dead occurred within the geographic boundary of Vietnam, Company N charged Insurance Company P for indemnity against actual human loss, including:

- Mr. Nguyen Van C: VND 300,000,000;

- Mr. Nguyen Thanh L: VND 333,000,000.

Total: VND 633,000,000;

3. Third party’s property loss or damage: In the light of the Contracts No. 0009, No. 0010 and No. 0057, because the accident of explosion in the boiler No. 3 resulting in loss and damage to property of Paper Joint Stock Company S, as the third party, occurred within the geographic boundary of Vietnam, Company N charged Insurance Company P for indemnity against total actual loss and damage, including:

- Property damage or loss, and construction cost: VND 90,804,880;

- Fire fighting cost: VND 24,943,000;

- Damage or loss inflicted by production suspension: VND 332,010,000;

- Indemnity paid to Paper Joint Stock Company S for the differential cost of fuel gas used as substitute combustible material in November 2015 due to the boiler No. 3 explosion: VND 1,063,032,472.

Total: VND 1,510,790,352.

4. Regarding physical and material loss or damage to the boiler No. 2, after consulting the boiler insurance contract No. 0008, Company N charged Insurance Company P for the indemnity against their loss and damage within the Company P’s insurance coverage scope, including:

- Mechanical damage: VND 200,000,000;

- Electricity damage: VND 300,000,000.

Total: VND 500,000,000.

In Insurance Company P’s viewpoints:

1. Insurance Company P did not agree to compensate material liability for the boiler No. 3 and public insurance liability for third party’s people and property to Company N when denying the validity of the Contract No. 0006 and No. 0010, as shown in the Official Letter No. 130/P-DNI-CV, November 24, 2015 of Insurance Company P1; additionally denying the validity of the Contract No. 0005 and No. 0009 through the Official Letter No. 136/P-DNI-CV dated December 1, 2015. On November 26, 2015, Company N sent Insurance Company P the Correspondence No. 01/2015/PHTT-NTN-PHCO DN regarding non-acceptance of insurance liability disclaimer of Insurance Company P and request for Insurance Company P’s indemnity against all loss or damage occurred. Insurance Company P continued to refuse to pay indemnity by sending the Official Letter No. 135/P-DNI-CV dated December 1, 2015 giving the following explanations: Company N would have paid the insurance premium before May 1, 2015, but till May 7, 2015, Insurance Company P1 did not receive the expected insurance premium. Based on the payment terms of those contracts terminated on May 1, 2015, as the incident happened prior to the incident occurrence date, November 13, 2015, such incident did not fall within the scope of coverage liability assumed by Insurance Company P. Because of disagreeing about the disclaimer of coverage liability issued by Insurance Company P, on December 2, 2015, Company N sent a complaint to Insurance Company P.

Insurance Company P’s refusal to pay indemnity for the above reasons was absolutely unfounded.

i) Contract effective date: According to Article 405 of the Civil Code that states that “A legally concluded contract shall take effect from the time of conclusion, unless otherwise agreed or otherwise provided by law”, and regarding the time of entry into the Contract, "at the time the requesting party receives a reply that informs approval of conclusion of the contract" (Clause 1 of Article 404) or "at the time the last party signs the written text of contract" (Clause 4 of Article 404), in fact, Insurance Company P already issued a certificate of insurance for Contract No. 0005 on March 24, 2015; Contract No. 0009 on March 24, 2015; Contract No. 0006 on March 26, 2015; Contract No. 0010 on March 26, 2015, and issued the VAT invoice to Company N, and received insurance premiums totaling VND 91,179,000 on May 7, 2015. Contracting parties did not enter into any other agreement on the contract effective date. Insurance Company P is obliged to indemnify Company N for loss or damage in accordance with the provisions of Clauses 1 and 3 of Article 15 regarding the time when insurance liability as provided in the Law on Amending and Supplementing a Number of Articles of the 2010 Law on Insurance Business.

ii) Contract termination: Under the provisions of Clause 2 of Article 23 of the Law on Insurance Business, the insurance contract shall be terminated in case where “Any insurance buying party fail to pay insurance premiums or does not pay insurance premiums as agreed upon in insurance contracts, unless otherwise agreed by contracting parties”.

Under the agreement made by the two parties in the payment terms of the boiler insurance contracts such as contract No. 0005, No. 0006, parties agreed that:

 “In case the insured fails to pay insurance premium in full or fails to pay insurance premium according to the terms of payment set out in the insurance contract.”. According to the payment terms of the boiler insurance contract, insurance premium shall be paid to the insurer by bank transfer on a lump-sum basis." Company N paid the insurance premium by one-time transfer with the total amount of VND 91,179,000 and Insurance Company P1 already received the full sum.

 “or other payment agreements made in writing by the two parties, the validity of the Insurance Contract shall be automatically terminated on the next day on which the insured has to pay the insurance premium as agreed upon in the Insurance Contract or enclosed Addenda (if any)”. As stipulated in Article 23, the terms of commitment to pay insurance premiums, including the clause prescribing Company N’s additional purchase, only apply if and only if it is more beneficial to Company N than the payment terms agreed on in the insurance contract” (but without prejudice to the rights of the parties hereto)”. As the explanation and representation aiming at denying the validity of the insurance contract and disclaiming their indemnity liability by Insurance Company P was not beneficial to Company N, the supplementary clause regarding payment was null and void. . On the other hand, the supplementary clause was a part of the Contract No. 15/DNI/XCG/3201/0005, not of the Contract No. 0005 (P-15/DNI/XCG/3201/0005); No. 15/DNI/XCG/3201/0006, and the Contract No. 0006 (P-15/DNI/XCG/3201/0006).

