8 and 9 April 2020, a sudden cold snap and heavy snowfall occurred, harming an orchard. The nets installed to protect against hail and their supporting reinforced concrete pillars could not withstand the weight and collapsed, resulting in breakage and irreparable damage to the part of the orchard.

9 April 2020 the Agricultural Department of Jomboy District, the Samarkand Regional Department of the Horticulture and Greenhouse Development Agency, the Council of Farmers, Peasants, and Private Landowners of Jomboy District, and representatives of the Claimant drawn up a report regarding this incident [the ‘Inspection Report’]. The report stated that due to the heavy snowfall the claimant’s 50.41 hectares of orchard were damaged and destroyed.

According to the report of the appraisal organization, the damage caused to the orchard was equal to 21 bln Soums. The claimant applied to the respondent (insurance company) requesting full payment of the insurance compensation. The insurance company refused to pay, stating that the damage was caused by snowfall, which was not listed as an insured event in the insurance contracts.

As a result, the Samarkand Regional Branch of the Chamber of Commerce and Industry, acting in the interests of MChJ (the Claimant), filed a lawsuit against the insurance company (the Respondent). The Claimant demanded (1) 8,3 bln soums in insurance compensation, (2) 25 mln soums of legal fees (as damages), and (3) 4 mln soums paid for membership fees (as damages) in the Chamber.

8 June 2022 the court of cassation [instance] overturned the acts of lower courts and handed down a new decision. The claim was partially satisfied, ordering the Respondent to pay the claimed insurance compensation and prepaid state duties.

The Deputy Chairman of the Supreme Court filed a protest over the court documents, requesting a re-examination of the case under re-cassation procedures.

Clause 3.1 of the insurance [of pledged objects] contracts between the parties defines the circumstances deemed as insured events. According to this clause,

insurance compensation shall be paid to the insurer and/or beneficiary in cases of fire, explosion, storm, hail, collapse, landslide, land subsidence, underground water movement, mudflow, lightning strike, earthquake, frost, freezing, loss of the insured object, diseases, flood, failure of water supply, heating, sewage or fire extinguishing systems, and intentional unlawful actions by third parties (theft, robbery, assault) that lead to complete destruction or loss of intensive orchards, as well as all environmental hazards.

The cassation court considering that the loss of insured object under Clause 3.1 of insurance contracts is not necessarily linked to any specific event, that the insurance contracts do not specify that loss of insured object can only be considered an insured event when caused by a specific incident or person’s actions, that the very fact of loss of insured object constitutes an insured event regardless of causative factors, that the damage to claimant’s 50.41 hectares of broken, damaged and completely destroyed apple orchards was fully confirmed by the official report and letter from the Horticulture and Greenhouse Development Agency, that the valuation report verified that the damage caused to the insured object amounted to 21,273,502,609 soums, that the occurrence of an insured event and resulting damage were supported by evidence, that there was a causal connection between the occurred event and the damage to the property, satisfied the claim for the insurance compensation.

[The Collegium has cited Nr 11 RPL SCC dd 29 November 2017 No 45.]

In response to the Claimant’s letter No 179 dated 14 October 2020, the Inspection Report was amended. These additions noted that the sudden temperature drop on 8-9 April 2020 and the resulting heavy snowfall should be considered as the cause of damage to the trees, that the snowfall occurred as a consequence of the temperature drop, that there exists an immediate causal connection [uzviy-sababli bog‘liqlik] between the temperature drop and the destruction (damage) of a certain portion of the trees.

Appraisal report No 1 dated 12 June 2020 noted that the damage was caused to both the fruit trees and the hail protection nets installed over them due to the snowfall and that the snowfall was not listed as an insured event under the insurance contract.

In the protest appeal, the Respondent stated that the definitions recognized as insured events under the contracts, such as ‘loss’, ‘cold weather’ and the contractually not recognized ‘heavy snowfall’ as well as their interrelation, causes, and consequences, were not studied. Furthermore, the issue of whether the damage caused to trees and infrastructure was related to the failure to remove the anti-hail netting was also not examined.

[The Collegium has cited Art 363 I CC on the first and second rule of construction of contracts.]

The cassation court correctly concluded that Clause 3.1 of the insurance contracts does not specify that the loss of insured object must result from any specific event or person’s actions to be considered an insured event. Since the contract explicitly defines the ‘loss (destruction) of the object’ as a distinct insured event, the court correctly found that an insured event occurred in relation to the insured object, which resulted in the damage, and the claim for insurance compensation should therefore be satisfied.

However, the court reasonably rejected claim for legal services and the claim for Chamber membership fees. Chamber membership fees cannot be considered damages. The claimant failed to provide evidence that these specific advocates or their firm in fact rendered services [while] the lawsuit itself was prepared and filed by the Chamber of Commerce [itself] on the claimant’s behalf.

The protest appeal also noted the failure to examine whether the non-removal of hail protection nets contributed to the damage of both trees and infrastructure. During proceedings, the Claimant explained their standard netting procedures, including winter removal and early spring reinstallation, gradual tensioning of nets, completion of net installation over 50 hectares before the incident, and their typical practice of installation in early April and removal in September. This demonstrates that tree netting constituted routine technical operations in the claimant’s activities, and therefore the mere presence of nets cannot reasonably be linked to an increased damage. In this case, the cassation court properly applied substantive and procedural legal norms, issued a lawful and well-founded decision corresponding to the case circumstances, and lacks grounds for modification or annulment. The court correctly interpreted the insurance contract provisions and evaluated all evidence presented, reaching appropriate conclusions regarding both the insured event and the rejected claims for additional damages. The technical aspects of the orchard netting system were sufficiently examined and found irrelevant to the damage assessment, confirming the thoroughness of the court’s review process.