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Insurance giant Chubb has lost its bid to overturn a court ruling that it should pay US$1.15mn to a commodity trader which fell victim to the theft of several cargoes of tin concentrate during their journey from Rwanda to Malaysia.

The Singapore High Court’s appeals division upheld a 2022 decision that Chubb Singapore should pay the claim because it had not sufficiently proved that the theft took place on the premises of the seller, rather than during transit, and therefore was not covered by the all-risks marine cargo insurance policy.

One of three appellate judges disagreed with the majority judgement and penned a dissenting opinion.

The judgement, handed down late last year but only published on May 3, shows that Sizer Metals Pte Ltd, a Singapore subsidiary of the Indian-headquartered trader, purchased 86 metric tonnes of tin concentrate from Excellent Mining Ltd, a company based in the Rwandan capital Kigali, between September 2017 and May 2018.

But when the 133 drums were offloaded at their destination in the Malaysian port of Penang in July and September 2018, instead of containing the expected tin, the drums were filled with iron oxide described by an expert witness as “worthless”.

During the original 2022 trial, Sizer convinced the judge that the available evidence – which included various inspection and investigation reports and a probe by the Rwandan authorities – suggested that the cargoes had been tampered with at some point between leaving a bonded warehouse in Kigali and arriving at the Tanzanian port of Dar es Salaam for the sea voyage.

The drums were welded shut and further secured with tamper-proof clips at Excellent Mining’s compound in Kigali, according to the judgement. After inspection at a bonded warehouse in the same city, three more security seals were added to each drum.

When the shipments were inspected in Malaysia, these seals were intact and marks where the drums had been cut into and welded shut again had been painted over, leading the judge to conclude that “the swaps were not done by amateur thieves but by a professional and well-organised gang of thieves”.

Chubb argued at the trial that there was evidence suggesting the switching of metals took place on Excellent Mining’s property, including that the iron oxide contained traces of metals which are found in Rwanda but not in Tanzania, and that the paint covering the weld marks was the same as that found on Excellent Mining’s premises.

But the judge found that the difficulties of stealing the large quantities of tin and replacing them with the iron oxide meant it would have been “logistically impossible” to pull off the heist at Excellent Mining’s premises, which were patrolled by security guards, overseen by cameras and located in a populated area. The company director also lived in a house in the same facility.

While there was no direct evidence of when the theft occurred, the judge concluded it was most likely to have taken place during the more than 1,400-kilometre, multi-day trip to Dar es Salaam, during which the cargo’s security was at its weakest.

In its appeal, Chubb argued that the original judge wrongly reversed the burden of proof in some instances by ruling out possibilities – such as that the theft took place in Penang – instead of requiring Sizer to prove that the metals were not stolen there.

The insurer also argued there was not enough evidence to support the judge’s conclusion that the theft occurred between Kigali and Dar es Salaam and the judge should not have relied on Sizer’s expert witness, Nathan Wheeler, whose evidence it criticised.

The judge’s decision also ran counter to other available evidence, Chubb claimed.

But the appellate judges found that the trial judge “did not err in applying a method of elimination which entailed eliminating the possible locations of the thefts to determine the true state of affairs”.

The appeals judges found Chubb’s line of attack was “mischievous” and upheld the trial judge’s decision to rule out the possibility that the tin was stolen in Penang, agreeing that it was a “belated suggestion” contrary to the testimony of the insurer’s expert witness and its own written case.

Chubb had failed to sufficiently challenge the evidence produced by Sizer to argue that the thefts took place during transit, the appeals judges ruled. They dismissed the insurer’s theory that the heist occurred on Excellent Mining’s property because it would have required collusion from the company’s employees, which there was no evidence of.

In a dissenting opinion, Justice Woo Bih Li said he would have allowed Chubb’s appeal and quashed the trial judge’s original decision, saying that Sizer had not provided enough evidence to establish a prima facie case that the tin was nabbed  during transit.

He said security at Excellent Mining’s facility was questionable and that the judge was wrong to rule out the possibility that the mining company or its staff could have been complicit in the theft.

If it was a “smash-and-grab” job during the journey to Dar es Salaam, the thieves had no motive to replace the stolen goods with iron oxide, the judge wrote.

The thorough re-sealing of the drums “was not just to facilitate a quick get-away but so that the theft could be repeated another three times,” he wrote. “This in turn suggests that the thieves had inside knowledge that there would be other shipments of tin concentrate to the same buyer, using the same purported route.”

“There are too many unknowns,” the judge wrote. “I do not say that the thefts did occur at Excellent Mining’s premises or outside it before the transit period. Rather, that Sizer has not proved that the thefts had occurred during the transit period.”

The other two judges said that for the original judge to consider complicity, it would need to have been argued by Chubb.

A spokesperson for Chubb declined to comment. Sizer did not respond to a request for comment via its website.