In August 2008, the Bunga Melati Dua,1 a
vessel owned by MISC,2 was on a voyage from Malaysia to
Rotterdam carrying a cargo of biodiesel when it was hijacked by
pirates in the Gulf of Aden. The ship and its crew were taken into
Somali waters. The vessel was released less than six weeks after
her capture on payment of USD2 million in ransom. The value of the
vessel and her cargo amounted to USD80 million. It was common
ground between the cargo owners and their insurers that the theft
of the cargo and seizure by the pirates were insured risks. Some 11
days before the release of the vessel, the cargo owners issued a
notice of abandonment, claiming actual total loss or constructive
total loss of the cargo. The owners contended that, on the capture
of the vessel by the pirates and its removal into Somali waters,
the cargo became an actual total loss within the meaning of s 57(1)
of the Marine Insurance Act 1906. The High Court of England held
that there was no actual total
