Conditions precedent to legal action stated in policy

Today case on Nigerian Insurance Court Cases blog:

ISSUES:
Contract of Insurance, Conditions precedent to legal action stated in policy, instituting suit without fulfilling conditions present, arbitration and award




Yahaya Rabo -Plaintiff
Leadway Insurance -Defendant

Suit at the high court of Nigeria central state on june 18, 1975 before;   
•Bello SPJ
 
COUNSEL:   
•Baba Adi for plaintiff
•Aluko-olokun for defendant
 
FACTS:
The plaintiff insured his car with the defendant under a policy of insurance. The policy of insurance a conditions that dispute in any claim arising from the policy of insurance that must be submitted to arbitration and award made and "making of an award shall be a condition precedent to any right of action against the insurance company". The plaintiff sued without going to arbitration. On application to strike out the suit
 
HELD:
The adjudication of the issues raised by the pleadings in the suit by arbitration is a condition precedent to instituting the suit by the plaintiff, and the failure to comply with the conditions is a defense to any premature suit.
 
RULING:

Bello SPJ: "pleadings have been completed and the case is set for trial. The defendant applies to strike out the case on the ground that the condition precedent to instituting has not been compiled with."

"The pleadings of the party show on 3rd december, 1974 the plaintiff insured his motor vehicle for N1,600 under a policy of insurance with the defendant against loss or damage by accident. The plaintiff paid the premium and on 17th january, 1975 the motor vehicle was destroyed by fire. The plaintiff ordered an indemnity in accordance with the term of the insurance policy from the defendant who refused to meet the demand. Hence the plaintiff instituted this suit claiming N1,600 being the value of the motor vehicle, N200 as special damages and N1,200 as general damages."

In paragraph 5 and 7 of their defense the defendants:
 

"The defendants pleads that the plaintiff is not entitled to bring this suit because under the policy of insurance which is the basis of this suit, the defendant should have requested for the dispute between him and the defendant to be settled by arbitration as approved for in the insurance policy"

"The defendant will by the way of a preliminary point raise the issue that the plaintiff is not entitled to bring this suit"
At the hearing of the application of the policy of insurance is admitted by consent as exhibit 1. The counsel for the defendant relies on conditions 8 and 9 of the policy. He submits that's as the parties have not gone to arbitration, the suit is premature. The counsel for the plaintiff contends that the plaintiff has written a letter requesting the defendant to settle the claim and the letter has done nothing. He submits the letter was sufficient request for the defendant to appoint an arbitrator if the defendant had so desired"

Clause 8 of the policy:
 

"All the difference arising out of the policy shall be referred to the decision of an arbitrator to the appointed in writing by the parties in difference or if they cannot agree upon a single arbitrator to the decision of two arbitrators one to be appointed in writing by each of the party within one calendar month after having been required in writing to do so by either of the parties or in case the arbitrators do not agree to an umpire appointed in writing by the arbitrators before entering upon the reference. The umpire shall sit with the arbitrators...and making of an award shall be a condition shall be precedent to any right of action against the company"
 

"The due observance and fulfillment of the terms conditions and endorsements of this insurance policy is so far as they relate to anything to be done or complied with by the insured...shall be condition precedent to any liability of the company to make any payment under this policy of insurance"

 "It is clear from the forgoing that adjudication of the issues raised by the pleadings in this suit by arbitration is a condition precedent to instituting this suit by the plaintiff. It has not been pleaded that he requested the defendant in writing to appoint a single arbitrator and he has not appointed his own arbitrator. The letter pleaded is only a request to settle the claim. I find no arbitration proceedings have been taken and no award made. I find that condition precedent to instituting the suit has not been fulfilled. "

This suit is on all fours with Ewer's case (supra) in which Mackinon J held that where a condition of policy of insurance requires that any pecuniary claim shall be settled by arbitration, and makes the obtaining of such arbitration award a condition precedent to any right of action or claim on the policy of insurance, failure to comply with the condition is a defense on the terms of the policy of insurance to any premature claim. The application succeeds and the claim is struck out, application granted.
 
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