Based on public liability insurance contracts like Contract No. 0009 and No. 0010, Insurance Company P’s referring to Article 5 as a clause on commitment to pay insurance premium (within 15 days) to deny the validity of the contract, and disclaim the liability to indemnify Company N for the insured incident was unfounded, because it is not related to contract No. 0009 and No. 0010, and not beneficial to Company N if the following supplementary clauses were applied:

- Clauses regarding amendments and supplements to the insurance for public liability were part of the Contract No. 15/DNI/XCG/3303/0009, not of the Contract No. 0009 (P-15DNI/XCG/33 03/0009); were part of the Contract No. 15/DNI/XCG/3303/0010, and not part of the Contract No. 0010 (P-15/DNI/XCG/3303/0010);

- The terms of commitment to pay the insurance premium (within 15 days) are the additional clauses that apply only when they are more beneficial than the other terms agreed upon in the contract No. 0009 and No. 0010, but these contracts do not provide for the contract termination due to late payment of insurance premium.

2. Regarding the damage of the boiler No. 2: Insurance Company P deliberately evaded admitting the liability to pay indemnity against such damage under Contract No. 0008 as committed in the conclusion Part III of the Official Letter No. 130/P-DNI-CV dated November 24, 2015.

On the above-stated grounds, the authorized representative of Company N kept on filing the petition to sue but, on September 29, 2016 and at the first instance trial, the plaintiff's authorized representative withdraw part of the petition to sue as follows:

- Recognizing the validity of the Public Liability Insurance Contract No. P-15 / DNI / XCG / 33 03/0009 dated March 24, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all damage resulting from occurrence of the insured incident.

- Recognizing the validity of the Public Liability Insurance Contract No. P-15 / DNI / XCG / 33 03/0009 dated March 24, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all damage resulting from occurrence of the insured incident.

- Paying Company N VND 633,000,000 as the public liability insurance coverage for human loss or bodily injury under the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057 dated September 30, 2015.

- Excluding the amount calculated at the interest rate of 150% on the indemnity amount stated in the indemnity claim due to Insurance Joint Stock Company P’s late payment of their obligation to pay insurance coverage.

- Withdrawing part of the petition to sue for an indemnity paid to Company N against all losses due to the explosion in the Biomass boiler No. 3 under Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26, 2015. The withdrawn amount of indemnity was VND 18,184,750,678 and only VND 13,000,000,000 and VND 200,000,000 for cleanup work were claimed.

Company N’s authorized representative kept on claiming the remaining indemnity in the petition to sue  and petitioned the Court to make its decision to force Insurance Corporation P (Insurance Joint Stock Company P) to:

1. Recognize the validity of the Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all losses and damage.

2. Recognize the validity of the Public Liability Insurance Contract No. P-15 / DNI / XCG / 3303/0010 dated March 26, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all losses or damage.

3. Pay Company N an indemnity for all loss or damage to the Biomass boiler No. 3 under Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26, 2015. The value of such indemnity was VND 13,000,000,000.

4. Pay VND 200,000,000 as the amount of indemnity for scene cleanup work.

5. Paying Company N VND 1,510,790,352 as the public liability insurance coverage for third party’s property loss or damage caused by the boiler No.3 explosion accident under the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057 dated September 30, 2015.

6. Pay Company N the amount of VND 500,000,000 as an indemnity for all loss or damage to the Biomass boiler No. 2 under Boiler Insurance Contract No. P-15/DNI/XCG/3201/0008 dated September 30, 2015.

7. Pay compensation for damage caused due to the delayed performance of the insurance indemnity obligation after 15 days from November 19, 2015 to the date of receipt of a full and valid claim (recorded in Insurance Company P1’s Official Letter No.130/P-DNI-CV dated January 24, 2015). This means that, from December 4, 2015 to the first-instance trial date of October 11, 2016, such compensation is calculated at the basic interest rate issued by the State Bank as follows: VND 15,210,790,352 x 10 months and 07 days x 9%/year = VND 1,167,428,159.

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

Below is the additional section based on which the Court may consider giving its decision:

1. According to the Public Liability Insurance Contract No. 0009, No. 0010 and No. 0057, the jurisdiction to resolve disputes is settled by the competent People's Court as provided in Article 2.3 of these contracts.

2. Regarding boiler insurance contracts, based on Article 17 of the Commercial Arbitration Law No. 54/2010 / QH12 dated June 17, 2010; Clause 5 of Article 4 of Resolution No. 01/2014 / NQ-HDTP dated March 20, 2014 of the Panel of Judges of the Supreme People's Court, due to the boiler insurance rules bearing adjoining stamps with the pages of the insurance contract between the Insurer P1 and the Insured Company N, and prepared readily for use by the Insurance Company P1, including the arbitration arrangement, Company N is entitled to choose the Arbitrator or the Court to resolve dispute. Company N chose the Court to resolve the dispute.

The plaintiff’s authorized representative agreed with the Valuation Certificate No. 2003 / TDG-CT dated August 22, 2016 of Valuation Joint Stock Company D and had no other comments. The plaintiff's authorized representative listened to the Court’s explanation to Mr. Chu Thanh T as to Mr. T’s disagreement with the above-stated valuation certificate, in spite of Mr. T’s right to ask the Court to conduct reevaluation,  Mr. T had no comment and requested the Court to give its judgment in accordance with the law.

At that point, there was no other request.

The defendant’s authorized representative gave the following comments:

A. Comments on matter No. 1 through matter No.7 included in the petition to sue filed by Company N on May 17, 2016 as follows:

I. Boiler insurance certificate No. P-15 / DNI / XCG / 3201/0006 was agreed upon and signed by Insurance Company P1 and Company N on March 26, 2015 in accordance with the law (The set of documents included in the insurance policy comprising Certificate of Insurance, Notice of Premium Collection, Rules of Insurance, and Additional Terms carrying Insurance Company P’s adjoining stamp). However, in the course of contract performance, Company N did not fulfill all the commitments in the contract, resulting in the contract’s termination before the time of occurrence of loss or damage, specifically as follows:

According to the terms of payment on the insurance certificate and the supplementary clause No. 23, the payment term is prescribed as follows:

1) The payment term corresponds to the period specified in the Certificate of Insurance:

 “Premium payment term: Payment must be made within 15 days from March 26, 2015.

