SUPREME POWER AUTO SDN BHD v LIBERTY INSURANCE BERHAD PIHAK TERKILAN CHONG YING KEONG

Case Significance

Illustrates how a court evaluates fire-investigation expert evidence under NFPA 921 to find a fire accidental, and confirms that an insurer relying on a storage warranty to avoid a claim must prove the warranty was breached.

This High Court decision at Kuala Lumpur, in the Commercial Division, resolves a group of consolidated insurance claims arising from a fire that destroyed a single-storey factory, brought by the insured company and related insured parties against several insurers. The insurers resisted the claims on two principal grounds: that the fire had been deliberately caused rather than being accidental, and that the insured had breached a storage warranty in the policy that restricted the quantity of flammable liquids that could be kept on the premises, so that the insurer was entitled to avoid liability. The trial turned substantially on expert evidence about the cause and origin of the fire.

The court engaged closely with the scientific evidence, framed by reference to the National Fire Protection Association's NFPA 921 Guide for Fire and Explosion Investigations. It examined the competing expert analyses, including the "multiple seats of fire" theory advanced to suggest an incendiary origin, the question whether there had been full-room involvement, and whether low-level burning could indicate separate, deliberately set fires. The court found that the experts asserting an incendiary fire had failed to support their narrative, and it concluded, on the first question, that the fire was accidental and not deliberately caused.

On the second question, whether the insured had breached the warranty restricting the storage of flammable liquids, including the limit on the total volume of liquids giving off flammable vapour, the court found that the warranty had not been breached, so that the insurer could not avoid liability under it. Both questions having been answered in favour of the insured parties, the court held the insurers liable and ordered them to pay the costs of the trial, fixed in a total sum apportioned across the consolidated suits. The judgment is a detailed illustration of how a court evaluates fire-investigation expert evidence under NFPA 921 to determine whether a fire was accidental, and of the burden on an insurer relying on a storage warranty to avoid a claim.