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Insurance, causation and a SASRIA peril


In this case  the insured sued the primary insurer and SASRIA in the alternative in seeking an indemnity for its underground mining earthmoving equipment irreparably damaged when the mine in which the equipment was operating was flooded.

The primary policy excluded the SASRIA perils.  The SASRIA policy covered a labour unrest peril.

The question was whether the loss of the equipment was caused by labour unrest.  In considering the legal cause of the damages suffered by the insured, the High Court applied the test set out in Guardrisk Insurance Company Limited v Café Chameleon CC 2021 [2] SA 323 (SCA at 37 – 41).

The mine’s management had switched off a generator used to power pumps at the mine which extracted underground water.  Those generators were removed from the mine by the owner of the generators which hadn’t been paid.

SASRIA contended that caused the insured’s loss.  The court however held that the presence or absence of the generator was irrelevant to the loss.

The question was who was responsible for the failure to maintain the pumps in operation.

The court said that the “answer is plain” and the cause was the withdrawal of labour including the labour of the pump attendants; the prevention of anyone else manning the pumps by denying access; the cutting of cables to the pumps all done with the clear intention of hurting the mining operation.

The court said it wasn’t the removal of the generator that was the cause of the losses but rather the vandalism of the workers which rendered the pumping operations impossible and which in the chain of causation resulted in the mine being lost to flooding.  The court also said that the matter wasn’t a case where it could plausibly be argued that there was more than one cause.  The chain of events was unequivocally linked between the workers seizure of the shaft, their vandalism and violence and the subsequent flooding.

The body of evidence proved that the cause of the losses suffered by the insured was the labour unrest which was a peril for which SASRIA was liable to the insured.


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