Scope of the protection for extended forgery and the criteria for the interpretation of the contract

Published 29 September 2021

In arbitration, a dispute arose between an insurer and a pension fund, where the scope of the extended falsity protection was discussed, in order to establish whether the coverage granted was restricted to material forgery (the material alteration of a document) or if it could include the concept of ideological forgery (unaltered document containing statements contrary to the truth). Characteristic concepts of the Colombian legal regime.

In the area of insurance, there was no clarity about the scope to be given to the protection in question, since the policy does not distinguish these concepts and refers simply to cases in which the insured has suffered a loss by having acted on the basis of written documents or instruments that: "(i) have been falsified in terms of their signature; (ii) have been increased; (iii) have been altered or have been lost and stolen."

The parties did not define these terms, generating debate regarding the extent – or restriction – that should be given to the contracted protection.

Despite acknowledging that the insurance contract is of restrictive interpretation, the Court noted that this does not imply an absolute attachment to the literalness of the contract, stressing that the real will of the parties "lies at the basis of the entire system of contractual interpretation, including the interpretation of the insurance contract".

On the basis of the above, the Court first makes an analysis of comparative law to establish the usual scope of the protection of extended counterfeiting and its understanding in the insurance market, concluding that its original scope is restricted to the material alteration of documents, without having considered the ideological forgery.

Subsequently, when analysing the pre-contractual phase in the specific case, it establishes that the insured, knowing the applicable text, did not make any objection, nor did he request any modification to the protection in question, while for other protections and exclusions he did require adjustments and modifications. The foregoing, in the opinion of the Court, indicated that the will of the insured was to take the protection in its original understanding, that is, restricted to the protection of material forgery.

This decision not only gives clarity on the scope of the protection under study, but also sets an important precedent in terms of the interpretation of the insurance contract.