Total loss and piracy

David Steel J in Masefield AG v Amlin Corporate Member Ltd [2010] EWHC 280 (Comm) has discussed at length the ability of the assured to recover under cargo policy for goods detained by pirates and then released following the payment of a ransom. In such a case it would seem from the judgment that there is no loss at all.

Masefield: the facts

A cargo consisting of two parcels of biodiesel, shipped on board the oil tanker Bunga Melati Dua, was insured by the defendant insurers under an obligatory open cover policy. The policy covered all shipments by the claimants in the policy period. The declarations to the open cover in respect of the cargo totalled US$13,326,481.75. The risks insured under the policy included both piracy and theft, although there was a war risks exclusion which removed cover for ‘capture, seizure, arrest restraint or detainment (piracy excepted), and the consequences thereof or any attempt thereat’. The policy also contained a constructive total loss clause, as follows: