PUNJA and Sons Ltd has won a breach of contract court case against New India Assurance Company Ltd. In doing so, the Court of Appeal has ordered New India Assurance Company Ltd to pay $1.2m to Punja and Sons Ltd.
On February 19, 2003, a fire caused damage to the Ocean Soaps Ltd factory that is owned by Punja and Sons Ltd.
An insurance claim made by Punja and Sons Ltd saw New India Assurance Company Ltd “took up the position that the fire was a result of a malicious act”, states the Court of Appeal judgment dated November 29.
Punja and Sons Ltd had sought damages for consequential loss suffered as a result of breach of contract.
“This was in addition to the claims under the insurance policy. They rely on the delay on the part of the respondent in making progress payments and settlement of the insurance claim and wrongly invoking malicious damage limitation as the breaches,” stated judges Justice Eric Lloyd Basnayake, Justice Susantha Lecamwasam and Justice Viraj Dayaratne.
The court awarded $147,200 as indemnity costs on the loss of a transformer, $375,000 as VAT claim, $694,699 as litigation-related costs.
A 10 per cent interest has been awarded on all the claims from December 1, 2004.
