Defending a large insurance company

SBH Law Offices team successfully defended in court a large insurance company in a dispute over payment of insurance compensation under the insurance agreement on financial risks. 
Background of the case
The insured, a large Belarusian manufacturer and exporter of high-tech equipment, contracted with a Belarusian insurer to insure against losses that the insured might incur as a result of the counterparty's insolvency (inability to fulfil its obligations) under payment obligations with respect to the goods supplied under a foreign trade purchase and sales contract.
The policyholder delivered the goods under the contract, but the buyer failed to pay.
The insurer held that the non-payment of the delivered goods did not constitute an insured event, so the policyholder sued the insurer to recover the insurance benefit.
The insured won in the court of first instance
The court of first instance agreed with the insured's position and satisfied the claim stating that the payment of insurance compensation was unlawful and the insurance event had occurred.
Successful appeal by SBH Law Offices team and protection of insurer's rights
SBH Law Offices attorneys representing the insurer appealed. The court of appeal agreed with the defence counsel's contrary position, reversed the trial court's decision and dismissed the insured's claim in its entirety.
According to the insurance policy and the insurance rules, the insured events included losses caused by a breach (non-performance, improper performance) of obligations under the contract by the insured's contractor due to the insolvency of the contractor, in particular, the inability to fulfil obligations due to objective circumstances characterising its property status.
The court of appeal pointed out that it was true that the insured's counterparty had not fulfilled its obligation to pay for the goods delivered by the insured. However, according to the insurance rules, in order for an insured event to be recognised as an insured event, there must be evidence of insolvency.
The insured did not provide evidence of the contractor's insolvency or insufficiency of its property status to fulfil its obligations. The fact of non-payment for the goods under the contract is not in itself evidence of insolvency or insolvency.
Outcome of the case
There was no evidence of the occurrence of the insured event provided for in the insurance contract and the insurance benefit was not payable.
The Court of Cassation, to which the policyholder appealed, agreed with the conclusions of the Court of Appeal.

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