The payment terms specified in the contract: Insurance premiums will be paid to the insurer in cash, by check or bank transfer on a lump sum basis. Below are specific regulations:

In case where the insured fails to pay the insurance premium in full or fails to pay the premium under the payment terms of the insurance contract or other payment arrangements made in writing by both parties, the insurance contract will automatically expire on the subsequent day. The insured must pay insurance premiums as agreed upon in the Insurance Contract or the attached amendments/addenda (if any)”.

Therefore, according to the term of payment of insurance premium, Company N must pay the insurance premium to Insurance Company P by April 10, 2015 (this is also clearly stated by Insurance Company P in the Notice of Premium Collection sent to Company N on March 26, 2015).

2) Under the supplementary clause No. 23: the clause on commitment to paying insurance premiums (within 30 days):

 “1) The parties hereby agree and acknowledge that, regardless of any contrary conditions in this insurance policy, and on the basis of compliance with the condition No. 2 below (but without prejudice to the rights of the parties under this policy), the prerequisite for binding Insurance Company P to its liability under the insurance policy, the renewal certificate, the supplementary clause or the provisional certificate of insurance is that the insured must pay in full all insurance premiums already calculated while Insurance Company P, the broker or the insurance agent who issued or managed this insurance policy must receive such premium with the payment term specified as follows:

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

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

 (ii) The effective date specified in each additional clause (if any) included in the insurance policy, renewal certificate, provisional certificate of insurance, if the declared effective date of insurance falls on or after the date of announcement of supplementary clause.

 (iii) The date of issuance of each supplementary clause (if any) specified in the insurance policy, renewal certificate, provisional certificate of insurance, if the effective date prescribed in this supplementary clause precedes the date of issuance.

Or

 (b) If the period of insurance is less than 60 days, the payment must fall within the policy period specified in the insurance policy, the insurance policy, the supplementary clause, or provisional certificate of insurance.

2) In the case of the insurance premium mentioned above has not been fully paid to Insurance Company P, the broker or agent as declared according to the nature and time mentioned above (guarantee period of insurance premium payment), the insurance effect under the insurance policy, renewal certificate, supplementary terms, or provisional certificate will be deemed terminated from the expiry date of the period of payment guarantee, and Insurance Company P shall be exempt from all liabilities from then on, and to such extent, Insurance Company P will be entitled to the insurance premium calculated in proportion to the effective dates of the policy, but not less than 20 USD.”

Therefore, according to this premium payment term, Company N must pay the insurance premium to Insurance Company P by May 1, 2015.

Based on the above payment agreements, before May 1, 2015 at the latest, Company N must pay the premium according to the boiler insurance certificate No. P-15 / DNI / XCG / 3201/0006 to Insurance Company P but, until May 7, 2015, Insurance Company P received the insurance premium from Company N (7 days late compared to the due date specified in the provisions of the supplementary clause No. 23, and 26 days late compared to the due date specified in the payment terms set forth in the insurance certificate).

Therefore, based on the payment terms set forth in the insurance certificate and supplementary clause No. 23; Pursuant to Item a, Clause 2, Article 18 and Clause 2, Article 23 of the Law on Insurance Business; Clause 4, Article 2 of Circular No. 194/2014 / TT-BTC, dated December 17, 2014, effective on February 1, 2015 of the Ministry of Finance, the loss or damage resulting from the explosion in the Biomass boiler No. 3 with a capacity of 30 tonnes / h according to the boiler insurance certificate number: P-15 / DNI / XCG / 3201/0006 occurred on November 13, 2015 that Company N caused for Paper Single-member Limited Liability Company - Industrial Park M, T district, Ba Ria - Vung Tau province did not fall within the scope of insurance liability assumed by Insurance Company P because the insurance contract number: P-15 / DNI / XCG / 3201/0006 ceased to be effective on May 1, 2015, before the date of occurrence of such loss, November 13, 2015.

II. The Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010  was agreed upon and signed by Insurance Company P1 and Company N on March 26, 2015 (The set of insurance policy documents comprising Insurance Contract, Rules of Insurance and Additional/supplementary Terms/Clauses carrying the adjoining stamp). However, in the course of contract performance, Company N did not fulfill all the commitments in the contract, resulting in the contract’s termination before the time of occurrence of loss or damage, specifically as follows:

According to the certificate of insurance and supplementary terms, the payment term/due date/deadline is prescribed as follows:

1. According to the payment term specified in the Certificate of Insurance, the premium payment term is 15 days from the date of issuance of the Certificate of Insurance”.

Therefore, according to this term of payment of insurance premium, Company N must pay the insurance premium to Insurance Company P by April 10, 2015 (this was also clearly stated by Insurance Company P in the Notice of Premium Collection sent to Company N on March 26, 2015).

2. Under the supplementary clause No. 23: the clause on commitment to paying insurance premium prescribes that: “Notwithstanding any contradiction specified herein and based solely on and without prejudice to article 2 set out below, the contracting parties pronounce and agree that the precondition for indemnity liability under this policy or the certificate of renewal, amendment or provisional certificate of insurance is that any premium due must be paid to and fully received by the Insurance Company, licensed brokers or agents:

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

 (i) The effective date of the insurance policy, renewal certificate, or provisional certificate of insurance, or

 (ii) The effective date specified in each amendment (if any) included in the insurance policy, insurance renewal certificate, provisional certificate of insurance, if that effective date falls on or after the date of announcement of such amendment, or

 (iii) The date of announcement of each amendment (if any) announced in the insurance policy, insurance renewal certificate, provisional certificate of insurance, if the effective date specified in that amendment is ahead of the announcement date.

