1. Keppel.docx

INSURANCE CASE DIGEST KEPPEL vs PIONEER Facts: KCSI and WG&A entered into a Shiprepair Agreement where KSCI would renovate and reconstruct WG&A’s M/V Superferry 3 using its dry docking facilities. On the course of its repair, the ferry was gutted by fire and was declared by WG&A to be total constructive loss. It filed a claim against Pioneer which then paid 360M as evidenced by Loss and Subrogation Receipt. Thereafter, it filed a request for Arbitration against Keppel before the Construction Industry Commission (CIAC). Keppel argues that Pioneer cannot be subrogated since it is not the real party in interest and that it cannot be compelled to pay the full amount of 360M Issue: WON subrogation is proper? Ruling: Yes. The payment by the insurer to the insured operates as an equitable assignment to the insurer of all the remedies that the insured may have against the third party whose negligence caused the loss.