Piracy

In Masefield AG v Amlin Corporate Member Ltd [2011] EWCA Civ 24, the Court of Appeal was asked to overturn David Steel J’s conclusion that the detention of goods by pirates had not amounted to actual total loss. The decision is discussed by David Turner QC of 4 New Square.

The facts

In August 2008 Bunga Melati Dua was seized by pirates off the coast of Somalia, while carrying a cargo of biodiesel from Malaysia to Rotterdam. The cargo owners served a notice of abandonment on insurers on 18 September 2008. Eleven days later, the ship was released following a ransom payment by MISC, on behalf of the shipowners. When the ship arrived in Rotterdam in late October 2008 the seasonal market for biodiesel had closed. Following storage until the following year, the biodiesel was sold for substantially less than its insured value. The cargo owners brought a claim on the policy for £7.6m.