 (b) If the period of insurance is less than 7 days, falling within the scope of insurance coverage specified in the insurance policy, insurance renewal certificate or provisional certificate of insurance.

When any of the foregoing premiums is not paid in full to the Insurance Company, broker or agent registered as described above, according to the above method and deadline ("Term of commitment to paying the premium"), the insurance under the policy, renewal certificate or provisional insurance certificate will be automatically terminated from the effective date of the contract and the Insurance Company will be relieved of all liabilities from that date".

Therefore, according to this premium payment term, Company N must pay the insurance premium to Insurance Company P by May 1, 2015.

Based on the above payment agreements, before May 1, 2015 at the latest, Company N must pay the premium according to the public liability insurance contract No. P-15/DNI/XCG/3303/0010 to Insurance Company P but, until May 7, 2015, Insurance Company P received the insurance premium from Company N (7 days late compared to the due date specified in the provisions of the supplementary clause No. 23, and 26 days late compared to the due date specified in the payment terms set forth in the insurance certificate).

Therefore, based on the payment terms set forth in the insurance contract; Pursuant to Item a, Clause 2, Article 18 and Clause 2, Article 23 of the Law on Insurance Business; Clause 4, Article 2 of Circular No. 194/2014 / TT-BTC, dated December 17, 2014, effective on February 1, 2015 of the Ministry of Finance, Insurance Company P1 is not liable to pay indemnity for legal liabilities assumed by Company N to the third party in relation to the loss or damage resulting from the explosion in the Biomass boiler No. 3 with a capacity of 30 tonnes / h according to the public liability insurance contract number: P-15/DNI/XCG/3303/0010, occurred on November 13, 2015 at Paper Single-member Limited Liability Company - Industrial Park M, T district, Ba Ria - Vung Tau province because this insurance contract ceased to be effective on May 1, 2015, before the date of occurrence of such loss, November 13, 2015.

III. Boiler insurance certificate No. P-15 / DNI / XCG / 3201/0008 was agreed upon and signed by Insurance Company P1 and Company N on September 30, 2015 (The set of documents included in the insurance policy comprising Certificate of Insurance, Notice of Premium Collection, Rules of Insurance, and Additional Terms carrying Insurance Company P’s adjoining stamp). After consulting this document, Insurance Company P herein gave the following statement:

As Company N has fully discharged their obligations under the contract P-15/DNI/XCG/3201/0008 for insurance for Biomass Boiler No. 2, Insurance Company P will consider paying indemnity according to regulations. This was mentioned in Insurance Company P’s Official Letter No. 130/P-DNI-CV dated November 24, 2015. Currently, the Inspection Company has been invited by mutual agreement by the parties to conduct the inspection or expertise for Biomass boiler No. 2 and the inspection/expertise is underway. Whenever the expertise results, Insurance Company P will proceed to pay indemnity in accordance with regulations.

For the loss or damage to boiler No. 2, Insurance Company P did not evade responsibility as the plaintiff put it. Insurance Company P1 in collaboration with Company N and the Inspection Joint Stock Company B determined the damage value on the basis of which Insurance Company P1 will make compensation as prescribed. Currently, the case is under procedure, so they ask the court to consider not accepting this matter.

IV. The Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010  was agreed upon and signed by Insurance Company P1 and Company N on March 24, 2015 in accordance with law (The set of insurance policy documents comprising Insurance Contract, Notice of Premium Collection, Rules of Insurance and Additional/supplementary Terms/Clauses carrying the adjoining stamp of the Insurance Company P).

According to this insurance contract, the insured location is at Company H, not related to the loss that occurred at Paper Company S.

Hence, they requested the court  not to consider this matter.

V. As for claim for indemnity for human loss filed by the Company N under the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057 dated September 30, 2015, they petitioned the court to reject any claim on the ground that public liability insurance contracts cannot protect hired employees of the insured.

VI. For any loss incurred to the third party under the insurance contract No. P-15/DNI/XCG/3303/0057, Insurance Company P1 is collaborating with Company N and the Inspection Joint Stock Company B to determine the damage value on the basis of which Insurance Company P1 will make compensation as prescribed. Currently, the case is under procedure, so they asked the court to consider not accepting this matter.

B. Comments on the matter No. 9 in the petition to sue filed by Company N on May 17, 2016 as follows:

The calculation of interest rate on late payment of compensation for all lawsuit items is unfounded for the following reasons:

1) Boiler insurance certificate number: P-15 / DNI / XCG / 3201/0006 and public liability insurance contract number: P-15 / DNI / XCG / 3303/0010 ceased to be effective on May 1, 2015 before the date of the loss occurring on November 13, 2015 as stated in given opinions under sections I and II of Part A. This means that the calculation of interest rate on late payment of compensation is unfounded.

2. Boiler insurance certificate number: P-15 / DNI / XCG / 3201/0008 and public liability insurance contract number: P-15 / DNI / XCG / 3303/0057.

On November 24, 2015, Insurance Company P1 has issued the Notice No. 130 / P-DNI-CV, announcing that: “Your company has fulfilled obligation to pay premiums in accordance with regulations, and Insurance Company P will collaborate with/guide you to perform next steps to consider the scope and insurance liability of the listed losses according to this insurance certificate.”

