Global Process Systems Inc v Syarikat Takaful Malaysia Berhad (The “Cendor MOPU”)

Global Process Systems Inc and another v Syarikat Takaful Malaysia Berhad is a Supreme Court case concerning a marine insurance policy on cargo, specifically the oil rig "Cendor MOPU." The rig, originally called the "Odin Liberty," was a self-elevating mat-supported jack-up rig that was purchased for conversion into a mobile offshore production unit. The insurance policy covered the loading, carriage, and discharge of the oil rig from Galveston, Texas, to Lumut, Malaysia. The rig's legs broke off during the voyage, leading to the claim under the policy. The insurers rejected the claim, arguing that the loss was due to the inherent vice or nature of the subject matter insured, which was an exclusion in the policy. The trial judge, Blair J, rejected this argument and found that the proximate cause of the loss was an insured peril in the form of a "leg-breaking wave." The Court of Appeal upheld this decision.

The Supreme Court considered whether the loss was proximately caused by the inherent vice or nature of the subject matter insured or by an insured peril, specifically perils of the seas. The court found that the loss was caused by a fortuitous external accident or casualty, which was an insured peril, and not by the inherent vice of the rig. The court relied on the definition of inherent vice provided by Lord Diplock in Soya GmbH Mainz Kommanditgesellschaft v White, which states that inherent vice refers to the risk of deterioration of the goods shipped as a result of their natural behaviour in the ordinary course of the contemplated voyage without the intervention of any fortuitous external accident or casualty. The court held that the loss occurred due to the interaction of the rig's physical condition and the sea conditions encountered during the voyage, which was a fortuitous event.

The final orders of the Supreme Court were to dismiss the appeal, affirming the decisions of the trial judge and the Court of Appeal. The insurers were held liable for the loss of the rig's legs, as the proximate cause of the loss was an insured peril, not the inherent vice of the rig.