Moosajees Ltd. v. Insurance Corporation of Ceylon – 1978_79 volume 2 page 059

In the case between Moosajees Ltd. and Insurance Corporation of Ceylon, the court addressed whether the insurer’s letter (D1) constituted a rejection of the plaintiff’s claim, thereby invoking the forfeiture clause which required legal action to be commenced within three months. It was held that ambiguous language, especially where penal consequences are involved, must be construed in favor of the insured. The findings established that the insurer’s letter did not amount to a clear rejection of the claim; the action was therefore not time-barred. This decision reaffirmed the principle that forfeiture clauses with penal consequences must be construed strictly, relying on established contract interpretation standards and precedents, signifying that insurers must reject claims in clear, unamb