After the loss occured, Insurance Company P hired Inspection Company B to cooperate with / instruct Company N to collect documents to determine the cause and extent of the loss to form a basis for considering compensation for losses under this Insurance Contract (hiring an independent inspection company B to conduct expertise was approved by Insurance Company P and Company N). But until now, Company N has not provided sufficient documents proving the loss according to the written request and instructions given in many meetings held by Inspection Joint Stock Company B. Insurance Company P is responsible for compensation within 15 days from the date of receipt of a complete and valid file in accordance with the Law on Insurance Business, insurance rules and insurance contract in effect. In this case, Company N has not provided sufficient documents as prescribed, so Insurance Company P cannot compensate for Biomass Boiler No. 2 damage. Given this situation, it cannot be assumed that Insurance Company P is late in performing its obligations as put it in the petition to sue filed by Company N.

3. Benchmark time for making the complaint about late fulfillment of compensation obligations:

The loss occurred on November 13, 2015 while Company N complained about the late performance of compensation obligations since January 19, 2015. The date that Company N mentioned for calculation of the interest rate was not related to the time of loss, nor is it related to the Official Letter 130 / PHCO-DNI-CV dated November 24, 2015 that P1 Insurance sent to Company N.

4. Regulations on compensation for late discharge of payment obligations:

Under the Insurance Business Law and insurance rules, the insurer is responsible for paying compensation to the insured within 15 days of receipt of a complete and valid dossier as prescribed.

Insurance Company P has fulfilled its responsibilities in accordance with the terms and conditions agreed by the parties in the insurance contracts and the insurance certificate No. P-15 / DNI / XCG / 3201. / 0006; P-15 / DNI / XCG / 3303/0010 and P-15 / DNI / XCG / 3303/0009. The refusal of compensation based on these Contracts / Certificates is conformable to the commitments made in the Contract and the Law on Insurance Business; Circular No. 194/2014 / TT-BTC dated December 17, 2014, in effect on February 1, 2015, of the Ministry of Finance. From the foregoing reasons, they are asking that the Court dismiss all of the plaintiff's claims.

Regarding the valuation certificate No. 2003 / TDG-CT dated August 22, 2016 of Valuation Joint Stock Company D, Insurance Company P had an objecting opinion against the above valuation certificate because the valuation was not appropriate and not in compliance with the law. After the court explained that the defendant has the right to request a reevaluation, the defendant sent their opinion to the Court to state that using the valuation certificate as a basis to claim insurance indemnity was in breach of regulations of laws on insurance indemnity. They request the court to try the case in accordance with law.

The person with related rights and obligations of Insurance Company P1 represented by Mr. Chu Thanh T gave the following comments:

Agreeing to the defendant's opinion in the self-declaration dated June 27, 2016, the records of mediation and no other comments. The opinions of Insurance Corporation P (Insurance Company P) sent to the Court were also the opinions of Mr. T acting as the legal representative of the person with related rights and obligations of Insurance Company P1.

The person with related rights and obligations of Joint Stock Commercial Bank V represented by Mrs. Ha Thi Thanh H gave the following comments:

- On May 8, 2013, Company N (hereinafter referred to as the customer) pledged the boiler system installed at Joint Stock Company H as a collateral to Joint Stock Commercial Bank V - Branch B (hereinafter referred to as Bank) under the property mortgage contract No. 069/13 / VCB. BH on May 8, 2013. This boiler system installed at Joint Stock Company H was protected under the insurance contract purchased by the customer as follows:

+ Boiler insurance contract number P-15 / DNI / XCG / 3201/0005 dated March 24, 2015 with the first beneficiary which is Joint Stock Commercial Bank V - Branch B, the insurance coverage amount which is 6,500,000,000 VND and the insurance period from April 1, 2015 to March 31, 2016.

+ Public liability  contract number P-15 / DNI / XCG / 3201/0005 dated March 24, 2015 with the first beneficiary which is Joint Stock Commercial Bank V - Branch B, the insurance coverage amount which is 21,000,000,000 VND and the insurance period from April 1, 2015 to March 31, 2016.

- On October 1, 2014, Company N mortgaged assets to the Bank being a boiler system installed at Paper S Company Limited (Boiler No. 2), under Property Mortgage Contract No. 207/14 / VCB.BH on October 1, 2014. The No. 2 boiler system installed at Paper Company S was protected by insurance purchased by the customer as follows:

+ Boiler insurance contract number P-15 / DNI / XCG / 3201/0008 dated September 30, 2015 with the first beneficiary which is Joint Stock Commercial Bank V - Branch B, with the insurance coverage amount which is 5,400,000,000 VND and the insurance period from October 1, 2015 to October 1, 2016.

+ Public liability  contract number P-15 / DNI / XCG / 3303/0057 dated September 30, 2015 with the first beneficiary which is Joint Stock Commercial Bank V - Branch B, the insurance coverage amount which is 21,000,000,000 VND and the insurance period from October 1, 2015 to October 1, 2016.

- On February 6, 2015, Company N mortgaged assets to the Bank being a boiler system installed at Paper S Company Limited (Boiler No. 3), under Property Mortgage Contract No. 055/15/VCB.BH on February 6, 2015. The No. 3 boiler system installed at Paper Company S was protected by insurance purchased by the customer as follows:

+ Boiler insurance contract number P-15 / DNI / XCG / 3201/0006 dated March 26, 2015 with the first beneficiary which is Joint Stock Commercial Bank V - Branch B, with the insurance coverage amount which is 13,000,000,000 VND and the insurance period from April 1, 2015 to March 31, 2016.

+ Public liability  contract number P-15 / DNI / XCG / 3303/0010 dated March 26, 2015 with the first beneficiary which is Joint Stock Commercial Bank V - Branch B, the insurance coverage amount which is 21,000,000,000 VND and the insurance period from April 1, 2015 to March 31, 2016.

The foregoing assets were used to secure Company N’s loans with Joint Stock Commercial Bank V - Branch B under credit facility agreements with the following details:

No.	Contract No.	Lending purposes	Loan amount	Loan term (month)	Applicable interest rate	Outstanding balance
1	0061.15/48.05-HMTD dated 06-02-2015; Appendix No. 01/0061.15/48.05- HMTD dated 15-06-2015 and Appendix No. 01/0061.15/48.05- HMTD dated 16-12-2015	Supplementation of working capital for production and business purposes	8,000	12	7.30%	8,991
2	0050.14/48.05-DTDA dated 11-03-2014	Payment of costs of purchase of brand-new Thaco Auman truck	425	36	10.00%	157
3	0425.14/48.05-DTDA dated 01-10-2014	Payment of costs of purchase of machinery, equipment, supplies and other costs related to investment in construction of boiler equipment system	4,500	48	10.00%	3,226
4	0033.15/48.TN-XE dated 16-04-2015	Payment of costs of purchase of brand-new Thaco Auman truck	561	36	10.00%	358
5	0136.15/48.TN-XE dated 08-06-2015	Payment of costs of purchase of brand-new Thaco Auman truck	564	36	10.00%	392
6	0146.15/48.TN-XE dated 16-06-2015	Payment of costs of purchase of brand-new Thaco Auman truck	319	36	10.00%	221
7	0382.15/15.BL- DTDA dated 12-11-2015	Payment of costs of purchase of machinery, equipment, supplies and other costs related to investment in construction of boiler equipment system	6,000	48	10.00%	5,950
Total			16,300			19,295

- According to the report of the boiler explosion incident of Company N to Joint Stock Commercial Bank V - Branch B on November 16, 2015, at approximately 00:30 AM on November 13, 2015, at S Paper Company, Industrial Park M, district T, Ba Ria - Vung Tau province, the explosion of the No. 3 boiler of customer took place. This incident caused complete damage to the mortgaged assets at the Bank under Mortgage Contract No. 055/15 / VCB.BH on February 6, 2015 of which the value is estimated at VND 13,000,000,000.

- On November 16, 2015, the Bank visited the incident scene and worked with Company N (details provided in the Working Record dated November 16, 2015). The bank required customers to provide details of the mortgage status, and actively worked with Insurance Company P1 to compensate for such damage caused by the incident.

According to the Notice of Acceptance of the case No. 72/2016 / TB-KDTM dated June 2, 2016 of the People's Court of Bien Hoa City on the "Dispute of Insurance Contract", Company N requested the Court to resolve the following specific issues:

1. Recognizing the validity of the Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all losses and damage hereunder.

2. Recognizing the validity of the Boiler Insurance Contract No. P-15/DN1/XCG/3303/0010 dated March 26, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all losses and damage hereunder.

3. Recognizing the validity of the Public Liability Insurance Contract No. P-15 / DNI / XCG / 3201/0005 dated March 24, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all damage resulting from occurrence of the insured incident.

4. Recognizing the validity of the Public Liability Insurance Contract No. P-15 / DNI / XCG / 3303/0009 dated March 24, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all damage resulting from occurrence of the insured incident.

5. Paying Company N the amount of VND 18,184,750,678 as an indemnity for all loss or damage to the Biomass boiler No. 3 under Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26, 2015.

6. Paying Company N VND 633,000,000 as the public liability insurance coverage for human loss or bodily injury under the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057 dated September 30, 2015.

7. Paying Company N VND 1,510,790,352 as the public liability insurance coverage for third party’s property loss or damage caused by the boiler No.3 explosion accident under the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057 dated September 30, 2015.

8. Paying Company N the amount of VND 500,000,000 as an indemnity for all loss or damage to the Biomass boiler No. 3 under Boiler Insurance Contract No. P-15/DNI/XCG/3201/0008 dated September 30, 2015.

9. Paying compensation for damage caused due to the delayed performance of the insurance indemnity obligation after 15 days from January 19, 2015 (recorded in Insurance Company P1’s Official Letter No.130/P-DNI-CV dated November 24, 2015) to the date of first instance trial at the market interest rate on deferred payments: VND 20,828,541,030 x 15 months (temporarily calculated from February 4, 2015 to May 4, 2016) x 9%/year x 150% = VND 3,514,816,298.

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

For the matters raised in Company N’s petition to sue the Insurance Corporation P (Insurance Joint Stock Company P) and at the trial, Joint Stock Commercial Bank V requested the Court to adjudicate according to regulations of law.

The Bank had no comments on the Valuation Certificate No. 2003 / TDG-CT dated August 22, 2016 of Valuation Joint Stock Company D and requested the Court to issue its decision in accordance with law.

In the first-instance commercial business verdict No. 50/2016/KDTM-ST dated October 11, 2016, the People’s Court of Bien Hoa city decided: 

Accepting Company N’s petition to sue.

Forcing Insurance Joint Stock Corporation P (Joint Stock Company P) to:

1. Recognize the validity of the Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all losses and damage.

2. Recognize the validity of the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all losses and damage.

3. Pay Company N an indemnity for all loss or damage to the Biomass boiler No. 3 under Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26, 2015. The value of such indemnity was VND 13,000,000,000;

4. Pay VND 200,000,000 as the amount of indemnity for scene cleanup work.

5. Paying Company N VND 1,510,790,352 as the public liability insurance coverage for third party’s property loss or damage caused by the boiler No.3 explosion accident under the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057 dated September 30, 2015.

6. Paying Company N the amount of VND 500,000,000 as an indemnity for all loss or damage to the Biomass boiler No. 2 under Boiler Insurance Contract No. P-15/DNI/XCG/3201/0008 dated September 30, 2015.

7. Paying compensation for damage caused due to the delayed performance of the insurance indemnity obligation after 15 days from November 19, 2015 to the date of receipt of a full and valid claim (recorded in Insurance Company P1’s Official Letter No.130/P-DNI-CV dated January 24, 2015). This means that, from December 4, 2015 to the first-instance trial date of October 11, 2016, such compensation is calculated at the basic interest rate issued by the State Bank as follows: 15,210,790,352 dong x 10 months 07 days x 9%/year = 1,167,428,159 dong.

