Legal Update 14 of 2017

Can the delay to produce the necessary documents in an insurance claim allow the insurers to deny the claim by the Company?


CASE: Hong Leong MSIG Takaful Bhd (previously known as Hong Leong Tokio Marine Takaful Bhd) v Shantawood Manufacturing Sdn Bhd [2016] 6 MLJ 32



  • Shantawood was in the business of manufacturing furniture and had plants located on a large piece of land consisting of more than 20 buildings or factories. 
  • They had insured the factories on the land with Hong Leong MSIG Takaful Bhd (HLM) by way of three Takaful certificate [policies]. 
  • Shantawood’s policies cover building, plant, machinery and office equipment as well as mechanical and electrical.
  • Separate fires occurred at different times and locations. Due to the fire, Shantawood suffered losses on the buildings, plant, and machinery as well as stocks. 
  • They informed HLM of the fire immediately. HLM then appointed adjusters who requested for detailed documents from Shantawood. 
  • However, even after Shantawood provided the necessary cooperation, the adjusters continued to demand documents within an unreasonable time frame.
  • This then caused Shantawood to complain to HLM. The adjusters then said Shantawood were unwilling to cooperate which resulted in the rejection of the claim by HLM. Shantawood then commenced an action against HLM. 
  • The High Court found HLM liable and allowed the claim. Hence, the present appeal. 


DECISION: Appeal dismissed


  • The appeal was dismissed on the following grounds;
    • It was unreasonable to expect documents during the period when the fire was still raging.
    • In fact, there were numerous letters requesting for more documents and detailed quotations which kept Shantawood in an endless loop of paper work.
    • Shantawood’s claim was huge and they would require time to produce the documents.
    • Such request and delay in providing the documents were not a blatant disregard of any express term of the Takaful contract. Therefore, there was no breach of the Takaful contract.
    • There was ample evidence to prove that Shantawood suffered losses and damage due to the fire. 



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