The Cabinet is likely to approve the draft of 'Pakistan Marine Insurance Bill 2009', aimed at enacting Pakistan's own marine law and removing contradictions, sources in Commerce Ministry told Business Recorder. They said that the existing statute for the insurance sector in Pakistan, viz the Insurance Ordinance 2000, specifically excludes the application of Pakistani law to marine insurance policies in terms of substantive and jurisdictional issues.
Adequate protection is, therefore, not available to marine insurance companies, their claimants or principal debtors in a marine insurance claim. Such laws are required to insure goods shipped all around the world through sea liners. Marine insurance insures ships/hulls; goods/cargo; earnings (such as freight passage money, commissions or profits); and liability (protection and indemnity).
Through a contract of marine insurance, the insurer undertakes to indemnify the insured in a manner and to the extent thereby agreed against marine losses incidental to marine adventures in which ships, goods or other movable property are exposed to maritime perils.
According to sources, in the absence of a specific body of legislation for marine insurance, Pakistani courts have to-date been constrained to rely upon the British Marine Insurance Act 1906 for adjudication of marine insurance cases. It has been observed, however, that this application sometimes leads to problems of jurisprudence because of non-binding nature and piecemeal application of the British MIA 1906; and also due to its duplication with some Pakistani laws.
Sources said that the Cabinet had discussed the draft law a couple of months ago and gave approval, in principle, subject to vetting by the Ministry of Law and Justice. "We have again submitted the draft law to the Cabinet as Law Ministry has vetted it," sources added.