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

Adjourning part of the petition to sue that Company N withdrew, including:

- Recognizing the validity of the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all losses and damage.

- Recognizing the validity of the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all losses and damage.

- Paying Company N VND 633,000,000 as the public liability insurance coverage for human loss or bodily injury under the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057 dated September 30, 2015.

- Excluding the amount calculated at the interest rate of 150% on the indemnity amount stated in the indemnity claim due to Insurance Joint Stock Company P’s late payment of their obligation to pay insurance coverage.

- Paying Company N an indemnity for all loss or damage to the Biomass boiler No. 3 under Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26, 2015. The value of such indemnity was VND 4.984.750.678.

Insurance Joint Stock Corporation P (Joint Stock Company P) is obliged to pay the valuation cost of: VND 134,000,000.

In addition, the First Instance Court also decided on the responsibility of delayed judgment execution, court fees and the right to appeal of the litigants.

On October 20, 2016, the defendant of the P Insurance Joint Stock Corporation filed an appeal to the entire First-instance commercial business judgment.

In the Appellate Commercial Business Judgment No. 01/2017 / KDTM-PT dated 06 March 2017, the People's Court of Dong Nai province decided:

Reject the entire appeal petition of Insurance Corporation P (Insurance Joint Stock Company P), upholding the first-instance judgment.

Accepting Company N’s petition to sue.

Forcing Insurance Joint Stock Corporation P (Joint Stock Company P) to:

1. Recognize the validity of the Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all losses and damage.

2. Recognize the validity of the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all losses and damage.

3. Pay Company N an indemnity for all loss or damage to the Biomass boiler No. 3 under Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26, 2015. The value of such indemnity was VND 13,000,000,000.

4. Pay VND 200,000,000 as the amount of indemnity for scene cleanup work.

5. Pay Company N VND 1,510,790,352 as the public liability insurance coverage for third party’s property loss or damage caused by the boiler No.3 explosion accident under the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057 dated September 30, 2015.

6. Paying Company N the amount of VND 500,000,000 as an indemnity for all loss or damage to the Biomass boiler No. 2 under Boiler Insurance Contract No. P-15/DNI/XCG/3201/0008 dated September 30, 2015.

7. Pay compensation for damage caused due to the delayed performance of the insurance indemnity obligation after 15 days from November 19, 2015 to the date of receipt of a full and valid claim (recorded in Insurance Company P1’s Official Letter No.130/P-DNI-CV dated January 24, 2015). This means that, from December 4, 2015 to the first-instance trial date of October 11, 2016, such compensation is calculated at the basic interest rate issued by the State Bank as follows: 15,210,790,352 dong x 10 months 07 days x 9%/year = 1,167,428,159 dong.

Insurance Joint Stock Corporation P (Insurance Joint Stock Company P) must pay Company N the total sum of (3)+(4)+(5)+(6)+(7): VND 16,378,218,511.

Adjourning part of the petition to sue that Company N withdrew, including:

- Recognizing the validity of the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all losses and damage.

- Recognizing the validity of the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24, 2015 between Insurance Company P1 and Insured Company N; Insurance Corporation P (Insurance Joint Stock Company P) must indemnify Company N for all losses and damage.

- Paying Company N VND 633,000,000 as the public liability insurance coverage for human loss or bodily injury under the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0009 dated March 24, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0010 dated March 26, 2015; the Public Liability Insurance Contract No. P-15/DNI/XCG/3303/0057 dated September 30, 2015.

- Excluding the amount calculated at the interest rate of 150% on the indemnity amount stated in the indemnity claim due to Insurance Joint Stock Company P’s late payment of their obligation to pay insurance coverage.

- Paying Company N an indemnity for all loss or damage to the Biomass boiler No. 3 under Boiler Insurance Contract No. P-15/DNI/XCG/3201/0006 dated March 26, 2015. The value of such indemnity was VND 4,984,750,678.

- Regarding costs of judicial proceedings: As Insurance Joint Stock Corporation P (Insurance Joint Stock Company P) is liable to pay the valuation cost of VND 134,000,000, they have to pay that sum.

From the date on which the plaintiff has a request for judgment execution, if the defendant fails to pay the above amount and the cost of valuation, he/she must bear the late payment interest at the basic interest rate prescribed by the State Bank on the amount of late payment at the time of payment.

In addition, the First Instance Court also decided on the court fee.

After the appellate trial, Insurance Corporation P made a petition to review the Appellate Court mentioned above according to cassational review procedure.

In the Decision No. 45 / QDKNGDT-VC3-KDTM dated February 8, 2018, the Procurator General of the Supreme People's Procuracy in Ho Chi Minh City protested against the above-mentioned appellate court's judgement, requesting the Committee of Judges of Superior People’s Court in Ho Chi Minh City to adjudicate to abolish the above-mentioned Commercial Business Appellate Verdict and cancel the entire first-instance Commercial Business Judgement No. 50/2016 / KDTM-ST of October 11, 2016 of the People's Court of Bien Hoa city, Dong Nai province; handing over the case file to the People's Court of Bien Hoa city, Dong Nai province for a first instance re-trial in accordance with the law.

At today's trial, the representative of the High-level People's Procuracy in Ho Chi Minh City requested the Committee of Judges of the High-level People's Court in Ho Chi Minh City to accept the protest of the Procurator General of the High-level People's Procuracy in Ho Chi Minh City.

 [1] Records and evidence included in the case file showed that:

 [2] Company N supplied, installed and operated 03 boilers at Industrial Park M, T district, Ba Ria - Vung Tau province for Paper Joint Stock Company (Paper Company). Also, Company N and Insurance Company P1 entered into  05 boiler insurance contracts and public liability insurance contracts as follows: Boiler insurance contract No. P-15 / DNI / XCG / 3201/0006 dated March 26, 2015 (Contract No. 06); Public liability insurance contract number P-15 / DNI / XCG / 3303/0010 dated March 26, 2015 (Contract No. 10); Boiler insurance contract No. P-15 / DNI / XCG / 3201/0007 dated September 30, 2015 (Contract No. 07); Boiler insurance contract No. P-15 / DNI / XCG / 3201/0008 dated September 30, 2015 (Contract No. 08); Public liability insurance contract number P-15 / DNI / XCG / 3303/0057 on September 30, 2015 (Contract No. 57)..

 [3] About 00:30 AM on November 13, 2015, at the Paper Company happened a No. 3 boiler accident. The Investigation Police Agency - Police Department of Ba Ria - Vung Tau province solicited the expertise on the causes of the incident and concluded the cause of boiler No. 3 explosion was technical errors, and there were no sign of crime. The boiler explosion incident not only caused damage to Company N's property, but also affected the property of the Paper Company. Since the damaged property at the paper company falls within the scope of insurance coverage according to the insurance certificate, Company N is compensated for the damage value according to the provisions of law.

 [4] However, Insurance Company P1 said that Company N delayed payment of their insurance premium, so Contract No. 06 and Contract No. 10 become ineffective for the following reasons: The last day to pay premium was May 1, 2015, but on May 7, 2015, Company N managed to transfer premium payment to Insurance Company P1. After receiving the insurance premium from Company N, the Insurance Corporation P and Insurance Company P1 had no feedback and sent no written notice of late payment of such insurance premium. Although two contracts were no longer effective from May 1, 2015, Insurance Company P1 still received and issued  VAT invoice and reported tax on these two premiums paid by Company N. This meant that the Insurance Joint-stock Corporation P and Insurance Company P1 were aware of the late payment of insurance premiums by Company N and admitted the effect of the two above insurance contracts.

 [5] Therefore, when an insurance event occured, the Insurance Joint-stock Corporation P  must be responsible for compensation according to the contract between the two parties.

 [6] As for loss or damage and indemnity, the Court sees that: Article 48 of the Law on Insurance Business prescribes that: An expertise on loss or damage must be conducted to determine causes and extent of such loss or damage. The findings in this expertise are a basis to determine the amount Insurance Corporation P must pay. However, the decision of the Court of First Instance and the Court of Appeal to carry out the valuation of property merely aimed at having the ground to compel Insurance Corporation P to pay compensation was frivolous because Clause 15 of Article 4 of the Law on Prices prescribes that: Valuation means the valuation of monetary value of assets by a competent agency or organization under the Civil Code according to the market price at a certain place or point of time for a certain purpose according to valuation standards.

 [7] On the other hand, the provisions of Insurance Contract No. 06 stipulate the deductible as follows: The deductible is the amount that the insured has to pay in case of loss. The deductible in this Contract which is 5% of the minimum loss value equals VND 10,000,000/each loss. However, the First-instance Court and the Appellate Court did not take into account this agreement in the contract whilst forcing Insurance Corporation P to pay compensation for the entire damage. This did not conform to the contract, causing damage to benefits of Insurance Joint Stock Corporation P.

 [8] Under Insurance Contract No. 08, after the occurrence of the incident, the two parties agreed to hire Inspection Joint Stock Company B to carry out the expertise. However, Inspection Joint Stock Company B did not fully value the loss because of Company N’s failure to provide sufficient documents upon request, and the Court of First Instance and the Court of Appeal did not consider this issue, and forced the Insurance Joint Stock Corporation P to compensate Company N through lack of evidence. This is unfounded.

 [9] Company N did not provide evidence to prove that compensation for material damage was paid to the third party, but both the Court of First Instance and the Court of Appeal forced Insurance Joint Stock Corporation P to pay VND 1,510,790,352 of public liability indemnity under the public liability under Contract No. 10 and No. 57. This was unfounded.

 [10] In addition, the technical inspection certificate issued by Industrial Testing Center II identifies that: The inspection was carried out before October 2013, but the insurance contract and valuation certificate determined that the BIOMASS dryer was manufactured in 2014, but the first-instance Court and the Appellate Court did not clarify this issue. However, they issued the decision to force Insurance Joint Stock Corporation P to pay compensation to Company N. This was unfounded.

In light of the aforesaid grounds;

 “[4]…After receiving the insurance premium from Company N, the Insurance Joint Stock Corporation P and Insurance Company P1 had no feedback and sent no written notice of late payment of such insurance premium. Although two contracts were no longer effective from May 1, 2015, Insurance Company P1 still received and issued  VAT invoice and reported tax on these two premiums paid by Company N. This meant that the Insurance Joint-stock Corporation P and Insurance Company P1 were aware of the late payment of insurance premiums by Company N and admitted the effect of the two above insurance contracts.

 [5] Therefore, when an insurance event occured, the Insurance Joint-stock Corporation P  must be responsible for compensation according to the contract between the two parties.”

Pursuant to Article 337, 343 and 349 in the Civil Procedures Code.

1. Accepting the protest No. 45 / QDKNGDT-VC3-KDTM dated February 8, 2018 by the Procurator General of the High-level People's Procuracy in Ho Chi Minh City.

2. Adjourning the Appellate Commercial Business Decision No. 01/2017 / KDTM-PT dated March 6, 2017 of the People's Court of Dong Nai province, and adjourning all the first instance commercial business judgment No. 50/2016 / KDTM-ST dated October 11, 2016 of the People's Court of Bien Hoa city, Dong Nai province between Company N, as the plaintiff, and Insurance Joint Stock Corporation P, as the defendant, handing over the case file to the People's Court of Bien Hoa city, Dong Nai province for a first instance trial in accordance with the law.

3. Making a cassational review decision effective from the date of issuance of the decision.